Travel And Tourism Sector

Area of travel and tourism Industry

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Introduction travel and tourism sector

Travel and tourism is among the fastest growing service industry in the world. Its share has been increasing significantly in every sector. For every country it has become the source of revenue generation and foreign exchange earnings. Along with this, increase in market share, it holds considerable position in generating employment due to its integrated nature. Since its inception from the informal tour in the form of moving from one place to other at holy and religious places, the area of travel and tourism sector has been widened to the great extent with the recent planned and structured tours and trips (Beggs, Ross and Goodwin, 2008). Traveling is not confined for the purpose of recreation and leisure activities, rather it has large domain such as for knowledge seeking and education, business interests, health and fitness purposes, for sports, entertainment and adventure. Report has been prepared to elucidate the different components of this sector in London such as its historical development, structure in which it operates role of different bodies and agencies, impacts of external and internal factors. Further, suggestions have been made to rationalize the consequences of travel and tourism in London.

Historical development in the travel and tourism sector

Travel and tourism globally has become the cause and consequence of economic development in terms of gross revenue and foreign exchange earnings. London is the most popular tourist destination with impressive monuments and rich vibrant culture. The key milestones in the development of travel and tourism sector of the city are as follows:

The Grand Tour facilitated by the British elite class between the late 16th and early 19th centuries gave rise to new horizons of tourism, rather the beginning era. In the Industrial Revolution period the demand for tourism raised enormously mainly due to introduction of package tours services in 1841, paid vacations benefit to the middle class, the strains of modern life created demands for rest and recreation (Dickinson and Lumsdon, 2010). The growing urge and interest to explore the remote lands and people.

Contemporary world is considering London tourism as leading component of world trade.   Merger of English Tourism Council and British Tourist Authority as Visit Britain is the feather in cap. As it conducted programs of preserving, maintaining and promoting eminent historic castles, palaces and monuments like Buckingham Palace, the Victoria and Albert Museums, Tower of London, British Library (Falk and, 2012).

London has always made an extensive use of new technologies and science for this industry. In future increasing competition will force it to make use of internet and sophisticated databases for marketing purposes. On the other hand, development of factors promoting the 'go green' motto in the cultural and environmental context too will be considered and developed.

Further, following are the different factors that facilitating the growth of the industry:

Changing socio-economic scenario: The increase in one parent households, people of London's social changes and demographic trends played an important impact on the future development living longer, falling percentage of young population, increasing car ownership and higher income levels will radically change the travel and tourism products and services.

Development in technologies: The research and development in the field of science and technology for tourist products helps in the growth of London economy (Mamaghani, 2009). The evolution of jet aircraft, computer programming and 3-D effect technology have bestowed to the growth of Visit Britain, the regulator of the tourist body.

Infrastructural development and innovation: There is accelerator y investment by the London government to provide better and widespread infrastructural development to promote its tourism. The strategies of providing better road, rail and water connectivity to the city makes convenient for the visitors to explore even the remote areas, culture and citizenry of London.

Money, the key factor: With the coming up years the gross revenue and income of the London economic structure will prosper the financial gain of the public. Resulting into changing consumer needs, expectations and fashions (Cook and Marqua, 2014). Through exposures to television, print and mass media, internet, people are looking for more opportunities to travel in UK and its popular tourist destination, London.

Structure of the travel and tourism sector

Travel and tourism sector functions in an integrated manner. Different sectors work in the collaborative manner in which each of them has the role to play in the industry. There is a systematic and structured way in which the organization associated in their functions. It is as follows.


Hospitality is the core area of the travel and tourism sector in which all the segments caters to provide optimum level of services to its visitors and travelers to accommodate their trips.

Tour operators: Tour operators are the organization that put all the different components such as transport facilities, financial services, accommodation, as well as ancillary services and provide them in the form of packages. These organizations facilitate consumers by catering all the zones of tourism, inbound, outbound as well as domestic (Medlik, 2012).

Travel agents: To ease the work of customer, these individuals or organization provide complete information about the available options and give advise them as per their suitability and requirements.

Ancillary services: In support of travel and tourism sector, there are some services that function such as financial services, Insurances, marketing agencies, guide services, media services and private training services. Apart from these mentioned private bodies there are some public sectors such as Department for culture, media and sport which support the industry at National level. Other bodies are Visa/ passport office, education and training establishments.

Accommodation: In this segment, there are different forms of accommodation facilities such as hoteliers, villas, cottages, apartments and guest accommodation for the consumers (Thrane and Farstad, 2011).


Transport has been the artery of nation that connects people, makes the tourism sustainable and also facilitates the trade activities. It has been crucial element in the travel and tourism sector as it enables people to visit different country. . Industrial revolution has been the key reason due to which there has been significant transition in traveling, making it faster and easier. There are different ways in which transport operates in London.

Air travel: Airlines play vital role in this sector. In domestic as well as cross the border it affects tourism by facilitating the visitors.

