Sample Assignment on Contemporary Issues in Tour and Travel Industry

CONTEMPORARY ISSUES

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TABLE OF CONTENTS

INTRODUCTION................................................................................................................................4

TASK 1.................................................................................................................................................4

1.1 Current issues that drive change in the travel and tourism sector.........................................4

1.2 Analysis of the current issues through appropriate methods and resources..........................5

TASK 2.................................................................................................................................................6

2.1 Current trends influencing the change in the travel and tourism sector................................6

2.2 Analysis of the current trend.................................................................................................7

TASK 3.................................................................................................................................................8

3.1 Ways in which travel and tourism can respond to changes...................................................8

3.2 Strategy for responding to change........................................................................................9

3.3 Justification of strategies.....................................................................................................11

TASK 4...............................................................................................................................................11

4.1 Impact of issues and trends that affect travel and tourism industry....................................11

4.2 Consequences of business failing to respond to market changes........................................15

CONCLUSION..................................................................................................................................16

REFERENCES...................................................................................................................................17




ILLUSTRATION INDEX

Illustration 1: Rome..............................................................................................................................6

Illustration 2: PEST Analysis..............................................................................................................11

Illustration 3: Growth Rate of Industries in Comparison to Tourism Industry in UK........................13

Illustration 4: Graphical Representation of Growth Rate of Industries in Comparison to Tourism

Industry in UK....................................................................................................................................13

Illustration 5: Components of Revenue of Tourism Industry.............................................................15

Illustration 6: Graphical Representation of Components of Revenue of Tourism Industry...............15

Illustration 7: Total Number of Visitors and Their Spending in UK..................................................16




INTRODUCTION

The challenges faced by the tourism and travel industry can affect their contribution and

structure in the economy. This industry is highly volatile in nature and is dependent on different

factors. Further, this report enlightens different aspects of the mentioned industry. In this report, we

have used various techniques for understanding the current trends and issues in this particular sector

(Buda and McIntosh, 2013). Besides this, the impacts of changes have also been explained, together

with the description of the preventive steps for reducing the negative impacts of the changes. The

prime focus in this report has been paid upon the strategy formulation task.

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TASK 1

1.1 Current issues that drive change in the travel and tourism sector

The fastest growing industry in the world is the tourism and travel industry. The past few

years had revealed drastic change in this sector in terms of its advancement and development. These

have also given birth to several other issues which are affecting the industry slowly. So, it is

essential to eliminate these issues. Rome lies in the list of most prominent places in Europe and so it

is always crowded with travellers (Conrady and Buck, 2011). This place has developed immensely

according to the present era and it has its own history. There are several problems that make an

impact on the local environment, society, etc. of this place as huge number of visitors visits this

place every day. Some of the issues and advancements are as follows:

Terrorism: It is among the most emerging problems in the tourism sector. Terrorists visit the

places as tourists in order to fulfil their bad intentions. Rome is also facing such issues.

Recently, some terrorists have blasted the embassy of Rome in which several people lost




their lives in this incident. Though this incident has made the government of Rome to

tighten the security but still people are afraid of such activities (Geraghty and Torres, 2009).

Rise in globalisation: Globalisation has a positive as well as negative impact on the tourism

and travel industry. It has raised awareness among the people and as a result the city has

become capable of attracting more tourists. As a result, income level of the citizens has been

increased which has helped them in developing themselves. However, it has also affected

culture of the society adversely and had inspired the people from all over the world to visit

the city (Platzer, 2014).

Changing customer needs: The demands and needs of the customers keeps on changing with

the time. So, the organizations in the city are compelled to adopt the same in their

businesses. Thus, in order to increase the customers, the companies are rendering different

packages as per the needs and demands of the customers.

Environment: The increasing number of tourists has resulted in degradation in the

environment of the city. Tourists visit the places and leave their wastes at the places. It

destroys the beauty of the place and the wastes also give birth to various insects. Besides

this, some people harm the ancient paintings and walls of the ancient buildings. It has

created tension for the local government (Dieke, 2013).

Liberalization: The strict policy of Italy regarding the visa has diverted many tourists from

the city. So, they move to other countries. This has brought a downfall in the tourism

industry.




