Tourism is largest industries in uk

Tourism is largest industries in uk1. IntroductionTourism is one of the largest industries in the UK. In accordance with VisitBritain (2009a) which is Britains study touristry agency, the economic contri b arlyion of tourism was worth 114.4 billion to the UK prudence in 2009 which is equivalent to 8.2 % of UK GDP. On the former(a) hand, VisitBritain (2009a) also comments that, The 31.9 gazillion afield visitors who came in 2008 spent 16.3 billion in the UK, the figures represent a 2.7% lineage in volume and 2.3% increase in value comp atomic number 18d with 2007. App atomic number 18ntly, there are somewhat opportunities and challenges for a impertinently completer in this industry. Therefore, if the bon ton do non has effective scenarios to manage the precariousness issues in future, the gild entrust in danger, even can non survive. By research auxiliary data, and some analysis methods viz. PSET and Impact/ incertitude Model, this essay tries to anticipate the effe ctive scenarios for AirFreedom Travel Agent which is first venture in British incoming tourism. more(prenominal)over, this essay go away beginning with PEST analysis in order to examining the external elements. Secondly, Impact/Uncertainty model pass on sign on for finding the closely important issues. Then, Scenarios pull up stakes design for AirFreedom Travel. Lastly, the essay is red ink to analyse the clashing of those scenario on the organisation. AirFreedom Travel Agent is a company first twisty in British inward tourism trade, which forget variable works related to to tourism, such as ticket fight and hotel reservation. OECD (2001) indicates that incoming tourism is the tourism of non-resident visitors within economy territory of the rural area of reference. The 31.9 million foreign visitors who came in 2008 spent 16.3 billion in the U.K. (VisitBritain, 2009a). Moreover, agree to a study undertaken by Deloitte (2008), the tourism sector created more than than 2.75 million jobs, and the number of direct industry employment was 1.32 million. Unfortunately, both(prenominal) number of inward visits and inbound visitor spending suffered from decline during the period from October, 2008 to September, 2009 by 9.2% and 0.7% individually (VisitBritain, 2009b). The importances of U.K inbound tourism is non scarce the contribution to economy but also benefits otherwise industry, namely retail industry and transportation.2. Environmental synopsis (PEST)PEST Analysis stands for Political, Economic, Social and Technological Analysis, and it is a framework of macro-surroundal factors for strategic factors. However, the company is involved in tourism and environmental issues are alert important for tourism. So this essay will examine those factors from five segments and accompaniment 9.1 shows the factors will assessed. 2.1 PoliticalPolitical environment of U.K. is quite stable. It has autocratic impact on potential customers.U.K.s transp ortation base of operations is both effective and effective capital of the United Kingdom Heathrow Airport for example is the seamport which the most world(prenominal) passengers land in 2007 (ACI, 2007) and political sympathies plan to expand this airport for more landing place capacity. The red double-decker bus is also a symbol of London. In addition, Border policy is some other factor, ledger entry fee is the direct essence of it. According to UKBA (2008), To foster even more tourist a natural shorter three-month group visa is being proposed at a possible cut back comprise of 44. Apparently, the new visa fee policy is a positive factor.Due to growe awareness of the green issues, U.K. Government is readying to declare some policies to protect environment. For instance, on one hand, the main avenue fuel duty rate in the U.K. was 0.5035 per litre in from 1 October, 2007 (OPSI, 2008). However, the latest increase to 0.5619 per litre from 1 September, 2009 (HMRC, 2009). As a result, tourists will pay more for the transportation system in U.K. On the other hand, vat on the airline ticket is also adds address to travelling, namely Member states of E.U have a minimum standard rate of VAT of 15% (EU, 2006).Adversely, act of terrorism is perpetually a significant negative factor influence on tourism. 52 people died in 7/7 London tube and bus bombings (BBC, 2008) and Shooting of Jean Charles de Menezes (Guardian, 2009) are deuce setbacks for British tourism which were happened in 7 July 2005 and 22 July 2005 respectively.2.2 Economic nearly countries of the world suffered from recession by Credit Crisis, except some nations namely China. Baily and Elliott (2009) comment that the GDP at annual rates for the first quartern of 2009 declined 14.4% for Germany, 15.2% for Japan, 7.4% for the U.K., 9.8% for the Euro area and 21.5% for Mexico. Recession resulted in slight people travelling beca wont of buying power is decreasing. Exchange rate of pound to foreign currency is non self-colored repennyly, so foreign traveller can spend less gold than before for travelling U.K. For example, one Euro was equal to 0.68675 British Pounds in 21 November, 2005 (ECB, 2009) and one Euro was equal to 0.89915 British Pounds in 20 November, 2009 (ECB, 2009). flash is arising in the direct of cost of goods and services in an economy in a period time. For example, the inflation rate of U.K. division over year was 1.5455% which compared to 1.0879% for the pervious month (RI, 2009). It means you command to pay more money for the same commodity than get month, and it leads to increasing cost for travelling U.K.Seasonality is a nonher issue need discussion because of holidays is the busiest time for tourism marketplace. It also is a trouble for this industry, after the peak season tourism companies do not have many deals. According to Visitbritain (2009c), the number of U.K. inbound tourists in 2008 was virtually 7.20million, 8.41million, 9 .36million and 6.93million by quarter. The percentage of spending of travellers who visit U.K. was 19% and 32% in January-March and July-September in 2008 respectively. 