Current issues in tourism free essay sample

Introduction Throughout this coursework I will be exploring my chosen current issue which is the recession. I will be thoroughly exploring the impact that the recession has had on the travel and tourism industry in the UK. I will also examine and provide a justification of the wide-ranging processes of change in Travel and Tourism which have arisen due to the recession. The recession is an issue in travel and tourism because the state of the economy determines the success of the travel industry. The recession has had a negative but also a somewhat positive affect on the travel and tourism industry. The recession is a slowdown in economic activity measured over a significant period of time. The most common affects of the recession are; people are buying fewer luxuries, decrease in factory production, growing unemployment, decrease in personal and disposable income and an unhealthy stock market. These factors have affected the travel and tourism industry as holidays are seen as a luxury and as the average income of a person is decreasing they are not able to afford as many luxuries. PEST Political Since the recession, the government have implemented various changes and modifications to certain aspects such as benefits and income levels which have had an impact on the travel and tourism industry. As they have placed cuts on certain benefits, some people now have less disposable income to spend on holidays and thus specific commercial sectors in the travel and tourism industry have declined. The government is placing a cap on the amount of state benefits a household can receive. The government plan to decrease the amount of housing benefit a household receives. This could place further implications on individuals and families who want to travel but now no longer may be able to afford it. Political unrest in certain countries has had an impact on the travel and tourism industry in the UK. For example, in 2008 when there was blockade in Bangkok airport by protestors who did not agree with certain members in the  government, the UK issued a warning. The result of this on the UK travel and tourism sector was that flights to Thailand were diverted and holiday bookings were cancelled. This would have had a negative impact on businesses in the travel and tourism industry who were trying to recover from the effects of the recession. Economical The recession in the UK has brought about economical changes which have consequently affected the UK travel and tourism industry. Economic forces have seen a shift in income and divergence in terms of disposable income for travel. Oil prices are a significant economic factor. Airlines that are already under pressure from impacts of the recession having now also have been affected by the rising oil/fuel prices. Previously organisations had referred to the European debt crisis as the main risk to the travel industry but it now regards oil prices as a greater threat to the sectors profitability. Inflation is the rise in the prices of products and services we purchase. The recession has led to the inflation rates increasing although at certain points the rate had decreased. In 2008, as the global financial crisis was taking hold, prices were rising at an annual rate of about 5%. High oil prices were driving up transport costs and a fall in the value of sterling also forced up the cost of imported goods. At a certain point during the recession, there was less demand for fuel to power factories, transport goods to shops and to get staff to work. This meant that the inflation rate had decreased. However, since the VAT was increased from 17.5% to 20% there has been a steady increase in the inflation rates. Members of certain institutions such as David Miles recently argued that the economy has not seen any significant growth. He baled inflation as one of the reason for the slow economic growth. Socio Economic One significant social impact of the global recession has been increased unemployment within certain industries making up the UK travel and tourism sector. The social implications of unemployment can include family tensions,  loss of housing, loss of confidence and self-esteem, and perhaps most significantly an increase in crime. Evidence collected by the government and other institutions has shown that people are increasingly turning to alcohol due to the current economic climate. Travelling is a luxury and the majority of people paid for these holidays with their disposable income. This is the money an individual has after they have paid for all their personal expenses and is commonly spent on additional luxuries. Consumer Demand Changing consumer demands has an impact on both the nature of travel and on tourism destinations. For organisations within the travel and tourism sector to operate, the pricing policies must reflect the quality of the products and services on offer. The majority of businesses set prices which give them a competitive advantage over their competitors. The recession has caused a rise in the prices of products and services not only in the travel and tourism sector but in general too. The 2012 London Olympics provided a welcome boost to both the inbound and domestic sectors of the travel and tourism market. As more people were visiting the UK for the Olympics there was an increase in the demand for accommodation facilities. There may also have been high demand for transport providers so people can get to and from the Olympic stadium.