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Understanding the travel and tourism sector

Code: A/601/1740

Learning Outcomes:

LO1 Understand the history and structure of the travel and tourism sector

1.1 Explain key historical developments in the travel and tourism sector

1.2 Explain the structure of the travel and tourism sector

LO2 Understand the influence of local and national governments and international agencies on the travel and tourism sector

2.1 Analyse the function of government, government-sponsored bodies and international agencies in travel and tourism

2.2 Explain how local and national economic policy influences the success of the travel and tourism sector

2.3 Discuss the implications of political change on the travel and tourism sector in different countries

LO3 Understand the effects of supply and demand on the travel and tourism sector

3.1 Explain factors affecting tourism demand

3.2 Explain how supply has changed to meet the effects of demand

LO4 Understand the impacts of tourism

4.1 Evaluate the main positive and negative economic, environmental and social impacts of tourism

4.2 Explain strategies that can be used to minimise the negative impacts while maximising the positive impacts.

Answer

Introduction 

Travel and Tourism have been forwarding with the technological advancement and the advancement is different with the changing of places and cultures. Travel and Tourism is one of the fastest growing industries in the overall globe and it has its own challenges and benefits. Travel and Tourism industry has a relation to the historical development and structure of the organisation. Moreover, this has an association to the national and local government that can influence on the tourism sector. This study sheds light on the supply and demand in this industry and the impact of tourism in economic, environmental sectors. In order to conduct the study, as given in the unit, TUI Group is the main focus.


LO1 Understanding the history and structure of the travel and tourism sector (Refer to Poster)

1.1 Explaining key historical developments in the travel and tourism sector

Travel and Tourism sector has a long past as the wandering mind of the individuals has also a long past. Travelling is the greatest time pass for the people and they love to travel and explore new places.


Ancient times: This time has been begun since the Babylonian and Egyptian times. According to some of the critics and historians, it is said that a museum was opened to the audiences during the 6C CE in the ancient Babylon consisting antiques. Moreover, in Egypt, pyramids were always a source of wonder for the people and there were drink, food shops with vendor, inns, guides and prostitutes for the visitors (Chris et al. 2005, p.36). In case of Greece, this place has a long saga of tourism since the time of ancient times. The destinations like Athens, Sparta, Troy were some of the places that attracted tourists. In Greece, there were several inns near the temples of the gods and goddesses. As opined by Davison (1998, p.25), the inns of the Greeks were not in good quality, they were unfriendly, toilets, foods, rooms were not good. Romans were famous in providing the tourists with a pleasant experience. Romans provided a currency that was accepted everywhere and Romans themselves like to travel much in Bay of Naples, Puteoli and Cumae.


Middle Ages: This age was called as ‘dark age’ for the travellers as the places were getting less attractive for the travellers and the travelling meant that time a laborious effort. That time travel means near to home and mainly the merchants travelled for the business reasons. In leisure purpose, the travelling did not occur that time. When the Christianity comes, the concept of ‘holiday’ came with travelling of the disciples in several places. Many pilgrimages got famous during this time.


Modern age: During this period, in the earlier time, transports methods were not so good and people travelled through horse, cart and bare foots. With the advancement of time, roads, rail lines, vehicles were made. In the earlier time, the carriages were not comfortable and it was an unpleasant journey for the wayfarers. According to Holloway (2009, p.45), after the industrial revolution in England, the travelling got easy with the technological advancement like steam engine, sprung coach, tarmac road surface. Furthermore, the concept of public transport and the development of hotels, resorts made the leisure travelling more splendid. In addition, Queen Elizabeth 1 organised a grand tour for the students once they finished the study. Lastly, the development of sea transport, rail transport, holiday camps and air transport has made the tourism famous. Moreover, post-wars scenario, the establishment of the tourism organisations, agencies in developed countries with technological specifications helped in tourism.


