Economic Policies to Boost UK Tourism & Travel Sector Growth
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Travel and tourism industry is considered as one of the major industry within the global market that is increasing at the pace and often results in contributing to the economy. However, there are different components within the travel and tourism sector which are tour operator, accommodation, hospitality organization, and airlines etc. that primarily constitute travel and tourism sector. Within the international ranking, UK is ranked at eighth position in the most effective tourist destination that is preferred by large number of domestic and foreign visitors (Tourism alliance, n.d). With the increasing services in the travel and tourism it also results in increasing and growing the number of visitors in visiting the tourist destination. It often results in enhancing the image of destination among the market so it can be visited by many other people. In the present scenario, tourism industry is blooming at the fast pace and so as UK industry is enhancing their different destination to attract large visitors and customers across the nation.
Presently, report focuses on history and structure of UK travel and tourism sector is London. However, the study will help in understanding the impact and influence of local and national government as well as different international agencies on travel and tourism sector. Furthermore, it will also examine the effect of supply and demand as well as their positive and negative impact of tourism on travel and tourism sector.
1.1 Key historical developments in the travel and tourism sector
In last few years, there have been significant development in the travel and tourism sector of London. Further people in the world consider London as one of the most renowned and beautiful travel destination (Harrison, 2006). This can be justified by the fact that every year more than 30 million tourist are attracted by the destination. People from different nations visit London and gets amazed by its monument and destinations. Back in olden days,where tourism was not a common phenomenon among people, the development of London begins. It was in the primitive era, when travel and tourism was not a part of an individual's lifestyle. Sooner the perception and mentality of people started to developed with the passage of time. Back in the year between 1660 to 1840, people from some countries started to travel in other nations (Petrova and Mason, 2004). In such situation their purpose of travelling was not leisure and fun but travelling was done to holy places only for religions purposes.
In this period, the concept of grand tours was developed and gained very high popularity in very short span of time. The people which belongs to high income group or which were treated as high class people became the first one to use and enjoy such kind of tours. It can be stated that the grand tour was the one which provided people with a clear reason for travelling (Reyes, 2010). Now a craze among people started to developed as they want to travel with a purpose of getting aware of other cultures and people living in different countries. The major contribution or development in travel and tourism sector of London took place at the time of industrial revolution. It was back in the year 18th and 19th Century which witnessed high growth in travel and tourism sectors. Further this was the time when brands such as Cox and Kings, Thomas Cook took birth. It can be also stated that 1969 was the time when rules, regulations and Acts related to travel and tourism were developed (Matz, 2008). The major development in travel and tourism of London was happened in the end of 19th century.
1.2 Structure of travel and tourism sector
In order to grow and develop the UK economy tourism sector plays a significant role in enhancing the growth the economy. London is being considered as one of the leading tourist destination in the world that are preferred by many visitors as it features attractive heritage and cultural sites that keep attract the visitors and customers to visits the place (Davidson, McPhail and Barry, 2011). The structure of travel and tourism sector in the London mainly focuses on different services element such as accommodation, tourist attractions, tour operators etc. that consists the structure of travel and tourism sector. According to London Tourism Industry, tourist those who are visiting London approximately spend around £15 million every year.
The foremost element that constitute travel and tourism sector in London include tourist attraction for whom visitors visits the place. The attraction can be natural sites or man-made sites that keep force the visitors to visits. For instance; Lake district and Blackpool Beach in the London are the famous natural sites that attract around 6 million travellers each year (Jayawardena and et.al., 2013). However, Tower of London, London Eye, Alton towers are the attractions that are created and constructed just to attract the customers and visitors. Buckingham palace one of the most popular site in the London that attracts 15 million visitors that contribute to the UK economy. In addition to this, another element that constitute structure of travel and tourism include transportation services. Transportation plays vital role in tourism industry as customers mainly focus on effective transportation system in the London so that passenger or travellers can easily visit the tourist destination (Zientara and Bohdanowicz, 2010).
Another component that constitute the structure of travel and tourism of London is accommodation services that is significant in the industry. London consists of different luxurious and budgeted hotels and resorts according to the requirement of their customers and travellers. The major accommodation providers like Travel Inn, Caravans contribute to the travel and tourism industry (Fyall and Morgan, 2009). Moreover, tour operator also plays a significant role in structuring the travel and tourism sector in London as there are 700 operators existing in the UK that provide variety of travel services and travel products for their domestic customers and international tourist so that they should successfully enable pleasant stay.
