Introduction
In this assignment I am going to analyse the impacts of issues and trends which drives changes within the travel and tourism sector. I will also be discussing the likely consequences of businesses which are failing to respond to market changes.
4.1 analyse the impacts of issues and trends that drive change in the travel and tourism sector-
Employment- as the industry is gaining greater respectability and recognition where it attracts more than its fair share of qualified young people whiling to see the world and to also enjoy the sights and sound which they are exposed over internet. Mobility is increasing as internet websites allows people to find work in different parts of the world. There are going to be great demand for people with different language skills and the ability to work in different cultures. When linking this to EasyJet they have made a really big improvement whereas a lot of people are travelling with EasyJet and that they are also making a lot of money and profit on top that they have been recruiting people for permanent and for certain seasons and the main reason why they are recruiting a lot of people is because a lot of people are using EasyJet to get to their destinations so therefore there is more employers needed therefore they have rapidly been recruiting more people, making changes and making good improvements within their industry in order to attract more customers.
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| Source: (employment, 2015) |
Technology- it has been told that travel agents are going to become just part of a regular distribution equation and would also need to earn their keep based on their productivity for supplier new multi-channel strategies which is being announced by airlines, and soon to be followed by hotels which will involve distribution of their products through internet, direct sales, frequent flyer database, corporate suppliers and agents. As a European airline which they have said is that announcing the new strategy “In a world where 100% of frequent travellers have a mobile phone, 85% has a computer and over 50% are using the internet a number of times a week where they must adapt their distribution to these new conditions”. It has been told that there are more internet auctions to come from everything such as hotel rooms to advertisement. Microsoft Expedia has now expanded to Europe and has said that Asia is going to be next. Linking this to EasyJet it has been told that EasyJet is working with Coptercraft, measurement solution and Bristol Robotic Laboratory in order to improve on their existing technology in order to let drones inspect fleets of Airbus Aircraft. These drones are going to be created in order to scan and assess the planes if they have any damages where it might need further inspections or maintenance work. These drones are currently being developed and also being viewed to try them in the coming months and introducing them into operation as early as next year. They are also creating something called the 3D tech which is glasses which is one of the world’s first high definitions to see through display systems, providing augmented reality helping EasyJet to remotely diagnose any technical issues. They have also come up with an EasyJet app which makes it for their customers so much easier whereas people can book tickets from their phone, you can check-in from your phone, at a selection of airports, you can access your boarding pass and also download it later from your mobile phone where you do not need WiFi or any other network connections, you can also download multiple passes and at last it is also available in 7 different languages which makes it easier for people who doesn’t understand English.
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| Source: (technology, 2015) |
Holiday trends- there was a recent study undertaken by the World Tourism organisation within the impact of global economic change on employment and holiday taking patterns which concludes that there are going to be more trends towards more shorter holidays against fewer and longer holidays which mainly is due to the time which it constraints and job insecurities. Though labour laws and its working condition in many countries they are rapidly moving towards giving more free time, corporate downsizing which leads to many executive in order to work overtime mostly at home. When talking about holiday trends I am linking this to TUI because the holiday trends has all been changed whereas they have a lot of different tourist types such as groups, individuals, single women, families, OAP, Gay people, couples and there are also people who doesn’t want holidays where there aren’t any kids running around and screaming around. In this case TUI which is one of the world’s leading leisure Travel Company they have released their findings of what trends are currently occurring within the travel industry. TUI has taken 13 of its source markets in order to examine the possible holiday trends among every season where they wanted to check if there are any similarities or differences between them. The results which was published as part of an infographic it took it into the account of different categories, ranging from top holiday destinations, most popular short and long haul destinations, as well as the average length of a traveller’s stay and even their favourite time of year to travel and what tourist type they want to be at where the results did have similarities and differences.
Age UK have developed various of options for elderly people to choose from, they have various of options in holiday types such as holidays for singles, UK breaks, escorted tours for Europe and Worldwide, city breaks, gardens, cruising on big and small ships, rail, beach, tailor made holidays, special interest holidays and also the option of mobility and care which where they offer a package where older people can chose their suitable accommodation with the facilities they may need “Travel and relax on holiday with complete confidence that the hotel, cottage, lodge or apartment you choose will suit your need (Ageuk.org.uk,2015).
Technology- where the act makes further provision with respect and responsibility towards the power in relation to scientific research and where they also relate matters of the secretary of State to the minister of technology and to also other chartered bodies and other organisations for purposes and connections for technology.
They have following bodies which are established or are to be established by Royal Charter should be a research within the council for the purpose of its act is:
- The medical research council
- Majesty which is pleased in order to establish such a body, each of the bodies respectively which is referred to this act as science researches council and the natural environment towards the council.
