Unit 6 Contemporary Issues Travel and Tourism Assignment - Thomas Cook

Introduction

Travel and tourism management the insight over the travel and tourism and different contemporary issues in the global travel and tourism market can be analysed. The currently driving changes in the travel and tourism are analysed by taking Sri Lanka as the chosen destination. the political unrest and the terrorism issues in the MENA countries are the two current issues which are driving changes in the MENA destinations. These issues are discussed through this document. The ways in which the International Airlines Group can respond to the changes are described. Strategies are developed on the IAG services on responding the driving changes by taking two Airlines of IAG. The strategies are justified with supporting arguments. Different issues in the travel and tourism business sector and their impacts over the organisations like Thomas Cook, Myla Travel and Travel Network Group are discussed. The consequences on failing to respond to these changes are also provided in the document.

Task 1

1.1 Analyse issues currently driving change in the travel and tourism sector for a selected tourist destination. You have to include at least three issues and give a detailed explanation of the issue and its impact on the travel and tourism sector.

Sri Lanka has been a very popular destination for its natural beauty and natural richness. The diversity within the landscape ranging from the rainforest and arid plains to the highlands, sandy beaches are the main focus for the tourists. It is also popular among the western tourists for its Buddhist ruins along with the ancient citadel Sigiriya, palace and frescoes. (Weaver, 2011) The culture and the historical impact over the culture and the religious impact over the social lives are attracting different tourists towards the destination. The arrival of tourists increased rapidly and passed over 1 million within 2012. Consequently the tourist earnings are also increasing now as the tourist sector has occupied the position of third largest foreign exchange earner in the country by earning $1.7 billion. As the growing sector in the economy the sector of tourism has been facing different challenges. There are different issues which are related to these challenges these are:

• Types of tourists: as Sri Lanka has been still considered as the ‘value for money cheap destination’ the lower end tourists are larger than the high end of middle tourists. The higher end tourists are smaller in number tough bring more foreign exchange earnings. The government has been trying to approach the lower end tourist while placing development plans in tourism for attracting the higher end tourists. (Weaver, 2011)
• Technological development: with the development in the technologies the tourism sector has been impacted vastly. Through the development in the technological sector the connectivity has increased within different countries. The tourists are getting aware of different destinations and their attractions. Acknowledging this Sri Lanka tourism has been placing significant strategies in the promotional activities on the tourism branding. The tourism sector of Sri Lanka is also impacted by the changes in the technologies. (Goodwin, 2011) The online presence has been increasing the ratio of tourists in the destination. The developments in the technologies are impacted over the air ticket booking, hotel room reservations, purchasing tour packages etc.
• Political environment: the political issues are also impacting over the tourism business in Sri Lanka. Political unrest and terrorism are impacting negatively over the mind of the tourists towards the destination. Rising issues with the terrorism is increasing the issues of safety within the destination. (Goodwin, 2011) The lack in the advancement of the transport system and in the infrastructure is also impacted by the governmental policies. The lack in the manpower as having few human habitants is influencing as the barriers within the tourism business.
• Competition: the raising competition from the neighbouring countries are placing great amount of challenge for the tourism sector of Sri Lanka. Neighbouring countries like Malaysia, India, China etc are placing greater amount of competition by developing their tourism products and attracting the mass tourism market. (Goodwin, 2011)

1.2 You should analyse at least two different current issues using appropriate methods and resources in depth focusing mainly on the impact of political unrest in the Middle East and North Africa, terrorism and counter-terrorism measures, severe weather, local and international laws.

Middle East and North Africa have potential tourists’ destinations. In recent context these destinations or MENA have been facing lurch from one crisis to another there are different issues in the political situation in MENA which are impacting over the overall tourism business in these destinations. These issues consists ISIS impact on the politics, political unrest in Yemen, ASSAD or the terrorism. The turmoil in these destinations like Syria, Iraq, Libya, and Yemen are arising from the civil war. These are untold damages to the social lives as well as to the physical attractions of the destinations. More than 15 million people are leaving their homes which are giving rise to other issues called refuge crisis since the Second World War. (Cordesman, 2016) The countries like Tunisia, Morocco, Egypt, and Jordon are facing political transitions. The government of these countries are facing issues for addressing security concerns over growth promoting policies. Rising unemployment rates, blockades and continuous violence in the Gaza have been turned out as the political unrest Egyptian struggle for the stability, conflicts within repression and Islamic extremism, Gaza, Libya and Arab alliance, economic crisis are increasing the tension in the situations. Protests and riots are impacting over the security issues of these areas. Along with these the threat from the extremist on the border is also increasing the issues. The power struggle with Sinai and Syria is increasing the conflicts within the destinations. Mixed impact of the population growth, lack of largely based economic development and mass departure on sectarian balance have been jointly impacting on the political issues within the destinations. (worldbank.org., 2016) In 2011 the rate of euro area unemployment had reached 10%. Considering the political situation and the actions taken by government bodies or local security forces the destinations are placing negative image on the mind of the tourists. Rising protests and violent killing are influencing on the tourism business. (worldbank.org., 2016)