2.3 SocialAs a result of the increasing touch on on environmental issues on tourism linked to such as carbon footprint. People who focus on the green issues will discard to travel in order to reduce the CO2 emission.Spread of distemper is vitally important for a countrys inbound tourism. People do not want to travel to places which spread serious disease such as SARS. In accordance with NHS (2009), There were an estimated 53,000 new infections in the past week, take in from 64,000 the week before. It is a negative symbol for U.K. inbounds tourism industry. Safe nations are more attractive than insecurity. Travellers do not want to be involved in crime during their journey. Home office (2009) points out U.K. experienced a 45% down of all BCS crime from 1995 to 2008/09 which is favourable. On the other hand, broth erly event is another positive factor for tourism, such as FIFA worldly concern Cup. The examples in Britain are the activities of Royal Family and 2002 Commonwealth Games in Manchester. For example, Kuala Lumpur in Malaysia soldiers the 1998 commonwealth games, and about 60,000 tourists visited Kuala Lumpur in 1988 (FCO, 2009). 2.4 TechnologicalOn-line booking is a method booking ticket of plane or other theatrical role transportation which is the result from rapid development of engineering science. It saves time and money of both companies and consumers.Furthermore, hospitality network system is another example for tourism industry. It is efficacious to the travelling agencies provide package service including flight ticket and hotel booking.Moreover, the technology development is also affecting the manufacture. Aircraft become more efficient, for instance new aircraft are 70% more fuel efficient than 40 long time ago and 20% better than 10 years ago (IATA, 2009). It is not only saves the cost of aircraft operators but also reduces CO2 emissions. The efficient planer resulted in lower price of ticket and lower air pollution. It attracts more tourists which is including people who are concern on green issues.2.5 EnvironmentalIn the first place, the average total annual sunshine from 1971 to 2000 in U.K. was only 1354.9 hours (Met Office, n.d.). Secondly, the high latitude and close to a large ocean of the atomic number 74 caused U.K. experiences strong winds. After that, the average days of rainfall1mm were 154.4 days during 1971 to 2000 (Met Office, n.d.). Lastly, U.K. some times suffered from flood which is negative factor to tourism (Environment Agency, 2009).Graceful environment of the travel destinations is attractive. Environment of U.K. is pretty clean. According to EEA (2009), the measurement stations of air quality of U.K are slight. 3. Impact/Uncertainty ModelImpact/Uncertainty model is an effective tool for examining the factors which are i mpact on British tourism. The chart down the stairs is the Impact/Uncertainty model for U.K. inbounds tourism. Terrorism always has negative impact on the destinations, especially, tourism. People travel to other countries in holidays for fun, and they do not the trip make their life in danger. For instance, the al-Gamaa al-Islamiyas brush up happened in Eygpt resulted in 62 deaths, and 58 of which were overseas tourists (Essner, 2003). Essner (2003) is also cites that international tourists avoided came to Egypt owing to 13% decline in arrivals. On the other hand, it is unvoiced to predict.Meanwhile, exchange rate is direct related to the buying power of overseas tourists. Moreover, it is unpredictable because of the exchange rate fluctuates everyday. For example, recently, GBP is weak for exchange to Euro. It is a positive factor for attracting the tourists to U.K. from countries which use Euro. Another unpredictable factor is spread diseases, it influences not only the border policy which is resulted in more difficult to bring forth visa but also the security of the destination. Additionally, people do not want go to the place which is possible infected diseases.Overseas travellers come to U.K. by several(prenominal) transportation methods, namely, aircraft, train and ship. All those transportation methods use fuel as energy. Therefore, the price of fuel is directly related to the cost of trip. Purchasing power of overseas travellers is another factor impacts on the British inbound tourism. Many factors have negative impact on purchasing power, such as recession, inflation and financial crisis.Extreme weather is not usually happened in U.K and the advanced weather forecast system helps regimen predict it. It is also resulted in the seasonality of British inbound tourists number. However, it quiet down a negative factor to tourism, namely winds of up to 100mph have hit split of the UK which was caused damage of property (BBC, 2009).Social events hold by Britain is also attracts tourists to travelling U.K. In future, 2012 London exceeding Games is a brilliant opportunity to encourage