1.2 Analysis of the current issues through appropriate methods and resources

Tourism and travel industry is one of the most dynamic industries of the world and is

influenced by different factors. Many new issues are rising due to the development of these

industries. All the tourist destinations have some similar and some dissimilar issues depending upon

the country and the number of visitors. Italy is among the best tourist destinations with a huge

cultural history. On the basis of different journal articles and news papers, Italy has been ranked 7th

among the world in terms of the tourist destinations (Winiarski, 2005). In 2013, tourist spent almost

£824 million in Italy and more than 1,793,000 people visited the country. Despite of this, the travel

industry of this country faces several issues. The unstable political conditions of Italy have created

many issues in Rome as well. The government of the country is not much supportive and also the

strict laws of the country do not attract many tourists. Global warming is one of the problems which

have been given importance these days. This is harming the ecological balance of the world and is

also affecting the country's local wildlife because many of the species have become extinct.

Various modes of taxes are levied on the travellers of the city which hampers the growth of

tourism. The cost of travelling has increased because of the taxes. As a result, people avoid visiting

this place. The travel organisations of the country are also not developed appropriately as people

usually complain them about the poor customer services. Besides this, competition among various



Illustration 1: Rome

Source: (Sandhusen, 2000)


tourism organisations has increased immensely (Bittner, 2011). Due to this reason, they have started

posting wrong information on the websites about the places which has resulted in the destruction of

the image of the city. The tourism business is also affected by the increasing Barbary pirates and

terrorist activities in the country. People hesitate visiting the country due to such issues. The large

number of tourists has disturbed the balance of the environment and it leads to several health

problems as well. Rise in toxic waste, pollution, etc. are impacting the people’s health adversely and

illnesses such as asthma have also become common in the country. Further, an alteration in the

culture of the nation can also be seen due to these issues as the practices like smoking, drinking and

gambling are increasing in the country because of the tourists. These practices leads to negative

impact on the localities and are affecting the uneducated local people as well. Organizations are

altering the businesses as per the wants and needs of the people for serving the customer in a better

way (Mohr, Sengupta and Slater, 2009). For providing the innovative services and products, it is

important to adopt the changes; else the firm may have to shut down.



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TASK 2

2.1 Current trends influencing the change in the travel and tourism sector

Iman (2002) has defined dark tourism as the tourism which involves travelling to such

destinations which are historically associated to tragedy and death. Several sites are turning to great

tourism attraction because of the sensitive nature of the dark tourism. Some of the destinations that

come under the category of dark tourism are Toledo and Edinburgh, Prison like Beaumaris, Wales,

Culloden in Scotland, etc.

Dark tourism sites are becoming famous with the passage of time and differ extremely in




their presentation of death. People are generally less influenced to such type of places, but recently

this sort of tourism is in great demand. In terms of supply, there has been a growth in the provisions

of these experiences or attractions and all this has attracted many organisations. Companies are

making different travel and tour packages as per the demand of the customers and is providing them

with lots of other facilities as well. All this have resulted in an increase in profits (Liu and et. al.,

2014). People associate these places as an adventurous trip and comments that it is an amazing

place for spending the holidays.

People visit these sites for fun as well as for the purpose of learning the history of these

places. Many educationalists and researchers visit these places for writing reports on them as they

are quite interesting. Many documentary and film makers also visit these places for shooting their

movies in order to give them a real feel. Regulatory bodies have also started to support these places

by offering special facilities and benefits to the tourists who are visiting these places. Few of the

places have been declared as the World Heritage Sites by UNESCO so that, they can be protected

from exploitation.

These places have become vacation home for many tourists, they visit and relish at these

places for long duration. These places are also helpful in the development of the local community

because local people get jobs as a guide to tourist and this is resulting in an increase in their

personal income. Many private and government organisations are spending a considerable amount

on advertising of these places through TV, social network, internet, etc. and also organise some

global occasions near these places for attracting more tourists (Hwang, 2007).

However, with these benefits there are some issues as well, like when the tourists are told

about the history of the places, they sometimes take it as fun and ignore the feelings and emotions

of the local people. Also, some guides exploit the history of the people and the places by telling a

fake story to the tourists. Many companies fool the tourists by giving them pay extra and false taxes

and by charging high fees from them. Thus, it is essential to protect these places as they are not just

the adventurous places but are the part of the world's history as well.

2.2 Analysis of the current trend

Dark tourism is gaining popularity now a days around the world by influencing lots of

tourists to these sites. The ghost town of Edinburgh and Toledo in Scotland are among the most

popular dark tourism sites (Chen, 2009). These places can be analysed with the help of a case study.