The current state of activities of ISIS is imposing the second threat to the tourism bushiness of MENA. The conflicts between the ISIS and the Iraq government, U.S led alliance, are raising the terrorism tensions within these areas. (Cordesman, 2016) Terrorism is the greatest barriers for these destinations. The current activities of the terrorist groups and the impact over the lives of common people are placing barriers in the tourism business. The rich tourist destinations like Syria, Egypt are facing greater amount of loss in the tourism sector as the tourists numbers are decreasing in a rapid order. The U.S and Russian’ tension over the arms sales in Syria and the Russia roles in it has been placing impact on the European security. The series of terror events like policemen killing several people, local street vendor setting him on fire are affecting the other destinations in the region. (Cordesman, 2016) In stability within the situations are increasing the issues of security and safety. Counter terrorism activities by the alliance countries are leading to a more conflicting situation. Through law enforcement the government of Libya has banned the protest to decrease the tension. The border security is also another concern of the governments for controlling the intruders as well as controlling the refuge crisis. Egyptian president Abdul Fattah Al Sisi has enforced the law of counter terrorism in order to enforce the legislative actions on the terrorism activities such as life imprisonment, imprisonment for more than 5 years etc. The counter terrorism attacks though decreasing the tensions within the destinations they are prohibiting the tourist destination to chose these destinations as their tourism place. (Cordesman, 2016)

Task 2

Slide 6

This slide is depicting the statistics associated with travelling with purpose where various purposes have been cited for travelling which are commuting, business, education (that includes escorts), shopping, other escort and personal business, visiting friends as well as other leisure. The maximum percentage for the purpose of travelling is associated with shopping as well as other escort and personal business, the next highest percentage is associated with commuting, the third highest percentage is associated with visiting friends as well as other leisure, then it is followed by education and finally it is business.

Slide 8

This slide is depicting the statistics associated with travelling independently. According to the sources, independent travelling can be divided into four parts which are travelling independently, with the help of a tour operator, having a combination of both independent travelling as well as taking the help of a tour operator and finally depending on the destination. 52% of the market is covered by the independent travellers, 11% of the market covered is depending on the destination, 19% is depending on a tour operator and 18% is depending on a tour operator as well as independent travelling.

Slide 10

This slide is depicting the statistics associated with outbound tourism where there has been an upward growth in the Chinese Tourism Market from 2002 to 2013. The growth percentage rose from 0% to 40%. In 2002, the total trips amounted from 16.6 million to 98 million in 2013.

Slide 12

This slide is depicting the statistics associated with leisure tourism in which the market has been divided into four parts which are leisure, recreation and holidays; VFR, health, religion, other; business and professional. 51% of the market is occupied by leisure, creation and holidays, 27% of the market is occupied by VFR, health, religion and 15% of the market is occupied by business and professional.

Slide 14

This slide is depicting the statistics associated with low cost carriers. In this respect, various departure countries are Spain and Canary Islands comprising of 57% of the market, United Kingdom comprises of 52% of the market, Italy comprises of 48% of the market, Norway comprises of 48% of the market, Poland comprising of 48% of the market, Cyprus comprising of 44% of the market, Ireland comprising of 43% of the market, Germany comprising of 42% of the market and so on.

Slide 19

This side is depicting the sports tourism market in UK.  In this respect, the markets for Ireland, Norway, Sweden, USA, Netherlands, Spain, France, Germany, Denmark and Australia are taken into consideration. The maximum visits regarding live football was by Ireland and the least was by Australia.

Task 3

3.1 Analyse how International Airlines Group businesses could respond to change.

The international Airlines group is the parent organisation which consists of different airlines companies such as Aer Lingus, British Airways, Vueling and Iberia. The changes within the travel and tourism business also impacted over the transport facilities of the region. Changes in the travel and tourism market impact over the business approaches of these airlines groups. IAG has been combining the two leading airlines Iberia and British Airways in UK and Spain. IAG is the third largest airline group considering revenue generation in annual terms. Within Europe considered as the second largest. (Doz, and Kosonen, 2010) By considering the changes within the market environment the groups has been placing different business strategies within their approaches. Through the combination within the two major markets like UK and Spain the Airlines Group has been placing their presences in the aviation market while retaining their current operations and individual brands. (Doz, and Kosonen, 2010)  The combination also provides benefits for the airlines passengers. The combined network has been beneficial for the cargo and providing the greater ability to make investments in the services and products.