U.K. inbounds tourism. Most of the social events are applied by government, so the level of uncertainty is low, but high impact on tourism. For instance, in the last quarter of 1999, international visitor arrivals Australia increased by 15 per cent compared to the same time in 1999 (ATC, 2001). Environment pollution is not in the high impact and high uncertainty quadrant. Although environment is essential of tourism, and tourists rear pressure on the area, namely overusing water resources in hotels and increasing ductile pollution. Consequently, new environmental legislations will regulate the market, but the impact and uncertainty level are low.4. Scenario PlanningThere are four scenarios below designed for AirFreedom based on the findings of Impact/Uncertainty model above. concomitant 9.2 shows the developing of the four scenarios. The four sce narios will describe below.Scenario A Crusades, it arises in the situation which U.K. suffers from terrorism and GBP is weak to other currency. It will leads to the pray of U.K. inbound tourism decrease in long-term and government will stamp down overseas tourist enter to certain places. On the other hand, the infrastructure and environment will damage by terrorism. However, the travelling cost will reduce, and it will attract customers who take advantage of price. Scenario B Pandoras Box happens when U.K. with terrorism and GBP is strong to other currency. It resulted in demand of U.K. inbound tourism move sharply in long-term and significant financial losses. Some problem namely rising unemployment rate and crime rate will increase. On the other hand, the government will declare entry regulation owing to terrorism. The situation of Scenario C Heavenly Love is similar to the present which U.K. inbound tourism is a sunset industry without terrorism and GBP is weak to other curren cy. Due to the circumstance, the travelling cost will decline and U.K. government will encourage inbound tourism for example, overseas tourists easy to obtain entry clearance.Scenario D Seraphim occurring when GBP is strong to other currency and without terrorism. As a result, the demand of U.K. inbound travel reduce in short-term due to the dear(p) tourism spending. Instead, overseas travellers will go to alternative destinations and possibly U.K. government will encourage this industry by entry policy.5. AnalysisAirFreedom as a new player in British inbound market, those scenarios are vitally important for the company, because of the trend of British tourism is directly related to not only the external competition but also the inwrought operation of AirFreedom. The table in appendix 9.4 shows the implications of each scenario on the company.Crusades the market helping will rapidly decrease in long-term and the company need to afford extra expense to take away security staff. O n the other hand, AirFreedom will focus on the tourists who take advantage of price under this circumstance by penetration pricing system. Moreover, the company should project about reduce the price of service by cooperation.Pandoras Box the U.K. inbound tourism market will suffer significant decline, and the company need to reduce cost by downsizing. Then, company need also hire security staff. Furthermore, the company should consider venture the U.K. outbound tourism service market.Heavenly Love U.K. inbound tourism will as a sunset industry resulted in potential growth in market share of AirFreedom. The company however should focus on the competitive market with market-oriented pricing strategy and hire more staff for expanding.Seraphim the market share will stagnate or slight decline and people with strong purchasing power will become the main potential customers. In addition, The company need to dismiss some staff for reduce cost and it should also consider enter the U.K. dom estic tourism service. The price strategy is also market-oriented pricing.6. Adopt StrategyIn according to Mckinsey (2001), 86% of the biggest billet winners abide byed market-shaping strategies between 1985 1995. However, AirFreedom as a new comer, the company is not aright enough to influence or determine the structure of U.K. inbound industry. Therefore, AirFreedom should to follow Adopt strategy which is the company follow the existing structure and accordingly developing with speed in order to capture opportunities in future. For instance, AirFreedom could base Olympic-Travel Package for expanding which contains the air ticket, two weeks hotel and tickets of several Olympic Games during the 2012 London Olympic Games. 7. ConclusionsIn conclusion this essay has argued that the future developments in British inbound tourism for AirFreedom which is first venture in the industry by several methods, namely PSET analysis and scenario. The question posed at the outset was to jud ge and discuss the future development trend of British tourism. It has been seen that the two most impactful and uncertainly issues for the industry are terrorism and spread of serious diseases. unrivaled can therefore conclude from the proceeding discussion that the scenarios influence not only the profitability of the company but also the operation strategies. More primary is required for this topic in further research. How much 2012 London Olympic Games will impact on the development in U.K. inbounds tourism under global recession is a key question still not solved. Given the current economic climate, AirFreedom should face both challenges and opportunities in this industry.