Case Study:

Toledo and Edinburgh have connection from the past of human calamity. Many aficionadosTOLL-FREE NO: +61 879057034 EMAIL: [email protected] NO: +61 424715655 WEBSITE: https://www.assignmentprime.com



crave to visit Scotland because according to the Paranormal Witness report, Toledo and Edinburgh

are regarded as UK's most haunted places that have recorded more than 700 paranormal sightings in

the past 25 years. Edinburgh is also known as the city of deaths. This place has a live history of

more than a thousand years and there is always an untold violent history for the place.

Because of all these reasons, this place develops as one among the best tourist spots in UK.

The city delivers wide variety of ghost walks and tours. In terms of dark tourism, Toledo is also an

important city due to the sites like Holy Grail Trail, Table of Solomon, etc. both these cities have

developed due to the dark tourism. Thousands of people visit these places every year and it has

supported the local people in developing themselves. Many people work as tourist guides, some

people offer the tourists a place to live, eat, etc. (Ashworth and Page, 2011). Government is also

providing support to the cities by developing infrastructure for attracting more tourists. Several

horror documentaries and movies are shot at these places and had become popular among the

academic students and the researchers.

Methodology:

Majority of research imparted within the context of dark tourism is of qualitative nature only

and hence it pay less efforts on the tourists, managers, etc. that attribute to the attraction of the dark

tourist. In this context, Semi structured interviews are focused from the tour managers of Edinburgh

and interviews were conducted in the innate language of the cities. Several notes and photographs

are also taken along with the video of Toledo's ghost trip. The tourists were divided among three

parts by the cities- first part included the curious people, second part included the people who visit

the place just for time-pass and the third part included the people that has taken keen interest in the

history of the places. Edinburgh has undergone many changes during the past time as all the

companies have put their advertisements on the Royale Mile.

Along with these visits, several other data was collated with the help of primary and

secondary resources as well such as books, magazines, government publication, journals, etc. It was

analysed from this tour that, these places are famous at the present time and are becoming more

popular because they are now being advertised as well (Cant, Strydom and Jooste, 2009). Also,

several companies are also providing special tour packages for such type of places. Despite of all

these advancements, places are still losing the charm or beauty because of their exploitation by the

locals as well as the tourists.




TASK 3

3.1 Ways in which travel and tourism can respond to changes

Tourism and travel sector is considered as one among the active sector in the world which

can be affected by the alterations in the external factors of the country. It is very essential for the

industry to adopt the changes according to the situations in order to remain profitable and for

serving large number of tourists. London is viewed as top most destination of UK that caters the

attention of large set of tourists every year. London is the first city to respond to any deviations in

the political conditions and laws of UK. London responds accordingly to make other industries, like

tourism and travel industry, operate effectively in the economy. Further, the tourism industry is also

affected by the changes in the social factors in London as the tourism sector has to be developed

according to the change in behaviour and demand of the people. It also needs to maintain itself

keeping in view the possible natural disasters (Fyall and Garrod, 2005). In addition to these issues,

the tourism industries has to face several other factors like terrorism, taxes, recession, health issues,

etc. and it is very important to manage them effectively.



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3.2 Strategy for responding to change

Due to high amount deviation within the context of external environment of London, It has

become very significant to manage these changes and to change the sector accordingly. For this

purpose, progressive tactic is required that can support the sector in attaining sustainability

effectively. For planning the approaches, it is important to comprehend the external and internal

factors which are affecting the city (Heung, 2003). Here, SWOT and PEST Analysis have been done

for developing effective strategies.




PEST Analysis:

Political factors: The local government is being affected by the travel and tourism industry

for reducing different illogical taxes imposed on the tourists. Several securities and policies

have been tightened by the government due to the terrorist attacks; this has also affected the

tourism as the tourist does not like to be inspected at each and every place. Recently,

London Olympic 2012 have enhanced the total number of tourists in the city which helped

mentioned industry in showing its potential. Besides this, several airline companies also

bring lucrative packages. But, these packages contain few hidden costs that influence the

decisions of the tourists.

Economic factors: The whole economy of London was disturbed due to the tourist’s attacks

and this resulted in cautious business spending. Also, some investments that were being

postponed earlier have not been sanctioned till date. All these factors affected the tourism

industry by creating huge losses (Hassanien, 2006). But, the industry has struggled to rise

again and is gaining popularity because it includes many people and they are earning good

income.

Social factors: It is evident from this that the city can attract more customers and has greatTOLL-FREE NO: +61 879057034 EMAIL: [email protected] NO: +61 424715655 WEBSITE: https://www.assignmentprime.com


Illustration 2: PEST Analysis

(Source: Khodarahmi, 2009)


potential in this industry. But, it may have positive as well as negative impact on the city.

