Travel & Tourism Sector

Impact of Travel and tourism.

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Introduction to Travel and Tourism Sector

In the travel and tourism sector, the number of tourists is increasing day by day and it is continuously facing a lot of transformation. It is the most dynamic industry that is certainly offering high amount of revenues to the national government and also a wide range of opportunities to different individuals. With the changes in time and more globalization, the demand of travel and tourism sector is increasing in terms of leisure travel and also for business purposes. The present report mainly focuses on the influence of local and national government as well as international agencies on tourism sector (Law and Jogaratnam, 2005). The demand of the customers depends on the services provided to them and their income level. Further, it also represents the overall impact on tourism. Different travel industries can easily minimize the negative impacts by adopting various strategies. 

Task 1 History And Structure Of The Travel And Tourism Sector

In today's globalized world, one of the fastest growing sectors is travel and tourism. Tourism is one of the most effective parts of the people's life as they can easily move from one destination to another. In the past years, at the end of the Second World War in 1945, there was a major development in the travel and tourism sector. The industry has grown rapidly since 1950s. It mainly includes the changes in the socio-economic circumstances, development in technology, changing customer needs and expectations, product development and innovation etc (Clarke and Chen, 2012). With the changing time, the income level of the people also increases and it allows them to travel more often. It also increases the level of overseas holidays and people are more concerned about these leisure activities. Various airline industries also contributed towards the growth of domestic and international travel and tourism. Domestic tourism provides the facility to all the residential people to travel within their country of residence. UK travel and tourism industry has grown rapidly and faced lots of transformation.

In addition to this, inbound tourism involves non-residential people travelling to a given country. There are various tour and travel agencies which provide different facilities to their customers. It is one of the most important factors which help the company to increase their market share. Development of seaside resorts, introduction of holiday camps, packages and all the attractions have been introduced in order to meet the changing customer demands and expectations (Gujar, 2012). Different historical places are the major attraction for the people. With the changing time, in London, a medium sized Museum is going to be open. It has been started for the purpose of Olympic 2012. All the plans should be decided as per the customers’ demands and their expectations. All the information related to the history of the museum needs to be collected properly so that the overall sector of travel and tourism can attain higher market share. 

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Travel and tourism sector is one of the most fragmented sectors and it can be viewed separately. This sector mainly includes the public sector organizations as well as other industry players. There are various offers presented by the different consultancy firms and the overall structure of this sector includes the transportation services as well as tour guides, accommodation, retail travel agents and various other event organizers. The structure of this industry includes various travel as well as tourism services (Pike, 2005). These services are provided by the different travel agencies and they can easily attract number of customers. Each and every public sector organization has different responsibilities such as department of transportation, department for culture and foreign and commonwealth office. Various transportation services help in maintaining the structure of the travel and tourism sector. Delivery of different products requires the airlines services through which they can easily deliver the services to all their customers. In any market, vertically integrated and operating services are provided by four dominant firms such as RUI, MyTravel, Thomas Cook, and First Choice. 

Tour distributors mainly include business and leisure travel agents with the niche parts of market. Distributors are assigned to different tourism agencies through which they can easily provide the information to all their customers. Consumers can book all the services online such as transportation services as well as accommodation services. Other industry players involve the car hire company and insurance firms that offer services to the tourists (Ruggles,  2008). Regulatory bodies provide federation of tour operators, Consortium of Independent Tour Operators, etc. It can be easily stated that the museum of travel and tourist industry that is going to open in London needs to be prepared with the well set plan. Different tour operators and travel agencies are required to be hired for the promotion of the newly started Museum.

Task 2 Influences Of Local And National Governments And International Agencies

2.1 In any travel and tourism industry, the government plays a major role through which they can control all the policies related to tourism. It has its higher influence over the different organizations those are operating in this industry. There are various functions as well as roles and responsibilities of the government. They need to effectively manage all the policies and the developing world generally has the responsibilities of formulating and enforcing the tourism policy. It is necessary to reduce the leakage of foreign exchange earnings and increase the economic impact of the tourism on the local economy (Youell, 2000). There are mainly two types of roles for the effective functioning of the government. It may be direct involvement and indirect involvement. Direct involvement of the government provides the overall infrastructure as well as the development in these communications. There are various laws and regulations owned by the government which provide the safe environment. It is the major responsibility of the government to provide high security to all the tourists as well as the local residents. The direct involvement of government includes terrorism, stability, crossing international borders as well as transportation (Swarbrooke and  Horner, 2012). 