2.1 Function of government, government-sponsored bodies and international agencies on the travel and tourism
There are different government, government-sponsored bodies as well as different international agencies existing in the UK marketplace that directly and indirectly affect the travel and tourism sector. The government plays a vital role in enforcing the law and legislation that need to be focused by all the organization existing in the travel and tourism sector so that they should enable ethical and fair practices to their visitors and travellers (Sirakaya and Woodside, 2005). However, UK government will also focus on planning and enforcing laws that minimizes the negative effects of tourism. The functioning of governmental and international agencies that impact the travel and tourism sector are-
European Union- European Union is considered as national governmental agencies that represent an union of 28 members state of the Europe region. The politico-economic union plays vital role in growing the travel and tourism sector within their European region so that they should maintain the competitiveness among the European tourism sector that also result in increasing and growing the job opportunities within the EU member states (Middleton, Fyall, Morgan and Ranchhod, 2009).
Regional tourist boards- It is considered official government-sponsored organization within the UK economy that mainly function to encourage and attract the large number of visitors and tourists to their area and country that often result in contributing to their overall economy. However, regional tourist boards also posses wide information regarding the UK that will support the individual and visitors in providing advice on selecting the accommodation and also assist in deciding the interesting places that must be visited in that particular area (Moutinho, 2011).
World Tourism organization- It is an international agency that is mainly responsible for promoting the tourism that will ultimately drive and enhance the economic development and growth of the economy. The functioning of international organization in travel and tourism will result in promoting and fostering the sustainable development of tourism policies for the destination so that they should minimize their negative impact (Hjalager, 2010).
2.2 Local and national economic policy influence the success of the travel and tourism sector
There are different economic policies framed by UK government at the local and national level that result in influencing the success of travel and tourism sector of UK. For instance at the time of recession in 2008 the GDP rate of UK mainly decline by 9.8% that often outcome in reducing the number of travellers and visitors die to low income level of the customers and visitors (Lew, 2011). Therefore, UK government mainly enforce different policies such as change in the tax rate as well as change in currency exchange rate so that they must control the decrease in the number of visitors and tourist. The economic related with the currency exchange rate directly affects the international visitors and tourist as change in the currency rate will result in spending higher income for the travel services and products (Buckley, 2012).
One of the primary element that influences the success of travel and tourism include exchange rate of currency. Lower exchange rate of currency will ensure in increasing the number of tourist within the UK economy as international travellers and visitors will then spend their more income in the travel and tourism sector (Dickinson and Lumsdon, 2010). On other hand, with the implementation of trade policy in the UK region will result in removing the tariffs while trading the products and goods from one country to the another. Therefore, it can be said that local and national economy policy within the UK will positively affect the travel and tourism sector of UK (Blanke and Chiesa, 2013).
3.1 Factors affecting tourism demand
TUI group is one of the renowned multinational tour operators that designs and plan the travel product and services to different segment customers and traveller who are keen interested in visiting different destination (Fredman and Tyrväinen, 2010). Working as the manager in product development team at TUI group, there are different factors that need to be considered by the manager of TUI group so that they can easily plan for creating the travel package for their customers. The different factors which affect the tourism demand within the travel and tourism sector of UK include-
Demographic factors- One of the factors that affect the tourism demand include change in demographics of visitors and travellers. Demographic factor mainly include different characteristic of the customers such as age, sex, education level, income level etc. change in the demographic trends of the travellers also affect the tourist demand within the UK economy (London Tourism Industry, 2015). For example, while creating and designing the holiday packages to visit the London destination TUI group must focuses on measuring the demographic factors. As, London as tourist destination mainly features high heritage and cultural aspect the mainly attract the education customers to visits such places as it contain rich heritage and cultural resources.
Inflation- Another factor which affect the tourism demand include rate of inflation that result in increase in the rate of services and travel products. Therefore, under inflation the prices of the services are high which affect the demand of customers and travellers within travel and tourism sector (Euromonitor international, 2014). Therefore, TUI group must focus on assessing the inflation of UK economy while creating and designing the plan. For instance; with the increase in prices for services and tourism products, it will affect the demand of customers and tourist which will further affect their overall budget.