IAG has been reducing the number of passengers while having profit increased. Iberia was the airline company which was holding the leading position within the other companies. The target markets of Iberia were Latin America and Europe. In recent context the organisation has been facing issues with the emerging competitors. The airlines have been providing different offers and discounts which would be beneficial for the travellers and attract more passengers. In this context the Air France is providing closure competition to Iberia. Through partnership strategies with the Virgin Australia was proved profitable for IAG to have access to more networks while attracting different potential travellers from these areas. (Aaker, 2012)

The developments within the technologies are also impacting over the business approaches of Airlines Groups. The emerging changes in the technological developments and the implementations of them are influencing the competitive market. Placing modern technologies in the booking system, equipment, machineries would be efficient for approaching the current trends within the market. The long haul operations are placing profits in the business of Iberia. Considering this the chief of Iberia has stated that strategic management for the revenue has been taken. The Latin American routes are taken in account by Iberia for improving the unit revenues in the performances. Low cost carriers are impacting over the business of British airways. Within the European market the increasing demands over the coast cost airlines has been attracting the mass market of middle class passengers. Along with the low cost value added services are also influencing the business approaches of British Airways. With the cost saving practices other airlines of IAG groups are trying to add extra value in the services. (Aaker, 2012) Political issues are also influencing the business. The terrorist attacks are decreasing the demand of travelling through airlines. After the Paris attack the British Airline has been greatly impacted. The cost cutting of airlines Aer Lingus, Vueling and Iberia of £145 million was also effective reading the falling demand. (Doz, and Kosonen, 2010) 

3.2 Develop strategies on how International Airlines Group businesses such as British Airways, Iberia, Vueling and Aer Lingus could respond to change. You need to select and develop strategies for at least two businesses. Provide detailed explanation of your strategies.

Iberia is the leading one within International Airlines Group. It has been dealing the business within European Union and American destinations. It is based in Madrid and the main bases are Madrid Barajas Airport and Barcelona El Prat Airport. Within the Iberian Group Iberia Regional and Iberia Express are included. In addition with the transport facilities it also carries out related activities like aircraft maintenance etc. Though Iberia has potentialities in the business approaches the recent competition within the market has been providing hurdles in the business of Iberia. Air France, low cost charters, speedy trains and other transport facilities are providing competition in the business approaches. (Tang, 2015) This competition has been causing barriers in the revenue generation and later causing operating loss. Considering the challenges and changes in the demands the airline should adapt certain strategies. The airline is already placing different offers to attract the business travellers and also tourism market. Apart from this the production of different services should be reduced. The plan should be based on minimising the expense while maximising the profit. By minimising the overall facilities the costs can be minimised. The seats or the carriages of the flights can be reduced to reduce the production cost or facility cost. The development in the transportation system and the governmental approaches in developing the transport are imposing challenges for this airline. By introducing low cost carriers or adding values in the existing ones would be effective in this context. By analysing the current leading trends and the future perspectives the organisation can be able to have better knowledge over the various perspectives of the travellers. The increasing trends of travelling for cause should considered while decision making strategic planning. Through alliances with other groups Iberia can expand its business and can have access to more potential markets. (Gran?ay, 2014)

British Airways is the flag carrier and the largest airline group in the UK. It has been efficiently placing itself in the second largest position in the measurement of carrying the passengers. Through acquisition with financially troubled Dan Air it has expanded its business. Merger with Iberia lead to the coordination in the transatlantic routes with American Airlines. Through this airlines British Airways generated £230 million in annual cost saving. The airlines has been focus on the long haul markets and valued services. The main feature of British Airways is its value added services. (Barrett, 2011) This is placing the airline in the advantageous position though placing higher cost for services. The changes in the inbound markets can be approached through the short hauls services. Short haul services with added values like renovated waiting launch, breakfast would be efficient in approaching potential business class or economic class. Apart from these different technologies should b placed within the services of BA for attracting and retaining the business markets. Setting slower cost over the long hauls would be needed to overcome the barriers placed by cost carriers. With lower price over added value BA can attract the middle class tourists. In order to expand the business the emerging markets like Asian countries, China should be approached through mergers. Through approaching diverse market it can stimulate the demands and traffic. (Barrett, 2011)

3.3 Justify strategies for how selected International Airlines businesses could respond to change. Your strategies in 3.2 need to be clearly justified with supporting arguments.