1.2 Explaining the structure of the travel and tourism sector

Travel and Tourism sector has mainly six elements in making the structure for the industry in a country. These are:


Figure : Structure of Travel and Tourism Sector 

(Source: Tribe, 2005, p.85)


a) Attractions: In order to make a place a tourist destination, the place must have some natural attraction that can allure the people to visit there, like hills, beach, forest, lake etc. On the other side, man-made attractions can allure the people to visit a place, like a theme park. For instance, in England, Blackpool beach attracts more than 6 million tourists in each year.


b) Transport: In order to reach a place of tourist destination, it is needed to have specific transportation facilities. As stated by Van Harssel (1994, p.65), 25% of travellers search for better transportation availability in visiting a tourist place. Transportation is related to the rail network, air transport, sea ferries with road transport. In short or long distance travel, the transportation is very much needed for the journey.


c) Accommodation: It is important to have good accommodation for the travellers who visit a certain place that includes hotels, lodges, resorts and motels etc. In recent time, catering system that provides food and lodging at the same time takes the popularity. Moreover, over the years, the accommodation facility has been developed and tourists can book their hotels through the internet (Evans et al. 2012, p.95).


d) Tour Operators: It is related to the package system and a contract is done negotiating the transport and accommodation. Tour operators are operated in the various markets, it can be domestic market and overseas holidays centres.


e) Travel Agents: travel agents make the relation to the public and tour operators and they provide special package for the planned holidays. In this regard, online travel agents have taken the place of the traditional travel agents in recent time.


f) Tourism Development: In a place or in a country, there should be a board of directors or development authority for improvement of travel and tourism. This is related to the promotion of a place, advertisements and the training of the service providers. Of late, travel and tourism have grown dramatically with the help of integration and expansion with the help of technology and development.


LO2 Understanding the influence of local and national governments and international agencies on the travel and tourism sector

2.1 Analysing the function of government, government-sponsored bodies and international agencies in travel and tourism (Refer to PPT)

Government: In case of tourism, the role of the government plays a vital role as it is related to the political factors. Government intervention is related to the state's participation in the tourism. The government can do state intervention and define the role of the state, principle functions, destination authority and government policies etc. The government can formulate national policies for the development and growth of the country with investment in tourism facility (Robinson et al. 2016, p.49). The government can organise promotion for the country’s destinations.


Government sponsored bodies: Government sponsored bodies try to provide productivity for the travel and tourism sectors, like Russia, Brazil, China and India are some of the countries. Government sponsored bodies try to create more jobs for this industry and they want to make regeneration of the industry.


International agencies: World Tourism Organisation (WTO) can be defined as the intergovernmental organisation recognised by the United Nation and this organisation can provide opinion on tourism issues. The organisation can take the technical statistics, ideas, research for the selected countries and they can make commercial partners for this purpose. International Chambers of Commerce (ICC), International Air Transport Association (IATA), IHA, UFTAA are some of the international organisations they can respond to the government intervention and can create a good relationship for the improvement of the tourism.


2.2 Explaining how local and national economic policy influences the success of the travel and tourism sector (Refer to PPT)

The significance of the UK’s visitor economy has the opportunity to grow the sector with profitable, competitive and productive industry. UK’s domestic tourism offers potential growth as it is a good place to spend the holidays for the travellers. In the recent past, the recession and the GDP declined in the UK almost for 9.8% (VisitBritain, 2016). In changing the local economic policy for the government of the UK, the number of tourists decreased. In this scenario, the changing currency for the states is one of the reasons. Foreign travellers need to spend more money. National policy related to the increase the proportion of the UK residents who come to spend the holidays needs to improve. The UK is one of the top five places where the visitors come to visit. Another issue related seasonality as it is an ever-busy sector. Positive change in the economic policy is needed for the industry. 


2.3 Discussing the implications of political change on the travel and tourism sector in different countries

Politics is related to the power and the influence on the society that can impact on the public policy (Goodall and Ashworth, 2013, p.78). Public policy can be defined as the government’s rules and decisions for the common people. Public policy is the decision of the government what the public can do or what is the requirement for the government intervention. In this scenario, sudden changes related to the politics can create huge changes for the states and in the tourism sector. Some of the primary changes in the public policy can create fear in the mind of the travellers when they visit a particular place. Traveller's safety is a big issue and if the travellers find the place less secure, they may avoid the place. The attractiveness of the place may decrease or increase with the changes in the politics or public policies. If a place is unsafe, the political changes for a place that is bringing something safety measures, the change may bring good for the place. The safety issues of the place make this place a tourist hub. The initiative of the government is needed in order bring the positive change for the country. Political changes and public policies are related to the purpose of the government action, the programmes to achieve the goals, goals to accomplish the changes and decisions that are implemented in order to take the changes (Hall et al. 2012, p.36). 