Influence of currency exchange rates- Another factor that affect the tourism demand in travel and tourism sector of UK economy includes fluctuation or change in the currency exchange rates. For example, UK economy is mainly known for their rich and heritage location which is mainly preferred by the international visitors and tourist (Contemporary issues in hospitality and tourism, 2013). Thus, fluctuations in the currency exchange rates will result in increasing the prices of travel services and other transportation costs thus; it will directly affect the tourism demand. Therefore, fluctuations and change in the currency exchange rate directly affects the international visitors and tourist.
Technological factor- Technology in the contemporary environment is adding value in initiating growth and development of travel and tourism industry. However, this factor sometime also positively and negatively affects demand of tourism within the UK economy (Travel, 2015). In the contemporary scenario, travellers are keen interested in using technological aspect in each and every transaction that is they might prefer to book the travel services through online platform. Sometime this may lead to attain negative result in disclosing the personal information regarding the customers that may lead to fraud. Therefore, authentic and secured sites on internet will positively affect the tourism demand.
3.2 How supply changed to meet the effects of demand
Travel and tourism sector basically focuses on different forms of services that result in attracting and influencing the customers and visitors to visits UK (The History of British Tourism, 2014). Therefore, TUI group must focus on different provisions that meet the effects of demand in UK-
Accommodation: One of the effective provisions that need to be considered by TUI group provides leisure and luxurious accommodation facilities to domestic and international travellers. Accommodation is the key services that are provided by TUI group so that they can easily meet and satisfy the requirement of customers and visitors. Now days there are different hospitality organization that provides different accommodation services according to the budget and requirement of different customers (Travel and Tourism, 2014). In the contemporary scenario, customers often prefer to select the tour operator which provides low rate accommodation services and package to them that meet their needs and requirement.
Services: Change or modification in the services also results in meeting the demand in UK. For instance; UK economy consists of rich heritage and cultural resources as well as attractive places therefore, focusing on the cultural and heritage tourism within the economy will meet the changing demand of customers (Trends, 2014).
Tour operator: However, the supply of tour operator services has also changed the effects of customers and visitors demand in the market. There are numerous of tour operators existing within the destination that deliver similar travel services and products to their visitors and customers. Thus, visitors and travellers who visits the UK will have different options from whom they can acquire the travel services.
4.1 The main positive and negative economic, environmental and social impact of tourism
There are different positive and negative impact of different external factors that has impacted the tourism sector of the UK (Tourism Industry Structure, 2014). The different factors that directly impact the tourism are enumerated as follows-
Economic factor mainly include inflation, seasonality, income level etc. that directly and indirectly impact the tourism for tourist destination that is London. The economic factor mainly result in attaining direct and indirect employment in the travel and tourism sector that positively impact the tourist of London as with the increasing employment they must provide quality and leisure service to the visitors and tourists who visits the places in London (Tourism Alliances, n.d). In addition to this, increase in the government revenue will also positively impact the tourist as with the generating revenue UK government will recreate and renovate the historical and cultural attractions like British Museum, Buckingham palace etc. as now a days travellers visits the places that contain rich cultural and heritage resources. On the contrary, Economic factor within the UK sometime also result in attaining negative impact on the tourist. Economic factor may include inflation and seasonality that affect the most of the tourism. For instance, with the inflation within UK economy it results in increasing the prices of services that are offered by various tour operator that result in affecting the number of visitors to the London (Harrison, 2006). As, with the high prices customers or visitors will purchase and spend less income on the travel products. Another economic factor that negatively impact the London tourism include seasonality for instance Hyde Park Winter Wonderland fun with ice skating is the attractive event that takes places only in December thus, it may also affect the demand of tourist as they are only available in season basis.
Social factor also impact and affect the tourism of the tourist destination that is London as this factor mainly include income of the visitors, change in preferences of travellers etc. that positively and negatively impact the London tourism (Petrova and Mason, 2004). With assessing the social factor that is changing preferences of the travellers for instance; in the contemporary scenario, customers and travellers often visits the cultural and heritage sites that will result in preserving the cultural heritage sites of London so that large customers get attracted towards it. However, another positive outcome of the social factor also include cross cultural exchange as different visitors form the foreign countries visits their places and acquire their knowledge that often enhances their knowledge (Reyes, 2010).