In recent times the brand value of the services of Iberia as well as the demands has been decreasing. The rising demands of the low cost services in the Europe region have been impacting over the business of Iberia. Along with the low cost carriers improved services of the local transport system and also the emerging concern of the government on advancing the transport system have been the influencing the business and approaches of airlines groups. The sustainability of the Iberia Airline has been dependent on proper evaluation of the strategies and implementation of them. (Lenartowicz, Mason, and Foster, 2013) By adding more values within the services would be efficient in attracting more customer base. The implementation of the business strategies should be done with placing more focus on the current and future trend in the market. Analysing the demands placed by different travellers or potential customers’ changes within the services can be done. By reducing the number of seat per crafts would be effective in decreasing the production and service cost. This approach would be efficient over fights with few travellers. Waste in the operations and the cost for the crews are needed to be decrease in this regard. These would be helpful to decreasing the production costs while placing more values in the facilities to attract potential travellers. Considering the routes, the focus should be placed on those routes which are effective in maximising the traffic and generating more revenues. Through approaching these routes the organisation can be able to have profitable business even in the time of economic crisis. (Lenartowicz, Mason, and Foster, 2013)

The services of British Airways have been considered as the high class services with premium price. In recent context the lower cost air services are placing greater amount of competition. The competition from the short hauls services are also imposing impacts over BA. In order to maintain the position in the competitive market the airline cannot reduce the services or the cost of the services. By cutting the prices it can place negative impression over the minds of the travellers in terms of service qualities. (Coleman, 2015) It can also decrease the number of potential travellers. The airline can place higher values and facilities within the services than the competitors. This will provide advantages in the sustainability in the competitive markets. In order to attract the mass market the organisation needs to lower the prices of the services. In this regard offering certain discounts on specific services would be needed to retain the existing customers while attracting mass market. The alliances or acquisitions with the other groups or airlines are necessary for having access over a wide range of network. Apart from these, feasibility within the services would also be needed for the placing the technological advancement and better offering. Through affordable services the Airline can place benefits for the customers. Governmental policies and their impacts should be maintained in order to perform the social responsibilities. Considering the inbound tourism market and its demand in the European countries, different facilities can be placed in the services. Through this approach the organisation can be bale to generate more revenues. (Coleman, 2015)

Task 4

4.1 Analyse the impacts of issues and trends that drive change in the travel and tourism sector with reference to Myla Travel, Thomas Cook and The Travel Network Group.

Different trends within the travel and tourism group have been impacting over the travel and tourism business sector. These trends drive changes within the business approaches, strategies of the sector. Myla Travel, Travel Network Group and Thomas Cook are different groups which are dealing their business efficiently in the travel and tourism sector. With changes in the sector these businesses can be affected. (Hares, Dickinson, and Wilkes, 2010)

Currency rates: fluctuation in the economic market in global premises impacts over the travel and tourism business. The changes in the exchange rates, currency rates and inflation rates are impacting over the purchasing decisions of the travellers. The increasing tourism in the domestic markets can be considered as the result of these. The increased price can impact over the purchase of the tourism packages from the hospitality business like Thomas Cook, Myla Travel and The Travel Network Group. Considering this situation these tourism business have to set prices as well as set facilities over the packages.

Security: safety and security issues are most important in the travel and tourism business. The increased terrorism attacks have been increasing the debts over the safety and security in the gravel and tourism. The 9/11 incident along with Paris attack have raised the security in the travel and tourism services and the security measures the destinations government. Considering these issues the UK government have implemented different policies. Through these policies the security and safety have ensured by UK government while the procedures are placing strict rules for the foreign tourists. These security policies over the visa system have been de-motivating the tourists as they have to pass through different procedures. (Hares, Dickinson, and Wilkes, 2010)

Government actions: initiatives from the government have been necessary in order to have efficient business in the tourism sector. UK government has been promoting different events and programmes to attract tourists and providing opportunities for the tourism business. Through development and renovation approaches the UK government retains different features of tourism and promotes the UK tourism in the global market. (Scott, Hall, and Stefan, 2012) These help the UK tourism business in boosting the business of Thomas Cook, Myla Travel and Travel Network Group. These increasing spending over the sport tourism of UK government have been directing the tourism businesses to place sport tourism aspects in their offering.