In addition to this, indirect involvement provides full support to all the private sectors as well as various incentives. Further, the government can provide them relief from the tax to the hotel industry and provide subsidies to assist seasonal business. It is very essential for the government to encourage proper use of all the heritage sites and culture. 

2.2 There are different local and international policies made by the government which highly influence the success of the travel and tourism sector. They need to fulfill all the requirements of the customers and set the plan as per their requirements. Local policy determines how to keep the local tourism secure whereas international policy determines how to generate greater revenues from the international visitors (Bharwani and Butt, 2012). Local visitors know more about the local services and visiting destinations so it is essential to set the policies as per their understanding. Most importantly, the government needs to promote and develop the tourism despite the regular changes into it. It mainly provides the funding and strategic direction for increasing the health and vitality of the tourism sector.

2.3There are various factors which can put impact on the business operations of travel and tourism sector and the political changes are one of them. Other than this, it is also clear that with the help of proper assessment of these factors, the company can definitely improve their operational and functional efficiency. Travel and tourism sector is very wide and its scope of activities into different countries is also very broad. Out of the various environmental factors, the company has to focus on political changes (Mehmetoglu and Normann, 2013). The major implication of political changes is their governing style. Sometimes the government is more focused on earning the profits and revenues from the business houses, so they implement a variety of taxes and duties on the companies. It puts burden on the organizations and their pricing strategies can be affected. Further, the economic system of different countries is completely different. It is clear that the company can face more political intervention if socialist or mixed economy is active within the country. Apart from this, entry barriers can be faced at a very large scale (Riege and Perry, 2000). 

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 The list of political changes is very big; in different countries the organizations can face lots of restrictions and barriers due to political strictness. Local corporate bodies can also put restrictions on the business activities of the tourism sector. The political change refers to the legal policies related to environmental issues or any other issue. It is to acknowledge that if the incumbencies of any government is committed to yield more profits from travel and tourism sector then they will surely lay down huge emphasize on the development of travel and tourism sector which could be treated as a positive factor for the cited industry or sector (Smith, 2003). Thus, in this way, it is clear that both positive and negative consequences of political changes in different countries can be witnessed by travel and tourism sector.

Lo3 Effects Of Supply And Demand On The Travel And Tourism Sector

3.1 One of the most important tasks of any tourism industry is to attract a large pool of customers towards their services. With the changing time, the demand of all the tourists is also rapidly growing. It can be easily defined as the ability of the consumers to buy different amounts of tourism products. There are various factors that highly affect the demand of the customers such as:

Income of the customers: Customers can purchase different tour packages as per their income and it is one of the most factors that affect the overall business of the industry. At the time of recession, the overall travelling population decreases (Timothy, 2007). It majorly drops the demand of tourism as they cannot easily hire the cost of their services.

Expectation of customers: In the recent trend, things are changing rapidly and it directly affects the demand of the customers. The taste of the consumers depends upon the recent trends and developments. If anything related to the taste of the customers goes outdated, the tourism demand drops down. It is very essential for each and every country's tourism department to manage their overall tourism sectors as per the customers’ demand. It will help them in easily growing their business and further they can increase higher market share.

The cost of complementary goods: It can be easily described with the help of different resources that are used in the business operation of the company. Different airline industries can increase the price of all their airline services and it will lead to decrease in the demand for tourism (Pitt and Hinks, 2001). 

Globalization: It is another major factor which requires interaction and integration among people, companies and government of different nations. It has its significant effect on the different activities of international trade as well as cultural change. It also affects the overall tourism of the country.

These are some of the major factors that highly influence the demand of all the customers. Other factors such as influence of currency exchange rates also affects the tourism demand. Museum that is going to be started in London needs to fulfill the overall requirements of all the customers. Olympics is one of the most important events that helps in boosting the overall sport tourism (Gray, Matear and Matheson, 2000). The creation of employment and more income is a huge benefit of managing all these activities. Museum needs to fulfill the overall requirements of the customers and match the requirements of their income level.