- Other bodies which are established in order to purpose connection and scientific research to consist of persons appointed by the minister of crown and which also is declared by the order of council and which is also established to research about the council technology purpose act.
Research council should be a body establishing the main objects which consists or is comprised by the following, namely, the carrying out of scientific research, the facilitating, encouragement and support of research by other bodies or persons or any other description of bodies or persons and instruction by the science and technology and at last the dissemination knowledge in technology.
Easyjet are the first airline to trial ‘iBeacon’ which is a technology that aims of helping passengers to a better navigation their way throughout airports. This technology is being trialled at Luton, Gatwick and Paris Charles de Gaulle airport, which prompts notifications to passengers mobile during critical points of their journey. These messages are activated automatically as passengers approach the bag drop and security where it vibrates to let them know to have their boarding passes ready to scan and also reminding them when passports also need to be presented.
The aging population is currently one of them trends which drives within the travel and tourism industry because as stated in VisitEngland it has been told that this generation is living longer which means that more generations create more family occasion which it turns into creative more opportunities for family get-together (VFR). They are also wealthier and also have more spare time, so within the spare time they go on holiday activities, therefore businesses are now tapping into that trend because that is one way of making money, by selling different products within that specific target market.
The impacts which change the sector structure could cause the business to;
- Merge into another business
- Acquisitions (takeover)
- Go into liquidation
Merging is when two companies or more combine, where it generally involves one company and its stockholders surrendering its stock (assets, accommodation, travel agent/airline allocations) in exchange within the security that would have other company.
Acquisition is that it co-operates action when a company buys out some if not the whole of the other company’s stakes in order to have control of the other companies firm. An example: Thomas Cook merged with the company called My Travel, the reason for this was that the consumers started booking their holidays differently (online booking). Michael Beckett, chairman of MyTravel, said: "Thomas Cook is a household name and the joining of the two groups will create an even stronger force in this highly competitive market." (BBC, 2007).
The benefits of mergers and acquisition to the customer are cheaper holiday, better quality holidays, guarantee line of supply and less dependency on other suppliers.
The benefits of mergers and acquisitions to the company: increased profit for the company less competitors, greater market share and power so therefore there is more access to the other market and increases in cost efficiency (lower costs).
The negatives of mergers and acquisitions within the company tells us that sometimes the value of the company could get ruined, whereas the flexibility could also be reduced due to large company so it is harder to manage, they could care less flexible in order to introduce new innovations to the market, there could also be a negative effect on the workforce where it is disruptive. The corporate brand strategy receives serious attention only after a deal where it is approved or where the merger is announced (Ettenson & Knowles 2006).
Liquidation which is a process where an business or part of an business comes to an end and where the companies are assets and where properties are relocated. An example of a company which went into liquidation is British Airways in 1997 where it has been announced a launch of its low cost airlines to 21 European destinations so that it meets the changing demands for air travel to Europe. It was undertaken by the project called Operational Blue Sky but unfortunately the fuel prices went up and airplanes started to get more expensive therefore they didn’t break even and haven’t made any profit and cancelled the project (Cope, 2000).
4.2 discuss the likely consequences of businesses failing to respond to market changes
Climate change is an major change which affects within a global level, everyone is trying to be more eco-friendly within the travel and tourism industry, there are hotels which has decided to help the environment by using solar panel and even other sources of electricity as well as also contributing by recycling and also looking after environment around them and not only them but also encouraging guests as well as staff to pick up rubbish in order to look after the environment.
An example could be;
- Euro Star using less carbon off set energy.
- Easy Jet 25% less carbon full flights
- KLM invest in schemes in India to off-set carbon footprint
Consequences if business do not respond to the market change
When talking about the consequences of businesses it tells us that it does not respond to the market change because it would risk the reduce of sales and or profitability, profit margins ( when income of the sale exceeds the costs of making the product or service) which the attitudes of customers could change and decide to use another company ( a competitor) where the same also goes to suppliers for example if a business is not doing well and is not also getting enough profit in order to pay the supplier, the supplier may change their attitude and also go work in order to supply someone else. Above all, failing to respond within the market change it could give a bad image to the company or the product and service which the company provides.
To conclude if a travel and tourism business fails to respond to the market change, they will then automatically start losing customers because of them not meeting customer’s needs, wants and also expectations, and as a business these three things should be an important aim in order to stratify the customer, which where that is the correct way of attracting customers and them coming back over and over again because of you as a business meeting their needs and expectations. Customers do meet a competitor within the market which would meet their needs, Maslow (1973) theory shows that in order to for a customer to feel satisfied the business organisation would need to have responsibility in order to meet their needs so that they can reach self-actualisation. An example could be if a customer is expecting to book their holiday in a more easy way as a result some tour operators and travel agencies have therefore moved into online booking where the customer can book their holiday from the comfort of their own home environment.
BY TJ ! :)
REFERENCE
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