Technology: in recent context with the involvement of the advanced tourism the travel agent or tour operators are doing business efficiently. The business of Thomas Cook, Myla travels, Travel Network has been impacted by the technological implementations within the tourism business. Different technologies are implemented in the distribution channels like e-commerce. (Scott, Hall, and Stefan, 2012)

Trends in purchasing: in recent context the purchasing of a tourism package is dependent on the customers’ perception over the visit or travel. The current trend of visiting for purpose has greater impacting in the businesses of Thomas Cook. In order o develop the tourism products and placing them the organisations have to consider the purpose of the visitors in visiting the destinations. (Scott, Hall, and Stefan, 2012) Increasing demand over leisure tourism is also beneficial for these organisations. Through placing different offers the tourism organisations can attract potential customers

4.2 Discuss the likely consequences of businesses failing to respond to market change with reference to Myla Travel, Thomas Cook and The Travel Network Group.

Responding to changes by adapting proper strategies within the business will lead to the sustainability of thee organisations. Different factors and emerging changes within the travel and tourism market impact over the travel and tourism business. For retaining the customer base and having proper business with generating greater revenue the organisations like Thomas Cook, Myla Travel and Travel Network Group have to respond to these changes. (Higham, and Cohen, 2011) By failing to respond to these changes with efficient manner the organisations have to face the financial crisis. In order to have proper business and to have profits in the capital investment the organisations needs adapt the changes. By analysing the changes the organisation can have better overview on the future perspectives and also on the impacts of thee on the business. (Murphy, 2013) Unable to adapt the technological advancements within the services or operations the organisation might have to face severe challenges in the competitive markets.

Without analysing the changes the organisations cannot place proper collaboration within the subsidiary services. Without having proper cooperation from the other subsectors the tour operators will not meet the satisfaction level of customers. In order to have satisfied the customers or to retain them the organisations needs to evaluate the current trends within the market and current demands placed by customers. By failing to respond to these changes and new trends, the organisations such as Myla and Thomas Cook might lose their existing potential customers’ base. (Higham, and Cohen, 2011)

Through the analysis over the changes the organisations can be able to develop proper tourism product. For developing the services and the tourism products the tour operators have to analyse the forces which can impact the tour package or can make barriers in the execution of the tourism plan. To develop strategic planning over the business the tourism organisations must have the proper knowledge over the current trends which are driving changes in the tourism product. Having the knowledge over the trends and the changes the risks can be analysed before developing the tourism product or placing it in the market. Through analysing the political changes and current issues like climate changes in the destination the tour operators will be able to plan proper risk assessment plan before developing the packages. (Murphy, 2013)  This also important in providing security to the tourists as failing secure tourism experience can cause legal actions against the tour agencies.

Conclusion

Travel and tourism business has different contemporary issues within the environment of business. The travel and tourism and its subsectors are the significant contributors in the economical scale of the nations. Different driving changes are impacting over the travel and tourism business. The travel and tourism organisations have to analyse these changes and their impacts over the operations or implementing sustainable tourism strategies within the business. The International Airways Group is operating their business approaches and providing services through alliances within Iberia and British Airways. The alliances are providing access to a wider base of network and different potential routes. Through research the changes and the responds made by IAG are described.

Reference

Aaker, D.A., 2012. Building strong brands. Simon and Schuster.
Barrett, S.D., 2011. Ryanair and the low-cost revolution. JF O’Connell et G. Williams (dir. de publication): Air transport in the 21st century. Key strategic developments, pp.113-128.
Coleman, M., 2015. Regulatory Responses to the Challenges Facing Large European Carriers in the New Global Market. The Air and Space Lawyer,28(1), p.1.
Cordesman, A.H. (2016).Risks and Instability in the Middle East and North Africa in 2016. [online available at:]. https://www.csis.org/analysis/risks-and-instability-middle-east-and-north-africa-2016 . (assessed on 16/7/16)
Doz, Y.L. and Kosonen, M., 2010. Embedding strategic agility: A leadership agenda for accelerating business model renewal. Long range planning, 43(2), pp.370-382.
Goodwin, H., 2011. Taking responsibility for tourism. Woodeaton: Goodfellow Publishers Limited.
Gran?ay, M., 2014. Airline Facebook pages–a content analysis. European Transport Research Review, 6(3), pp.213-223.
Murphy, P.E., 2013. Tourism: A Community Approach (RLE Tourism). Routledge.
Scott, D., Hall, C.M. and Stefan, G., 2012. Tourism and climate change: Impacts, adaptation and mitigation. Routledge.
Tang, R.Y., 2015. International air service controversies: frequently asked questions. Congressional Research Service, pp.7-5700.
Weaver, D., 2011. Can sustainable tourism survive climate change?. Journal of Sustainable Tourism, 19(1), pp.5-15.
worldbank.org. (2016). Middle East and North Africa. [online available at:]. http://www.worldbank.org/en/region/mena/overview .(assessed on 16/7/16)