Travel & Tourism
Contemporary Issues in Travel and tourism in UK
The aim of present task is to select particular tourist destination and analyse level of tourism at the selected tourist destination. Further present task would explore the statistics pertaining to number of tourist visiting Helsinki every year, main tourism market to be visited in Helsinki. Further present task would find out the impact of tourism sector on environment, local economy and social life. In order to accomplish the present task statistics, strategies for local & national tourism along with sources such as newspaper and journals would be referred.
For the present task Helsinki has been chosen as the tourist destination which is one of the famous tourist spot in Finland. Helsinki is the capital city of Finland with population of half million and located in Baltic city. Acting as the gateway between Asia and Europe, Helsinki attracts a large pool of national & international tourism for business & leisure. From the economic point of view Helsinki adds maximum through tourism to Finland economy in comparison to any other city in the country. Further jobs in tourism sector in Helsinki allow employment for a large chunk along with providing considerable revenue (Holder & Floyd, 2009).
Level of tourism
Tourism is the main business activity for Helsinki and it has been observed through past data that out of the total visitors coming to Helsinki more than 65% of the visitors are from China. Helsinki has the mixed image among the visitor where in several places portray the image for exciting, historical, charming, friendly and spiritual destination. Tourism in Helsinki has both the pull as well as push factor through which tourism is being encouraged in Helsinki. Some of the key elements which are part of the push factor for Helsinki includes knowledge, escape, prestige, relaxation, adventure, sport and togetherness with family & friends (Witt and Witt, 1992). Pull factors which encourage the tourist to come to Helsinki include historical destinations, natural environment, weather, sport & outdoor activities etc.
Level of tourism in Helsinki can be estimated by the number of monthly bed nights in the city which shows the tourism spending time in the city. A pictorial view of the level of tourism in Helsinki can be given as below:
Figure 1: Showing the monthly bed nights spent by tourism in Helsinki (GLA Economics, 2011)
As shown in the figure above that level of tourism was highest in year 2011 while in recent years level of tourism is decreasing sharply. As shown by the black lines in the graph that tourism in Helsinki has dropped significantly. Comparing through monthly bed nights spent by the tourism in Helsinki in last one year there is decrease of 5 to 7% in the number of tourist visiting Helsinki (GLA Economics, 2011).
Another factor which shows level of tourism is job created with the help of tourism industry in Helsinki. Figure below depicts the last six year data for job created during each of year from the tourism industry. Due to economic downturn local economies are not doing well and this is impacting travel & tourism industry. Poor economic symbols in local economy and unsupportive behaviour of tourism have enhanced scope for branded travel & tourism organizations to enter into the tourism markets. Social life environment has been impacted and there is deterioration in social life environment due to increasing travel and tourism activities which has started a debate between conservation versus expansion in tourism industry.
Figure 2: Showing number of jobs in Helsinki generated from tourism(Crouch, 1995)
P1.1 Analyse Issues currently driving change in the travel & tourism sector
Some of the key factors which have been observed as the major driving forces in travel and tourism industry not only in Helsinki but the travel & tourism industry in entire world can be given as below:
- Environmental impact: Environment is the major concern area which is impacting tourism industry in current age. Environmental decay around the world has been concern area and destinations which used to be full of environment reserve at present are losing their charm. Due to this nature lovers are not showing interest in these destinations. Tourist activities are impacting the attractions of Helsinki due to which there is expected downfall in number of tourism coming for the visit of tourist place.
- Less focus on cultural heritage: At present young generation has higher focus towards destination for the leisure instead of visiting the destination for cultural heritage or natural reserve. Due to this modern tourism is more influenced by leisure destination developed recently instead of existing cultural or natural destinations. Due to this younger generation would have lower attraction towards Helsinki.
- Economic slowdown: Economy around the world is showing shaky symbols especially in European countries, China and US. A large chunk of tourist in Helsinki is from China and economic impact in China is affecting level of tourism in Helsinki. Similarly tourist on major destination belongs to Europe and US. Economic slowdown would result into lower spending power for the consumers hence affecting overall revenue generated from the tourism industry (Crouch, 1995). Downturn in economy has lowered down the spending power of consumers due to which consumers would be keen to spend much on Helsinki tourism visit.
