The European Tour Operators Case

Topics: Value chain, Strategic management, Tourism Pages: 10 (3189 words) Published: February 17, 2013
PART A: The European Tour Operators Case
The first part of the Portfolio Assignment will include an analysis of the external environment of two large travel companies, Thomas Cook and TUI. The three models that will be included and discussed in the first part of the assignment are PESTEL, Porter’s Five Forces and Industry Life Cycle. These three models should be done for both of the companies. For this assignment I should also briefly discuss the overall attractiveness of the industries and identify the opportunities and threats. Background information of Thomas Cook

According to Thomas Cook’s leading website (, Thomas Cook is the second largest leisure travel group in the UK with around 19,000 employees and has a network of more than 800 high street stores and some of the world’s favourite travel brands including Airtours, Cresta, CruiseThomasCook, Direct Holidays, Elegant Resorts, Essential Travel,, Gold Medal,, Neilson,, Pure Luxury, Sunworld Holidays Ireland, Swiss Travel Service, The Big Snow Festival, Thomas Cook, Thomas Cook Signature, Thomas Cook Tours etc. The Company’s airline, Thomas Cook Airlines, operates a fleet of 44 aircraft and flies from numerous regional airports to destinations worldwide. Background Information of TUI

According to TUI’s official website ( TUI Travel PLC is a FTSE 100 leisure Travel Company listed on the London Stock Exchange. TUI Travel is one of the world’s leading leisure travel companies, with over 200 trusted brands in 180 countries and more than 30 million customers. TUI is a global business and at the moment employs approximately 54,000 people and operates in 31 key source markets worldwide. The TUI business is grouped into four sectors, consisting of many of the market-leading travel brands worldwide – Mainstream, Accommodation & Destinations and Specialist & Activity.

1a. PESTEL Analysis for Thomas Cook and TUI
Political Factors
Political influence can affect almost every industry because of the huge influence upon the regulation of organisations which are imposed and monitored by the government. These include legal matters or authorities government regulations under which organisations should operate. As Thomas Cook and TUI are both UK based businesses, and political environment of UK is one of a most attractive and stable comparing to the other areas of world, matters such as war against terror and enlargement of EU have had a consequence on the political stability of the authorities. Great Britain authorities are developing activities to make sure aviation reflects its environmental effects in the consequences of increasing awareness of the environmental effects. Proposals are rising for a revenue enhancement on VAT and aviation fuel on air tickets. Economic Factors

Economic factors can also affect businesses and industries. One of the most considerable effects of economic factor is purchasing power of potential customers. Package Holiday Companies highly rely on purchasing power of its customers as well as the contemporary economic factors of UK that affect the Tourism industry’s offerings. However there are various elements which are affecting tourism industry of UK such as Great Britain economy is facilitating from gradual low inflation rate as compared to the other countries in additional Great Britain unemployment is low which provide a huge number of customers to Thomas Cook and TUI. Exchange Rates play a crucial role in international tourism and trade. Gallego et al. (2007) statistically discusses the impact of exchange rate regimes on tourism and concludes that more fixity in the exchange rate arrangements generates a positive impact on tourism. Considering the scenario of Euro is decreasing the gap with Pound Sterling may affect the outbound tourism from UK to other European Union Nations and this could definitely affect the tourism...
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