Changes can make a place to visit more and less legal boundary can provide better access to such places. The political changes need to provide with better security to the destinations. In the case of the Middle East, this place is affected by the terrorism, in these places, people would not try to visit. On the other side, Brazil government is trying to change some political changes that can allure more tourists in the country. Changes that can bring positive vibe to the tourists can be:

  • Amending some legal rights
  • Developing economic competitiveness
  • Availability of public benefits
  • Reducing risks in all fields
  • Educating and providing concepts and education


Environmental policy, transport policy, national policies and international relations are the fields that need to take into account. Providing favourable advantage related to the tax and legal procedure can attract more tourists. The UK needs to change some political changes as The UK left EU, however, airports, visa, railway lines, road, vehicles and accommodations need to be developed in this scenario (Paul et al. 1994, p.56).


LO3 Understanding the effects of supply and demand on the travel and tourism sector 

3.1 Explaining factors affecting tourism demand

The demand for tourism can be understood through a total number of visitors who travel to utilise the facilities and services of the tourists at places that are far from the places of their residences and workplaces (Lavery, 1996, p.50). The tourist destinations are the places where the tourists want to visit and the places are made such a way that can attract the visitors. The demand of the place can depend on the various reasons related to the taxation and environmental issues, terrorism. 


Economy: This is the primary factor that affects the tourism industry. The economy demands related to the exchange rate of a country, money value, job loss, accommodation and economic policy of the country. The holiday of a country takes the nation to have the economic condition of the overall people. The size of the holidays and the place for spending holidays have very much depended on the economic factors. Tourists' shopping, accommodation, transportation and other activities are very much associated with the economical subject of the travellers. The economic demand for the tourism can provide relative price that can set the consumption. This economic demand is the schedule of amount of any service or product related to tourism that is people wish to spend during the allocated or specified time (Opperman and Cho, 1997, p.56). 


Demography: This factor related to the total number of travellers who like to travel or are travelling to take the tourists facilities at the place that is far from their home. This demographic determinant is associated with the price and the participation of the tourists in a place. This is an effective actual demand and it can be measured through the statistics. As stated by Van Harssel (1994, p.47), the demographic consideration is related to the society and the number of tourism is decreasing at certain phases as the family is separating. On the contrary, the spending is higher, the number of staying days is increasing and the choices of destination are changing. 


Psychology: This factor is related to the perspective of the behaviour and motivation of the people who are going to travel. This demand is associated with the personality traits, willingness to travel, external influence for the travelling and motivation to have the services. This can be related to the suppressed demand of the travellers. Potential demand for a destination refers the future travelling to a place. On the other side, deferred demand defines as the postponed of the travelling due to the problem in the supply, like accommodation. These provide psychological factors to the travellers. 


3.2 Explaining how supply has changed to meet the effects of demand

In Travel and Tourism industry, supply elements are fixed in geographical basis, hotel, motel, lodge, restaurants, visitors and resorts. The correlation between how much service is supplied and the price is called as the supply relationship (Reyes, 2013, p.145). Price is the reflection of any industry's supply and demand. TUI Group has been facing issues related to the demand and supply issues. Development of tourism is shaped by the demand for a destination and the availability of the opportunities. TUI group has been facing the supply issues as the definition of the supply has been changing in the tourism industry. When the supply is limited, the prices of the services or products go up. TUI group has been facing the problems in supply as this supply perspective determines the overall attractiveness of the area by creating an accurate inventory of existing resources. TUI group has created new recreation, establishments of new accommodations, cultural and natural attractions (Tuigroup.com, 2016). Supply of the tourism depends on the accessibility of the physical resources, seasonality and fragility of the unique features and popularity of the resources. TUI Group has been able to have the impact of supply that provides a positive impact on the employment, investment, infrastructure, economic and conservation. Supply changes of the tourism industry provided the negative impact of the business of TUI Group, environmental damage, inequality, loss of traditional culture, water cycle damage and cost. 