- Cross country relations: In present scenario where in due to political issues and increasing resource constraint several time cross country relations become hindrance to the tourism industry. Due to bad relations VISA process and other transportation related problems arises while travelling from one country to other which makes it difficult for the tourist to travel to some of the destinations. Hence Finland would be able to develop good relations with source countries of tourism.
Impact of tourism on environment, local economy and social life
Tourism industry is a positive factor considering environment, local economy and social life for the tourist as well as people residing in tourist locations. In order to enhance tourist footfall at the several destinations government and other stakeholders try to reserve environment so that natural beauty of the destinations can be maintained and more & more tourist should visit the place. Tourism industry provides job opportunity for the people residing in nearby location to the tourist place. This would give job opportunity along with additional revenue through the small businesses managed by people living in these places (Christel, 2007). Social life is another factor which is observed to have diminishing trend in present and with growing tourism industry more and more people opt to visit along with their friends & family adding a lot to the social life.
P 1.2 Analyse different current issues using appropriate methods and resources
Some of the current issues in travel and tourism sector includes changing demographic profile for the consumers, dynamic consumer needs and need of higher level of customization in service segment. Current issues in the travel & tourism sector have been identified through literature study which has identified above mentioned three factors. Changing demographic profile of the consumers is an issue of concern for the travel and tourism sector as more and more people are living into nested families. Hence travel & tourism sector need to design package according to the need of small families only.
Another factor of concern for the travel & tourism sector is dynamic needs of consumer which should be taken care by the industry and these needs are changing at rapid pace. Organizations which are changing according to consumer need would remain in industry while organizations which would not be able to respond to changes would be out-competed by consumers. Customization in service segment is another factor which has emerged as current issue as consumers are demanding higher level of customization in services and standard set of services are not working for the consumers in present age.
From the present task which analyse the tourism industry for Helsinki, it has been concluded that Helsinki is one of the famous destination and important in terms of economic value for the country. Further there is high number of tourist visiting the place every year and most of them are from China. Factors driving tourism industry in present age includes environment, economic slowdown and cross country relations. Tourism also has positive impact on the local economy, social life and environmental factors.
Task-2 Personal report
For the present task, Costa Rica has been selected as the tourist destination where in focus would be to analyse the eco-tourism phenomenon in the country. Eco-tourism can be defined as the process of visiting the pristine and fragile part of the tourist destination and these tourist destinations are considered to be undisturbed having close connection with nature. Eco-tourism in present age has remained of low significance for the commercial value generation but for the tourist having interest in eco-tourism it is one of the most popular form of destination (Buccellato et al, 2010).
Costa Rica is known in entire world for development of eco-tourism in the country and development of national parks, beaches and wild reserve make Costa Rica a must visit place for the eco-tourism lovers. Some of the famous national park made in Costa Rica includes Arenal volcano national park, Barbilla national park, Barra Honda national park and Braulio national park. These national parks are considered to be the biggest source and attraction for the tourist coming from national and international destinations. Among the famous beaches present in Costa Rica include Manuel Antonio beach, Cahuita Beach, Puerto Viejo da Talamanca beach, Manzanillo beach, Gandoca beach, Tamarindo beach and Flamingo beach etc. Costa Rica is also known for the wild reserve present in the city and some of the major wild reserves in the city are Cocos Island, La Silva biological station, Monteverde cloud national reserve.
Development of tourism in Costa Rica can be estimated from the growth in number of tourist visiting Costa Rica every year and it has been revealed that tourism in Costa Rica has grown by 28% in year 2011 where in 31637 tourist have visited the place as compared to the 24677 number of tourist visited Costa Rica in first month of last year. Hence there is rapid growth in the number of tourist visiting Costa Rica every year for eco-tourism. In order to examine the main attraction place for the tourist coming from national and international destinations it has been found out that more than 50% of the visitors visit Costa Rica for the natural reserves while 40% of the visitors come to Costa Rica in order to perceive entire Costa Rica as a destination place to visit (Holder & Floyd, 2009).
Costa Rica also adds heavily to the economy of country through tourism where in year 2011 total revenue generated from eco-tourism in Costa Rica was approx. $660 million. Analysing the tourist profile it has been found out that major chunk of the tourist in Costa Rica come from US while China, EU and Asian tourist are among the other to visit Costa Rica for its unique eco-tourism. Eco-tourism is also an important source of job generation for Costa Rica where in it impacts to the local economy, social life and environment positively (Wilkerson, 2003).