Environmental factor generally focus on good and effective climate that mainly attract the customers and visitors from the summer area and region. However, considering the environmental factor mainly result in enabling positive and negative impact on the tourism. With the considering the environmental factor it positively result in preserving and enhancing the natural areas and sites so that large number of visitors must visits the London as tourist destination (Davidson, McPhail and Barry, 2011). However, the negative impact of environmental factor result in increasing pollution that directly affect the environment.
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4.2 Strategies that can be used to minimize the negative impacts while maximizing the positive impacts
There are different strategies that is being used to minimize the negative impact of economic, environmental and social on the tourism while it will also maximize the positive impacts of these factors on the London tourism. The different strategies are-
Eco-tourism: For minimizing the negative impact of the environmental factor London Tourism must focus on Eco-tourism within the London so that they may attract large number of customers and visitors to visit their place (Jayawardena and et.al., 2013). While focusing on the eco-tourism they can easily conserve the natural resources and environment. However, with enabling eco-tourism it result in raising the awareness regarding the environment and social climate within the destination. However, it will also result in building environmental awareness within destination as result in minimizing their negative impact as is waste disposal, water overuse etc.
Preserving the cultural and heritage sites: Another strategy that is being used to maximize the positive impact of social factor include preserving or conserving the different cultural and heritage sites of London so that in the future it may be visible to the tourist and visitors across the world (Zientara and Bohdanowicz, 2010). With the changing preferences of customers and visitors they generally interested in visiting the sites and attraction that support them in gaining historical knowledge. Thus, UK government must enable the renovation or recreation of such places like British Museum, Science Museum, Buckingham palace etc. that depict rich cultural and heritage resources.
Responsible tourism: Another strategy for minimizing or overcoming the negative impact of economic, environmental and social impacts focuses on responsible tourism (Fyall and Morgan, 2009). With the help of enabling responsible tourism for London destination it result in generating economic benefits as well as it also improve the well-being of the society. Under this strategy London tourism will focus on minimizing the negative impact so that it may result in providing effective experience for tourists through enabling greater knowledge of all the environmental and social issues. However, responsible tourism strategy mainly result in seeking to minimize the negative impact with maximizing the positive impact. It may also result in compiling all the relevant laws and legislation so that they take the advantage to succeed in the market (Sirakaya and Woodside, 2005).
From the above report it can be summarizes that travel and tourism sector is consider as effective and leading industry in the world that mainly focuses on rendering different services that keep attract their visitors and travellers to visits such places and destination. It can be also said that travel and tourism also drive the economy and result in creating job opportunities within the economy that generate high income for the economy. Furthermore, the report has also concluded that travel and tourism sector mainly exists even during the post industrial revolution times. While, the report also summarizes that in the past scenario, the main purpose of travelling was to trade and accommodate. Moreover, the report has also suggested that there are different economical, political and social factor that directly impact the travel and tourism sector. In addition to this, report has also assess different governmental agencies that is regional tourism board as well as international agencies that function for the welfare of the travel and tourism sector. Study has also determine that there are different economic policies framed by UK government at the local and national level that result in influencing the success of travel and tourism sector of UK. These economic policies support in developing and growing the UK economy so that in future they may provide wide travel services and products to their customers and visitors.
Buckley, R., 2012. Sustainable tourism: Research and reality.Annals of Tourism Research. 39(2). pp.528-546.
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Felfernig, A. and et. al., 2007. A short survey of recommendation technologies in travel and tourism. OEGAI Journal. 25(7). pp. 17-22.
Fyall, A. and Morgan, M., 2009. Marketing in Travel and Tourism. 4th ed. Routledge.
Gössling, S., 2013. National emissions from tourism: An overlooked policy challenge?. Energy Policy. 59. pp 433-442.
Harrison, D., 2006. Dictionary of Leisure, Travel and Tourism (3rd edition). Reference Reviews, 20(3). pp.52 – 52.
Hjalager, A. M., 2010. A review of innovation research in tourism.Tourism management. 31(1). pp.1-12.
Lew, A. A., 2011. Tourism's role in the global economy.Tourism Geographies. 13(1). pp.148-151.
Matz, S., 2008. Tourism marketing: Concept for event-tourism in Edinburgh. GRIN Verlag.
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