The paper "Business Strategies of TUI Hotels and Resorts" is a good example of a business case study. TUI AG established in 1997 is a leading organization in the European tourism industry and provides leisure travel experience to millions of its customers. TUI Hotels and Resorts, TUI travel, and the cruise ship business are the major sectors in TUI business. After the sale of Hapag Lloyd AG in 2009, TUI specialized in pure tourism. Macro-environmental analysis of the tourism industry Macro-environment, industry, competitors and the company makes up the business environment. This essay utilizes PESTEL to analyze external environmental forces in TUI business industry.
PESTEL is an acronym which refers to political, economic, socio-cultural, technological, environmental and legal forces operating in a competitive environment. This analysis will help in understanding major drivers of change and external variables influencing an organization. Political Due to terrorist threats across the world, major nations have implemented tight security measure and subsequently formulated strict immigration policies. International nations have consequently banned some destinations after a terror attack and this has a direct effect on travel insurers who may refuse to cover tourist who went to those places.
A prolonged act of terrorism changes the perception of tourism such that the number of visitors to a place reduces substantially. Government tumble and political instability have adverse effects on the tourism industry. Korean peninsulas are a clear example of the impact of political instability on tourism and general development in the region. In an effort to promote non-nuclear proliferation measures, economic sanctions were placed on Korea. This is a disincentive to tourism and the overall prospect of the tour industry in the Korean peninsulas and other surrounding nations given globalization features.
Another political element affecting tourism is the taxation policy where some countries provide tax incentives and subsidies with the intention of promoting tourism in the country. Economical Rate of exchange is a critical factor, especially in international trade and tourism. Research conducted by Gallego et al (2007) reveals that more fixed exchange rates have a positive impact on the tourism industry. A vivid illustration is Euro which is decreasing the gap against sterling pound affects the flow of tourism from the United Kingdom to European Nations and ultimately tourism agents. Globalization is the recent trend in business which guarantees unlimited opportunities especially in tourism ventures such as travel agencies, technologies, consulting, hotels and other sectors in the tourism industry (Munoz, 2005).
Globalization means that companies around the world have minimum barriers to enter or exit a new market. This increases competition and subsequently sustains dissemination of quality services. According to renowned writer Porter (1998), competition increases as barriers to entry decreases. On a higher note, aviation charges on oil prices is an economic component influencing tourism not only in Europe but also in other continents.
In 2008 growth in travel and tourism economy slowed by 1%, reduced by 3 % in 2009 but is expected to expand by only 0.3% in 2010. Tourism assembly, WTTC, made a prediction that with globalization, opportunities will arise for tourism to grow exponentially. The current global financial crisis also has both negative and positive effects on the tourism industry. XL leisure group was closed down due to adverse effects of the financial crisis. On the other hand, the collapse creates an opening to more market space for survivors.
Furthermore, some major financial institutions that contribute to success in the industry were adversely affected by the slump. Post-recession boom is being anticipated and could boost tourism sector taking into consideration that the sector is the main income earner.