Government in Costa Rica provide great support in order to develop eco-tourism and it is important for the various stakeholders that significant revenue can be generated through eco-tourism along with opportunities for the local people living in Costa Rica. Enhancing consumer information for Costa Rica through online resources would be a useful exercise as this would not only be a source of information but it would also attract customers to make online booking.
Role within group
For the present task a group of five members was made and tourist destination analysis along with making presentation on the analysis of ecotourism in Costa Rica. Every task requires successful leadership in order to align the individual efforts made for attaining the group objective. I was given the leadership role in the group along with exploring information on eco-tourism in Costa Rica (Karanasios& Burgess, 2008). As a group leader my primary aim was to understand the task completely so that it can be executed in totality, further after analysing the task I started assigning roles & responsibility for each stakeholder of the group. According to the capability & skill level of the individual members of the group role to each member was assigned. I have taken the role to explore information pertaining to ecotourism in Costa Rica, this role was taken by me as these forms the significant part of the overall task and lack of information would have mad entire task in vain. Further I also coordinated with all the members of the group regarding work done by them and role assigned to each of the members of the group.
Present task has helped me to gain lot of information on the travel & tourism industry in Costa Rica and working in the group. The first learning was about the travel & tourism industry in Costa Rica and analysing the tourism industry in Costa Rica. From present task I have developed understanding on the various tourist places to be visited in Costa Rica and major locations due to which Costa Rica is famous among the tourist in entire world. Statistics on tourism sector in Costa Rica and factors impacting tourism in Costa Rica were analysed to understand overall tourism industry scenario in Costa Rica. This allows me to act as analyst and deploy gained knowledge in the coursework so that analysis on travel & tourism industry can be carried out successfully (Cooper, 2005).
Conducting a SWOT and PEST analysis in Helsinki
Strength: Tourism industry in Helsinki is considered to be among the most famous destination for the domestic as well as international tourist. Considering Chinese tourist Helsinki is the favourite place for the visitor which makes it possible that 65% of the tourists in Helsinki are from China only. Some of the key facts adding to the strength of tourism industry in Helsinki can be given as below:
- Helsinki has the uniqueness and appealing destination
- Weakness of Euro value make it possible for the foreign visitor to get higher value for money spent by them
- Recovery in the global economy making it possible for the country to have more tourist
- Helsinki has made significant investment in the online marketing and booking system which adds to the awareness about the tourist destination
- Competitive aviation and hotel industry in Finland assure for the high level of tourism in the country (Quinion, 2005)
Weakness: These are the factor which needs to be carefully dealt by Helsinki so that there is no negative impact on growth of tourism in the country.
- Many European countries which forms a major part of the tourist in Helsinki are at present in deep recession which lowers down the average trip expenditure
- Finland has growth trend which is lower than trend and expected to continue in future as well, this would give tourism industry a negative sign in the country (Witt and Witt, 1992)
- Domestic growth for the hotel and transportation industry is weak giving sign of stagnancy hence expected growth in tourism for Helsinki is quite low (Buccellato et al, 2010)
Opportunity: Opportunities which are confronted at present in the tourism sector in Helsinki can be given as below:
- China being a high population country and being favourite destination for the Chinese visitor gives Helsinki a big scope for enhancing revenue through tourism
- Lowering outbound demand for the tourism will result into the lower load factors as a part of the short term strategy
- Lowering down the value of Euro would make it possible for the visitors to come and visit Helsinki as it would appear as an affordable destination
Threats: Threats for the tourism industry in Helsinki can be given as mentioned below:
- Results of US debt ceiling not only forcing US into recession but many of the European countries are also under pressure for recession which would make an adverse impact on the tourism sector
- New law in China for outbound and inbound tourism would adversely impact the relations of two countries giving negative impact on growth of tourism in Finland
- Bilateral aviation capacity cap would limit the ease of transportation (Jonathan, 2009)
- Increasing competition for the foreign funds and emergence of tourism as the major sector for gaining foreign fund would make it difficult for Finland to develop its tourism sector
Analysing external would allow assessing the overall effectiveness for the particular industry and in present context impact of political, environmental, social, economic, technical and legal factors would be analysed on tourism industry in Helsinki. Carrying out PESTEL analysis would make it easy to understand external factors which would affect the industry and resulting effect which would be made on the industry through variation in these factors.