Road transport: Basically, for the domestic tourism road transport has been the adventurous option for the travelers (Brunot, 2015).

Cruise travel: In the recent times, it has been the major section of attraction for tourists as through cruise travel; operators intend to provide memorable experience to patrons.


Natural attractions: The fundamental component that initiates the travel and tours are the natural resources available in the country which attract people from around the Globe. It refers to beautiful beaches, eye capturing places and spectacular river coasts and art creations.

Manmade attractions: Along with the natural attractions, country has many man-made places to visit such as museums, monuments and many others (Sigala, 2011).

The functions of government, government sponsored bodies and international agencies in travel and tourism sector

The crucial role of travel and tourism sector has always been recognized by the UK government. The enforcement of Development of Tourism Act 1969, was to coordinate all the organizations working in respect of UK's tourism. Apart it also provides financial assistance through public funds. Another regulation Package Travel, Package Holidays and Package Tours Regulations 1992 subjected all the tour operators to offer packages accordingly. Techniques and improvements like- usage of the internet, formation of call centres and new outlets on digital and cable TV are used (Garín-Muñoz and Pérez-Amaral, 2011). Further, needs for better connectivity to meet the demand of the visitors arouse. Therefore safer, faster, affordable and comfortable travelling through air, rail and road established. Reports have analysed that the government flexibility is desirable in order to get desired results.

UK tourism comes under The Department for Culture, Media and Sport. Here the working structure occurs at three levels: National, regional and local. The four tourist boards are: Visit Britain, Visit Wales, Visit Scotland and Northern Ireland Tourist Board. These boards are of great importance to promote destinations and to coordinate with private sector tourism businesses. These are funded by central government sources. The towns have Tourist Information Centre led in supervision of the local council (Pezzullo, 2009). These information centres cover some specific areas of working like for example promotional brochures, websites, accommodation booking services, sports and leisure centres, theatres, museums and art and craft gallerias. They also provide services for accommodation and incorporate selling of locally made crafts and gifts. The Department for Transport undertakes the responsibility for a roads, railways and the London Underground.

The UNWTO agency is responsible for economic growth, promotion and sustainable development of world's tourism industry. It regulates educational institutions, tourism associations, members of the tourism authority and local tourism authorities worldwide. UK also is a benefited member of it. The other prominent organization of the tourism industry is World Travel and Tourism Council. It deals with the travel industry business executives. UK tour operators are member of Tour Operator Associations which deals in the respective areas (Tourism & Political Change. 2014). So, it is clear from above context that there are various key governing bodies and international agencies and organization which are working for travel and tourism industry. 

Influence of local and national economic policies over travel and tourism sector

The United Kingdom has the fifth largest tourism industry in the world. Its travel and tourism industry is influenced by the economic policies framed by the UK government. There are number of consequence in the context of influence of the economic policy of a nation on its travel and tourism sector. Starting with an example, if the local authorities of UK subsidies the building rates for a resort, the tourist industry will surely be benefited. This is an example at a regional or local level but if it is considered at national level then the benefits and the outcomes doubles and triples (Ashleyand, 2007).

The HM Treasury, the government department responsible for the British government's public finance policy and economic policy. When it frames economic policies it has direct and indirect impact on the mentioned sector of economy. The relaxation in the tariffs and taxes on the travelling activities promotes the expansion of the industry. A boom in the number of travellers and tourists are able to make great advantages, increasing the GDP of the economy. Same-as, when the UK government implements the policies in favour of huge investment schemes, the tour operators and other related business executives are too driven (Khare and Khare, 2010). The monetary policies of the UK government indirectly affect tourism out there. When the exchange rate for its currency falls tourists are at profit. As it causes country's currency to fall and it becomes cheaper to have vacations in the exotic destinations of UK (Buhalis and Foerste, 2013).

Implications of travel and tourism sector in different countries

The political stability and instability of a country has a strong impact on its tourism business. If a country's political scenario is unsafe it rises feeling of distrust among the outsiders. While, if there is stability in the political context then more and more tourists are attracted towards the nation. As it is known in today's world Dubai is the first choice for tourists to have a memorable experience of their travel. The main reason behind it is positive attitude of the government bodies and political parties towards planning, organizing, framing and implementing polices and plans in the favour of the tourism sector. The economic reforms framed by the government officials and involvement of political leaders enrich the field areas (Serenko and Stach, 2009). Same is the case of The United Kingdom, here the political stability resulted in prosperity and development of various tourist spots. Various organizations provide equivalent support to enforce the policies in right manner.

As described earlier, the political instability or unwarranted environment of the country gives a pessimistic approach into the minds of travellers. Like for an example the case of Jordan and Syria, where the whole economy is threatened with the terrorist attacks, political instability and violence. Stunned by these factors outsiders hesitate to explore their tourist regions resulting in the ratio of gross revenues and income gone very low (Bell and Parker, 2009). Whereas nations like India and Nepal are at growing and developing stage as political system supports tourists through financial relaxation.

