European Tour Operator

Macro Environment Analysis

Macro Environment Analysis

Introduction

A group of tour operators have formed the European Tour Operator association in 1989, who wanted representation in Europe. European tour operators have managed to achieve strong position in tourism industry (Case study). “After 20 years European Tour operators association still remains the only trade association offering European level representation for the interests of inbound and intra-European tour operators”, wholesalers and their European suppliers (www.etoa.org). The Company's business environment consists of competitors, industry (sector), the company itself and the macro environment.

Macro Environment Analysis

The macro environment is part of the environment in which business can rarely exercise any direct control, but it must respond. Macro environment looks the overall trend that are determining local and international environment. An analysis of the macro environment is important in measuring the factors that have a direct and influence or impact on the strategic direction of the organization. There are various tools available such as PESTLE, PORTER FIVE FORCES to analyze (Stonehouse et al, 2004).

Pestle Analysis

PESTLE is sometimes called PEST analysis or STEP analysis and the framework of this analysis comprises of political, economical, socio cultural, technological, Legal and environmental or ecological aspects (Xu, 2005). PESTLE analysis assesses the broader community trends affecting many business sectors and identifies the current and future developments that will shape the microenvironment of each sector. PESTLE framework helps to understand the external influences and the key drivers of change on Europe Tour Operators (Lancaster & Reynolds, 2002).

These factors are,

Political

The 11 September 2001, has changed the scenario of the world, these terrorist attacks resulted stringent security measures and made immigration laws stricter around the world mainly in USA (Hirsch, 2009). After these terrorist attacks, in many countries Government put some destination off limits due to which tourists and insurance companies refused to accommodate tourists travel on banned places for safety purposes.

Political instability of any country puts adverse effect on tourism industry, not only country itself but also on the neighboring countries. Security issues during the trip and travel of visitors have a serious influence on the tourism industry (Urquhart, 2006), which leads to

Increase business failures

Demise of certain destinations

Loss of expected growth in other destinations

Security and safety issue is main concern for tourism companies like Europe Tour Operators to protect the travelers around the world, who are moving by means of rail, airports, cruises, hotel and restaurants etc

Economical

The economic or financial crises can positive or negative impact on tourism industry (Xu, 2005). The global economic crisis that began in September 2008, and that moved towards in worst scenario in 2009 has led the businesses in liquidation and closing down, the slow downturn in activities, mass unemployment rate and major credit squeeze for customers (Case study).

An economic crisis is major threat to businesses; the impact of this threat can be judged through the report of metro news UK. As per the reported news, in 2008 financial crises led the closures of 800,000 businesses from small to large enterprises ...