- Political & legal: Political stability and convenient legal policies prevailing in Finland makes it possible for the tourist coming from China to stay and travel in Finland easily. Further good political link between China and Finland pays the role for developing tourism industry. There are several changes taking place in tourism industry through political & legal factors such as the revised inbound and outbound tourism policies developed by several countries. Tourism industry need to respond proactively towards the changes happening in tourism industry and government should be involved so as to develop simple legal policies for the tourism sector.
- Environmental: Changes in environment such as development of eco-friendly tourism and putting more focus towards development of ecotourism would allow restoration of environmental elements. These factors are giving positive influence to the tourism sector in Helsinki and tourism sector should respond positively by adopting eco-tourism techniques and enhancing revenue through nature friendly tourism (Lew, 2008).
- Social: Presence of high number of nested families and changing social trends would force the tourism industry to design the travel packages as per the consumer needs. Further consumer in present age would like to socialize and tourism is an important factor for the social activity. Hence tourism industry should portray itself as a mean to socialize with family & friends.
- Economical: Changes in economy are impacting tourism heavily as economic slowdown in many countries, weakening currency and situation of recession has shown declining trend in tourism sector. Changes in economic trends are difficult for the tourism sector to digest and respond to. In order to respond towards economic factors tourism sector in Helsinki should portray it as an affordable and cheap destination so that consumer should look Helsinki as the low cost destination (Korstanje, 2007).
- Technological: Changes in technology in present age has proved beneficial for the tourism industry and especially for the tourism industry in Helsinki where in stakeholders in tourism sector have spent huge money in order to generate revenue through online tourism sources. Further developing online marketing and booking system would allow the stakeholders to gain more revenue and providing information regarding various destinations in Helsinki through web sources would make it possible for the stakeholders to know about tourist destination in Helsinki from their respective locations only.
P 3.1 How travel and tourism businesses could respond to change
There are vital changes occurring on the travel and tourism business domain such as the changing demographics of the consumers, weakening economic clues leading to the lower spending pattern and concern towards conservation in the tourism industry in Helsinki. Further looking into the changing consumer profile it is recommended that Helsinki needs to understand the tourist requirements so that in accordance with the tourist preference (Christel, 2007). Further in order to deal with the issue of conservation policies and processes should be documented which can develop culture of conservation. In order to deal with the lowering economic clues it is important that local economies in Helsinki should be encouraged to develop the local businesses.
P 3.2 Develop strategies on how selected travel and tourism businesses could respond to change
Selected travel and tourism businesses in Helsinki can effectively deal with the issues faced in the present context by adopting strategy of co-operation. Co-operation strategy can also be known as win-win strategy wherein various business stakeholders needs to be involved in business so as to make synergy and enhance facilities for the tourist coming to visit these tourist places. By development of the co-operation among the various stakeholders such as travel agents, transportation dealers and hotel owners it would be helpful to develop strategic alliance wherein all stakeholders would be benefited by providing combined service package to consumer (Crouch, 1995).
P 3.3 Justify strategies for how selected travel and tourism businesses could respond to change
Co-operation or win-win strategy chosen in the present context can be justified from the fact that higher level of competition between various brands for facilities of tourist and local players would create an environment in which no body would be benefited. Present strategy would prove beneficial for the consumers as they would be able to get all services from single point of contact without any price bargaining. Hence more and more consumers would be attracted towards destination. For tourism industry stakeholders this strategy would be beneficial as it allows higher profit margins and lesser competitive expenses for the organizations. Hence strategy adopted in present context would be of benefit for all.
Travel & tourism business in present age
Travel & Tourism business in present age has shaped completely where in tourism is being driven by factors which were of lower importance in past but playing a major role to drive the entire industry in present time. Role of marketing & communication activities in tourism industry has increased rapidly where in marketing & communication activities are helping in adding awareness and revenue generation process. There are numerous destinations which are having natural charm but due to lack of awareness from the people in entire world these locations does not have enough tourist (Theobald, 2008). But in present age with the help of online resources awareness is being made among the consumers and even small online business has been setup in tourism industry for providing ease of use for the visitors.
Further in past people were having very low spending budget towards the travel & tourism while with increasing income resources spending power of the consumer has increased and people usually spend a big part of the their yearly income for the purpose of travel & tourism. Further present age is witnessing mass tourism while earlier tourism was limited to few people having particular interest in flora in fauna. Further present travel & tourism business is being driven by other supporting sectors such as hotel industry and aviation sector.