The positive side is that, it will support the local society in developing the infrastructure,

enhancing the culture, etc. and the negative side is that it may rise in crime rate such as

blasts, murders, etc.

Technological factors: Advancements in technology has transformed the function of this

industry. People can go on tour of the whole city through internet for gaining the

information and asking the reviews regarding the places. Further, huge support is attained

from government in spending more on advertising through TV, social networks,

collaboration with airlines, third part websites, etc.

SWOT Analysis:

STRENGTHS WEAKNESS OPPORTUNITIES THREATS

Focuses onGreenInitiatives

Illogical and extraTaxes are levied onthe Tourists

Sustainable Tourism Economic crisis

Infrastructureis well-developed

Quite expensive City Decrease in theamount of taxes

Attacks by terrorists

Uses EnglishLanguage

High pollution andheavy traffic

Offering economicpackages to thetourists

Environmentdeterioration ordegradation

It has severalcultures

Low profit margin Developing themarket swiftly

Its hotels areamong best inthe world

Unstable nature ofthe currency

Alliances withtourism agencies

The beauty of theplace is veryattractive

3.3 Justification of strategies

The tactics which are used above clearly depicts that, London possess great potential and

opportunity for becoming the world's most admiring tourist destination due to its infrastructure,

culture, beauty, etc. Application of PEST analysis is very essential as it aids the industry in knowing

the aspects which can affect the business functions. Influence of the tourism sector to the city's

economy can be easily ascertained in terms of the employment development opportunities. It also

assists in analysing the social factors and in encouraging the tourism sector for developing

themselves as per the wants and needs of the people (Šerić, 2013). Besides this, SWOT analysis is




also equally important for the city and the industry as it helps them in using the opportunities and

strengths for the competitive advantage and also assists them in eliminating the threats and

weaknesses.



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TASK 4

4.1 Impact of issues and trends that affect travel and tourism industry

In UK, Travel & tourism industry is growing at a fast pace and it have a largest share as

individual industry in UK GDP. According to UK, Tourism statistics 2015 report tourism that the

industry is growing at the rate of 13.6%. This industry contributes 126.9 billion euros in the GDP

of UK which is 9% of the total GDP of the country.



Construction -2.60%Retail 11.80%Tourism 13.60%Manufacturinfg -2.30%

Illustration 3: Growth Rate of Industries

in Comparison to Tourism Industry in

UK

(Source: Lundberg, 2011)


This chart clearly states that, tourism industry was growing at 13.6% followed by

retail sector 11.80%, construction sector -2.60% and manufacturing sector -2.30%. This chart also

makes it clear that, in period of recession when every industry gives poor performance at that time,

there was only tourism industry that grew at rapid rate. In 2014, total revenue of tourism industry

was 125.5 billion euro. The main components of the revenue are domestic, inbound, outbound, UK

air fares and day visitors.



Construction

Retail

Tourism

Manufacturinfg

Illustration 4: Graphical Representation of Growth Rate of Industries in Comparison to

Tourism Industry in UK

(Source: Morosan, 2013)


According to this graph, most of revenues come from the domestic tourists and

they mostly visits tourist place at the day time. Major part of revenue is covered by day tourists

53.80% followed by domestic 22.60%, inbound 21.70%, outbound 24.20% and airlines only



Domestic 22.60%Inbound 21.70%Outbound 24.20%UK air fares 2.90%Day visitors 53.80%

Illustration 5: Components of

Revenue of Tourism Industry

Source: (Nield, K., 2009)

Domestic Inbound Outbound UK air fares Day visitors0

0.1

0.2

0.3

0.4

0.5

0.6

Column C

Illustration 6: Graphical Representation of Components of Revenue of Tourism Industry

(Source: Šerić, 2013)


2.90%.



Illustration 7: Total Number of Visitors and Their Spending in UK

(Source: Dieke, 2013)


In UK, 12.7 mostly tourist’s visit places for leisure followed by businesses tourism 7.9,

study tourism 0.5 and other 2.3. Therefore, companies in this industry must pay special attention

on local people and businessman.

Issues in tourism industry

Thomas Cook provides wide range of products to its customers which helps it in

surviving in the tourism industry. It prepares packages that cater the needs of all kind of people.