The demand for the tourism can be measured through arrivals of the visitors, means of transportation, types of they live and the amount of money they spent. TUI Group has been following some of the factors, lifestyle, lifecycle, paid holiday entitlement, the income of the employment and lastly education and mobility (Frost and Laing, 2014, p.237). In the case of outbound tourism, it provides a negative impact on the resident country, whereas, outbound tourism provides a positive effect on the country visited. TUI Group measures the concepts through product level (Items), geographical level (Destination) and time level. Through supply and demand changes, TUI Group wants to have the potential market in which consumers profess the interest.

 

LO4 Understanding the impacts of tourism 

4.1 Evaluating the main positive and negative economic, environmental and social impacts of tourism

Positive Impact:

Economical: Tourism can create jobs that can provide direct employment within the industry of travel and tourism and in an indirect way; it can provide million of new employment in transportation, accommodation and retail sector. The tourists spend their money on travel sector in goods and services. Through tourism, employees get an opportunity in small and medium sector enterprises in the rural sector. Through tourism industry, the country manages to have extra revenues, tax from air tickets, rail fares, hotels etc. A place gets development through tourism.


Environmental: In the case of nature and ecotourism, the government tries to promote the conservation policy to the people. The wildlife, new types of trees, forests get highlighted to the news. It provides funding for the place and it can spend for the animal preservation and the theme park. The learning can be gathered through the entrance charges and deforestation can be mitigated.


Social: Infrastructure and amenities can provide benefit to the tourism industry and the society gets new encouragement that can be beneficial for the people, handicrafts, festivals and hotel business. The hosts of the hotels need to behave well with the guests and it can create a cultural interchange and global awareness for the people (Standing et al. 2014, p.90).


Negative Impact:

Economical: Successful travel business is related to the infrastructure of the place and the cost of this sector lies on Government. This comes out of the tax and the employees do not get heavy salary as most of the employees are seasonally employed. For the local community, the tourism does not always provide advantages (Hall et al. 2012, p.58). There are several hidden costs in tourism and it is excluded to local business.  


Environmental: Tourism can be a threat to the region's cultural and natural resources like water supply, forests, coral reefs and endangered species of animals, beaches, heritage sites and ancient cultures. Through traffic emissions, it creates problems. Moreover, sewage, littering and noise have been creating problems. 


Social: The tourist’s behaviour can create issues for the quality of the lives of the customers and the community as the congested areas, alcohol and drugs can pose problems. Prostitution and crime level can enhance with human rights can be hampered.


4.2 Explaining strategies that can be used to minimise the negative impacts while maximising the positive impacts

Some of the strategies can enhance the negative impacts of the social, environmental and economical impacts of the travel and tourism industry. 

The tourists can stay at the local hotels instead of the resorts; this may help the environment of the destination. Hotels can provide some advantages to the local area. These strategies may help the environment in eliminating the conflict of the atmosphere. In the case of any expensive mistakes of the hotels, related to the sewage and leakage of the waste, the reunification strategy of the government can be helpful. Energy saving, disposal, pollution can be decreased through waste management, pollution prevention and resource information. 


In the case of development of society, educating the tourists is important that can impact on the society in using the drugs and alcohol. Educating the local communities and service providers are significant to maintain the travel business that can assure the benefit. Sustainable tourism is needed that does not provide damage to the society maintaining culture. 


Enforcing strict laws is necessary for the improving of the area and economic strategy is related to the tariffs and quota of the travel and tourism sector. Employment related to the increase of spending on the local community, infrastructure and diversification and social advantages. Infrastructure is needed to improve for the betterment of the local residents. Eco-tourism, diversification of the product range and need for the management and stewardship is necessary. 


Conclusion

Travel and Tourism sector can develop through working with a content marketer and having an online presence is necessary. This industry is related to the environmental, socio-cultural and economic and educational matter and that can depend on the countries in which it is growing. Travel and Tourism are in link with transportation, wildlife, entertainment, accommodation and arts. Tourism industry can change with the time as the industry deals with the people. 

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