Further in past tourism industry was only limited to the particular place where in the tourism site is located but in present time entire city or country has been portrayed as the product for the tourism industry. Present tourism industry is witnessing a new trend in which entire city has been shown as a product, for example in the present context Costa Rica and Helsinki are being portrayed as the two products including attraction destinations, tourism markets, aviation industry, hotel industry and other service industries which are a part of the overall tourist place (Hunziker & Krapf, 2002).
Another important trend in the tourism business is towards building a brand for the tourist destination. In past there was no major branding and positioning being done for the tourist destination while in present age tourism business is witnessing major spending by the local or national government in order to position their tourist destinations as a big brand so that higher tourist footfall can be gained based on the brand image build by the marketing communication among tourist.
Analysis of competitor, supplier and buyer
Hotel Camp is one of the most renowned hotel industry players in Helsinki. It was built in year 1887 and considered as one of the historical hotel located in Finland. Hotel Kamp is a part of the famous hotel chain named Starwood Hotels & Resort Worldwide.
In order to accomplish present task Hotel Kamp has been selected Buyer analysis for the Kamp hotel reveals that buyer demand for additional customisation, there is lower level of price sensitivity among the buyers, buyers are having limited choice, there are large numbers of buyers for the Kamp hotel and there is low dependency on distributors for the buyers of hotel. This clearly indicates that buyers in Helsinki are having very low bargaining power due to the lesser choice availability and large number of buyers present in the market. Analysing supplier base of the organization it can be found out that there is substantial product differentiation, substitute has lower performance, there is high cost of switching with the other substitutes and substitute present in the market are limited in number as well (Beaver, 2002). Hence considering overall scenario it can be said that suppliers are having high bargaining power in the hotel industry in Helsinki as compared to the buyers. Competitors in the hotel industry are having high vintage and there is capital barrier for the new entrants in the industry. Hotel industry require economies of scale due to which smaller players can’t survive in the hotel industry, strong distribution network is another major feature which Kamp Hotel have and provide high competitive advantage in comparison to other hotel chains located in Helsinki. Requirement of advanced technology and patents also limits the number of competitor which Helsinki has in the market. Some of the major competitors in the market include Finn, Hilton Helsinki and GLO hotels etc.
P4.1 Response to the contemporary changes
Contemporary changes in the travel & tourism industry is affected the performance of all hotels including Kamp hotel and it is required that a strategic approach can be developed in order to respond to the contemporary changes in the industry. Kamp should put more emphasis towards developing strategic partners and offering one stop destination for all the service requirements of the visitors. By adopting strategic partners all services such as transportation, stay, food and other facilities can be provided as one bucket through which customers would be served and this long term strategic relationship would help the company to gain higher revenues. Another change which company should adopt is more and more focus on the service element and customization (Leiper, 2003). In service sector, presently customisation is demanded as price insensitive customers would demand customized services in place of the standard set of service provided to them.
Issues in present travel and tourism industry belongs to economic, consumer behaviour and marketing aspects related to the tourism and similar issues are also being faced by Kamp hotel as well. With bad economic scenario spending of consumers has lowered down which has affected overall revenues of the hotel. Further changed in consumer choices and dynamic changes would demand hotels to become more aggressive and customer oriented. Marketing has become one of the major problems for the hotel industry wherein due to fierce competition higher marketing budgets are being required by the tourism organizations.
Current trends in the tourism industry are such that they allow changing the product & service offering as per consumer need leading to high degree of customization. With development in technology present age marketers have developed easy means for creating awareness among the consumers base through methods such as social media and email promotions. Current trend in the tourism market has developed combined package and economies of scale which enhance revenue and reduce overall cost involved.
P4.2 Discuss the likely consequences of businesses failing to respond to market changes
Businesses which would not be able to respond to market changes would not be relevant to the consumer needs hence such businesses would not be able to compete with their competitors present in the market. Further consumers would not show their interest in such businesses as such businesses are not able to understand consumer needs and offer solution according to their needs. Such business would soon wipe off from the market and other market players responding to market favourably would take their place.
Present task has highlighted the role of organizations in tourism industry for responding to contemporary changed happening in the tourism industry. Further example of Hotel Kamp has been taken in order to highlight the trends and issues faced in the present age tourism industry with special context to hotel industry. Finally possible consequences for businesses failing in responding to market changes have been given.
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