Factors that affect the demand of tourism

Since the inception of tourism sector limited for the group of elites of UK which was organized including the limited section of the journey but these days it has been permeated to the mass of general population. Visiting for the different purposes and occasions, perception and choices of travelers has been changed to the large extent. With the evolution of travel and tourism sector it has necessitated the organizers to be cognizant of all the issues and the changing scenario. The intimate and in-depth knowledge about the changing trend helps the operators to come up with required facilities and needs. TUI group has been counted among the top four operators, which always seeks to incorporate all the components of tourism to make every stratum of journey comfortable for the travelers. Transition in the culture and needs in sectors has been explained in different dimensions (Bălan, Balaure and Vegheş, 2009).

Political: Realizing the significant share of travel and tourism sector in GDP of a country, government has increased its role in the up-liftmen and development by addressing all the areas of its working. In national policy framework, these sectors play a crucial role. Separate policies are framed to improve the situation. Involvement of political representatives in attracting tourism in country have increased such as for trade and agreements, showcasing countries offerings, attracting health tourism, for education and learning purposes and many others. Involvement of political representatives leads to the expansion of business of TUI group with respect to sales, profit generation and increased visits of customers from around the Globe.

Economic: Economic situation prevailing in the country has the considerable role to play in boosting and encouraging tourism in the country. Economic advanced country has the larger share in world with respect to this industry. Countries where per-capita income and disposable income is high, people prefer the tours and trips more in comparison to the country which is facing financial crises. Further, the economic situation of a country has the key role in developing and encouraging industry on domestic as well as Global level (Crotts, Mason and Davis, 2009). It helps in improving the infrastructure, facilities available to the patrons, services provided by the different components in the sector. When economy is at boom in the country it is operating, it escalates the business of TUI group on the contrary recession in country lowers the profit margins as it requires to lay more emphasis on other segments such as marketing, investments and other related which has direct impact on its financial condition.

Social factor: Social factors refer to the preferences and choices of persons with respect to the requirement and needs for tours and trips. Earlier operators used to work in isolation and their services were confined to the accommodation of traveling. These days’ operators and agents work in the integrated form that means with vertical and horizontal integration with similar of related industries. Consumer seeks that all the services are available at one place hence accordingly services are provided (Guichard-Anguis and Moon, 2008). Realizing the diverse choices of travelers, TUI group offers wide range of products with personalized and thoughtful services that satiate the needs of customers.

Ways in which supply has changed to meet the effects of demand

With changing scenario of demand of tourist, supply trends have also experienced transition. There is the significant evolution in the offerings by different agents of travel and tourism industry. To satiate the needs of consumers each caters to provide the best possible services in the planned and systematic manner. They keep in consideration every element and address them in a very structured way. Along with the core parties such as tour operators and travel agents several other components have also integrated with the industry such as financial service providers, government agencies, non profitable organization working in the area (Dwyer and Forsyth, 2008). Domain of supply has changed in the following three aspects by the TUI group.

Travel and transport: To fulfill the different choices and preferences, TUI group provides vast range of choices to the customers in air travel, road transport and cruise journey. Along with to provide the different experience TUI group also make available the carrier cart, electronic traditional cars at historical places and many others. Further, apart from services for recreational purposes, operators provide facilities of travel and transport for the travelers who come for business interest and other reasons such as sport events, educational tours and for medical reasons (Standing, Tang-Taye and Boyer, 2014). For them operators make arrangement of transport facilities in the form of buses, cabs or other required mediums.

Recreational activities: Travel and tourism has the core area of filling the entertainment and recreational needs of consumers. TUI group provide services in different forms such as it is segmented into cultural activities to make the visitors aware about local culture, recreational activities such as organizing different sports such as Golf, amusements at casinos, music and dance and many others. Along with different segment added to the group for the adventure lovers (Impacts of Tourism. 2014). Different activities are organized for them like scuba diving, mountain climbing, skydiving, forest safari, exploring adventurous places under the supervision of expertise and specialists.
Ancillary services: In support of core areas nowadays TUI group caters to provide the optimum level of services to customers such as financial services, insurances, advise and consultation and many other are provided.

Accommodation: One of the very important section of journey is the accommodation and food services. To fulfill the needs of customers, wide stream of choices has been offered to them on the basis of their requirement and budget. TUI group offers the facility of different types of packages in which accordingly options are available such as hotels, inns, villas, cottage houses, guest accommodation, lounges and for food services agencies caters to provide the scrupulous delights with the availability of different cuisines of the national and international level (Uzama, 2009). At hotels facility of multi-cuisines is available to give the experience of food culture of different corners of world.


Escalation in the share of travel and tourism industry in the GDP, market share and in the working of country has boosted the industry in very significant manner. Domain of working has been increased a lot with the inculcation and advancement of different components. Tour operators adopt the integrated approach to provide the services to their visitors and customers. Present study has been made in reference to London and UK. From the report prepared, it can be articulated that changing needs and choices of people has brought transition in the face of services supplied by operators and other agents.


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