The Interaction Between Business and the Environment in the Tourism Industry

Topics: Tourism, World Tourism Organization, Airline Pages: 8 (2584 words) Published: April 1, 2009
The Interaction between Business and the Environment

Date of report: 27/04/07

RE: Tourism Industry

1. Introduction

This report will contain a SWOT analysis of the tourism industry as a whole, but will focus mainly on activities concerning United Kingdom countries and companies, as the tourism industry covers a huge, global area. There will be points raised that affect countries globally as well as the UK that will be made aware of during the contents of this report.

The tourism industry covers many different organisations that can work together and against each other in gaining a piece of the billion pound tourism pie. Airlines, travel agents, hotels, and many more businesses have a lot to offer the tourism industry, for a number of reasons which will be discussed.

2. Strengths

It seems in recent years the tourism industry has grown rapidly bringing a lot of strengths to the sector. First of all in 2004 the world tourism revenue rose 10% to a record 622 billion dollars according to the world tourism organisation. The United States had the most revenue from tourism as their receipts rose 16% to $75 billion, followed by Spain with $45.2 billion and then in third France with $40.8 billion. Tourist arrivals rose globally by 11% to US760 million, the fastest rate of growth for some twenty years. (Bloomberg News, 2005)

As far as the UK is concerned it is the world’s sixth biggest travel and tourism economy, and it accounts for 9.4% of the country’s Gross Domestic Product (GDP), as well as 2.6 million jobs. The global travel and tourism market is expected to grow 4.2% each year over the next decade and UK travel and

tourism is expected to grow an equally impressive 3.1% a year over the same period (Chris Druce, Caterer and Hotelkeeper, 2006). This is without a doubt a
strength to build on for the UK and global travel and tourism industry.

2.1In addition it seems to be a lot cheaper to go on holiday abroad these days and a perfect example of this is the fact that this 2007 Easter holiday, there will be a record number of British people going overseas. 2.5 million will have travelled abroad over the bank holiday weekend, according to the Association of British Travel Agents (Rupert Neate, The Guardian, 2007). This will be a great help to the tourist industry in the UK, even if people are moving overseas on holiday, as the government will be receiving corporate tax on the companies who take these people abroad and the more money they make the more the British government get in return.

Yet another strength for the tourism industry is the fact that airline ticket prices are falling, but not just across Europe as we tend to expect, some companies are trying to do budget long haul flights that normally would not be plausible. Ryanair, the low cost airline earlier this year said that it was unveiling plans to set up a new airline that would offer £7 tickets to the US. This is concerning for BA and American Airlines who offer a more business class airline but for a lot higher prices. Virgin have responded by claiming they too are launching a no frills service across the Atlantic. The reason for the outbreak of a fares war on the Atlantic routes is said to be because of two reasons. First the fact that new planes are being developed that are at least 30% more fuel efficient than even the most advanced planes currently flying across the Atlantic. This means that routes that were before to costly and uneconomical to be affordable for customers, now seems a possibility. Secondly the new “open skies” deal allows US airlines access to Heathrow, Europe’s most important hub airport. (Tom Mcghie, Financial Mail, 2007).

At the moment the most beneficial are the customers who are receiving holidays at cheap prices but also there is the fact that as tourism increases throughout the world the amount of jobs that it will provide for people within these nations can only be...
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