Some of its packages that provide competitive advantage over its competitors are India long

weekend holidays, Student travel packages and senior citizen holidays. The main competitors of

Thomas Cook are Britain, American express and Carlson travels. Thomas Cook is UK third

largest travel group operating in UK travel and tourism industry. It has its own distribution

channels, airline and tour operation. This act as a core competency of The Thomas crook and it is

in position to capitalise the opportunity that are available in travel & tourism industry. In Travel

and tourism industry, there are number of suppliers like airlines, car rentals, cruise ships, hotels

and railways. Thomas Cook have tie ups with the hotels all over the world. It has its own

aeroplane as well. Maintaining a sound relationship will suppliers is very difficult task.

Therefore, Thomas Cook is paying special attention in making a good relationship with its

suppliers. In case of conveyance facility, there is no supplier issue because it has its own

aeroplane. This provides economies of scale and act as its core competency over its competitors.

In case of customers, by preparing several travel packages it fulfils the needs of every age and

category of people whether they are students, businessman and old age people etc.

4.2 Consequences of business failing to respond to market changes

In today era, it is imperative for every business organization to bring changes in it

according to the fluctuations in business environment. Business environment is changing at a fast

pace especially economic environment of countries all over the world. Therefore, Thomas Cook

is required to bring changes in its services and it also needs to adopt strategies that help to

maintain its leadership in travel and tourism industry of UK. Changes in these factors to large

extent affect business of an organization.

Customer base- In today era, preference of people is changing rapidly and it is difficult to

create loyalty among customers about the company product. There are many competitors

of Thomas Cook therefore, it is essential for it to retain existing customers and create new




customers (Muhamad, R., Melewar, C. T. and Alwi, S. F. S., 2012).

For this purpose, it needs to identify untapped segment of people and is required to

prepare its holiday packages in such a way that attract customer’s attention. Thomas

Cook can target people that fall in lower class. Thomas Cook can take benefit of

economies of scale and can provide its services to low income people at cheaper rates.

Business- With the change in business environment, Thomas Cook should bring change

in its business and should focus on expansion of the business. It can increase its

operations in developing economies like India, China and Malaysia etc. .

Mismanagement- Management of Thomas Cook must make sure that all activities are

performed in a proper manner and on time. Many times it is very difficult to perform the

function of time management (Morosan, C., 2013).

Little time is available and management have to perform a lot of activities in that time.

Therefore, management should prepare schedule in a proper manner and must ensure

completion of activities on time.

Suppliers- It is very difficult task to maintain good relations with suppliers and bitterness

in relationship directly affects firm business. Therefore, Thomas Cook must take steps

which help it in maintaining good relations with suppliers. Thomas Cook can also

perform some of suppliers functions like it can provide its own cars to tourists and it can

also establish its own hotels in the most famous cities of world. This will reduce number

of suppliers and bring economies of scale (Perrott, B. E., 2011).




CONCLUSION

Based on present report, it has been evident that there are different issues related to the

tourism and travel industry and it makes an impact on the organisations. This sector is rising

continuously at a fast pace. Varied mode of tourism has emerged in the industry such as dark

tourism, etc. It has emerged as one of the popular tourism activity among travellers and it is also

generating high profits. It is essential for all the organization of this industry to address these

issues effectively by explaining the value of tourism places to all the people. They also need to

alter themselves as per the deviation in the market conditions. If company fails in doing such

things, they may have to suffer huge losses. Organization should also invest in their researches as

this will help them in addressing the people effectively by meeting their demands and needs.



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REFERENCES

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Iman, M. H. A., 2002. An Introduction to Property Marketing. Penerbit UTM.

Khodarahmi, E., 2009. Strategic public relations. Disaster Prevention and Management: AnInternational Journal. 18(5). pp.529 – 534.

Liu, B. H. and et.al., 2014. The Chinese wine market: a market segmentation study. 26(3). pp.450– 471.

Mohr, J. J., Sengupta, S. and Slater, F. S., 2009. Marketing of High-technology Products andInnovations. Pearson Prentice Hall.

Morosan, C., 2013. An analysis of the relationship between travel preferences and intentions touse registered traveler biometric systems in air travel. Journal of Hospitality and TourismTechnology. 4(1). pp.23 – 39.

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Online

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Lundberg, E., 2011. Evaluation of Tourism Impacts–a sustainable development perspective.[Online]. Available through:<https://gupea.ub.gu.se/bitstream/2077/27968/1/gupea_2077_27968_1.pdf >. [Accessed on29th June 2015].

Platzer, M., 2014. Travel and Tourism: Industry Trends and Policy Issues for Congress. [Pdf].Available Through: <http://fas.org/sgp/crs/misc/R43463.pdf>. [Accessed on 29th June2014].


