TRAVEL AND TOURISM

Contemporary Issue Faced By the Travel and Tourism Industry and the Strategies to Overcome These Issues

Table of Contents

Introduction2

Issues faced by Travel and Tourism Business2

Value Added Tax2

The Recent Economic Crisis4

Impact of Tourism Issues on the Current Tourism Trends4

Cheap holiday arrangements5

Demands for High Quality Experience5

Short Distance Trips Vs Long Distance Trips5

Decline in the Hotel Industry6

Selection of Tourists Spots7

Changes in the Berkley Hotel7

Decline in Customers8

Offers introduced by the Berkley Hotel8

Strategies to overcome the Tourism Issues9

Price9

Value Added services9

Marketing10

Consequences of Business failings10

Conclusion11

References13

Contemporary Issue Faced By the Travel and Tourism Industry and the Strategies to Overcome These Issues

Introduction

Tourism industry is one of the most attractive industries for the customer. However, despite its attractiveness, its survival is at risk. The number of tourists is declining, and holidays and vacations are not the first priority of customers. Tourism and travelling companies have faced enormous losses recently. Therefore, they must identify their strength, overcome their weakness, foresee the new trends of the industry and prepare a backup plan for their treats. In this assignment, I am going to discuss two issues faced by the tourism industry and the impact of these issues on the current trends of tourism industries. I will also discuss the impact of these issues on “The Barkley Hotel”. Moreover, I will discuss the strategies that can be used to overcome these issues and challenges, and the consequences of not following these strategies.

Issues faced by Travel and Tourism Business

Value Added Tax

The value added tax in UK rose to 20 %, which is the highest in the history. The New Coalition government increased the taxes because the budget deficit of UK rose sharply. Therefore, the government had to increase value added tax, due to which, the tax revenue increase by £13 billion.

This change has affected the tourism industry indirectly. Although, Value Added Tax is not applicable to flight costs, but they have a huge impact on the accommodation expenses, can rents, shopping and leisure expenses. Not only this, the insurance premium has also increased by 20% due to which; people find it hard to manage their budget. The impact of value added tax has negatively affected the revenues generated through tourism. The cost of travelling has increased in UK while other countries of European Union are striving earnestly to attract tourists by lowering their tax rates. For instance, the French government has reduced the tax rates to 5.6 percent.

According to Trip Advisor Survey, domestic tourism in Britain is going to be negatively affected in 2011, because domestic travelling holidays have become unaffordable for the local population. The increased VAT, fuel prices, unemployment rate and inflation will not only drop the tourism revenues, but the hotel business will also be affected (Euro monitor International, 2011, p.1). However the cost of international travelling will not rise because this tax is not applied in other European Countries.

Cost of Air Travel

The cost of Air travel has significantly increased since 2007. Air passenger Duty for a short distance flight has increased by £ 7, while, on the other hand, the ...