3.2 It is very essential for each and every tourism industry to set their services according to the customers’ demand. It will help them in increasing their market share as well as the profitability of the firm. Supply of the various complementary goods and services needs to be changed as per the consumer's requirements. There are various provisions that highly influence the overall service sector such as accommodation. In today's global environment, people are very conscious about the leisure services. There are several facilities, such as they can online book their tour packages as well as airline tickets. But it all depends on the customer's income and economic condition of the country (Ford, Sturman and Heaton, 2011). London has become the brand image and one of the major attractions for all the sports activity. These activities help in maintaining the brand image. Different Olympic Games will help in creating a distinct image in the mindset of tourists. It improves the tourism figure of the country with the help of huge economic rises. The supply and demand factor works positively and the demand of all the related business increases suddenly. It helps in the overall economic growth of the country and also raises the infrastructure development. Most of the people in the country easily get employment is one of the best positive factors (Gujar, 2012). One of the most important tasks of all the tour operators is to provide quality services to all their customers as per their requirements. The demand of the customers is changing as per the changes according to the season. In the summer season the demand of seaside places are on its height and the area in which these places are situated needs to increase the supply of services. 

Task 4 Impact Of Tourism

4.1 There are various positive as well as negative impacts of tourism and it will sometimes leads to decrease in the profitability of the company and sometimes generate more revenues. This industry mainly brings economic and social benefits such as:

Economic effects: It is one of the most important and positive effect which helps the companies in increasing their market share. Tourism creates direct employment within the tourism industry and indirectly in sectors such as retail and transportation. Tourism industry provides different opportunities for small scale business enterprises. It especially helps in the rural communities and further they can generate extra tax revenues such as airport and hotel taxes (Ready, 2002). The Museum that is going to open in London will easily attract a large pool of customers if they have set their plan as per their requirements. Positive economic factor is that it helps in creating more jobs.

In addition to this, some of the negative economic factors affect the overall tourism. Successful tourism relies on various factors such as establishing a basic infrastructure such as different visitor centers etc. The cost of all these infrastructure development depends on the government and it will create more tax revenues. Various jobs created by tourism are often poorly paid and seasonal in nature. It will directly increase the local property prices and the cost of goods and services. Terrorism is one of the most important factors that will lead to decrease in the overall tourism of the country

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Social Effects: Higher development in the infrastructure results in the benefit of the local community. All the traditions, customs as well as festivals are highlighted by the different tourism activities. All of these traditions are followed by the different cultures and it encourages the overall tourism. On the other hand the behavior of all the visitors can have a harmful effect on the quality of the life of the host community.

Environmental effects: Nature and ecotourism supports the overall wildlife and different natural resources (Swarbrooke and Horner, 2012). It also helps to generate the funding for maintaining animal reserves. Tourism can easily reduce the problems of deforestation in developing nations by creating alternative sources of the employment. On the contrary, tourism also poses a threat to region’s natural and cultural resources. It also causes pollution through traffic and emission. 

4.2 In order to minimize the negative impact of tourism, industries can adopt various strategies. It will help them in increasing the positive factors of the industry. With the help of this, the tourism industry can reduce the impact of deforestation (Timothy, 2007). There are various measures that can be adopted by the tourism industry such as:

  • Eco-Tourism: It will help in preserving the wildlife and the environment. It also helps in reducing the social conflicts between different authorities.
  • Green Tourism: It is all about ethical and sustainable tourism. It also involves all the local people in making decisions that affect their land and living. It also helps in improving the preservation and transmission of the cultural and historical transitions. With the help of green tourism, visitors can enjoy unspoiled nature and landscapes as well as environmental quality of the goods and services. Eco-tourism is also the part of green tourism.
  • Implementation of strict law: In order to minimize the environmental effects on coral and all the other threatened habitats, all the natural resources should be managed more efficiently (Gujar, 2012).
  • Diversification of product range: With the help of opening up new adventures it is important to diversify their countries product range.
  • Need for higher management: In most of the cases effective management only begins after tourism.


From the above report on travel and tourism sector, it is concluded that the growth of this industry mainly depends on the quality of the services they are providing to the customers. The major learning of this report is that the government plays a vital role in it and assists and supports in effectively boosting the tourism sector. Supply of all the products and services needs to be changed as per the consumers’ demand. The company can adopt different strategies such as eco-tourism, diversification, and green tourism in order to enhance their services. Tourism industries can easily minimize the negative economical, social and environmental impact of the tourism.


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