Lecture notes
UNIT 10 ASSIGNMENT 3
- Institution
- PEARSON (PEARSON)
This unit will develop learners' knowledge of the business travel environment and the operational practices necessary to meet the needs of customers
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Unit 10 assignment 3Global economy
Global economy has had a massive effect on the travel and tourism industry and the growth and
recessions in a country effect the costs and popularity of the tourism in the country. The economy has a
huge effect on how well and country does affect in gaining tourists and how many people go on holiday
from the country. When a country is in an economic recession then the demand for business travel and
tourism is reduced and travel agents must find ways to attract more customers into the country. The
recession influences tourism because people and companies have less money to spend on going away.
However, if the economy is growing the people and companies within the country will have excess
money to spend on luxuries like going away on holiday and business travel agents profit more. Exchange
rates also have an effect what travel agents can sell. If a country has a very low exchange rate for the
currency, then people won't be able to afford to exchange as much money as they normally would as it
becomes too expensive.
The global economy can have a big effect on the operations of a travel agent. The travel agents have to
adjust the prices depending on the demand and the economy at the time to ensure that its possible for
people to go away on holiday at a reasonable price. At the time of writing the economy of the UK has
affected the travel due to Brexit having affected things like the exchange rates; as well the UK has been
in recession since 2008. The exchange rates in the UK is been lower in recent years as the uncertainty of
Brexit, this means that getting money for going to another country will be more expensive than it used
to be. This has affected the travel and tourism sector as people are more likely to take a holiday to the
UK as they will be spending less money on the holiday due to the exchange rates, this has helped the
economy as more money is being spend from those who come from abroad. However, people who want
to go on holiday outside the UK will have to spend more money to go away as the exchange rate are
low. This has resulted in less people going on holiday as they are not able to afford the growing prices,
this has affected travel and tourism companies as they are making less money. As well it affects what
products are being sold, people will no longer be able to afford the expensive first-class seats on the
plane and the demand of theses seats will go down and eventually be not needed. With travel
companies losing money they will start to shut down as they can't turn a large profit on the sales they
make, this will affect jobs and the economy of the UK.
The recession in 2008 had a massive effect on the travel sector, there was a drop of 15% of people not
going away in 2009 a year after the rescission started. The low amounts of people planning holidays
resulted in thousands of companies losing staff as there was no demand for the business travel industry
anymore. The loss of staff meant that flights and travel agents where no longer needed, this affected the
industry as many companies shut as they no longer had the funds to run. Since then the travel industry
has bounced back and gained popularity once again. The industry had to change the way they went
about things to ensure that could continue to get more sales, they started to venture to new
destinations and more exiting tourism options to attract people into buying holidays. and from 2008 to
20012 there was a decline in holidays and business trips being taken by UK residence. There has been a
rise of 20% in business trips since the recession showing that the industry has bounced back. The
increase in holidays has allowed the rise in the travel industry once again, there is a more of a need for
flights and routs that the flights will take meaning an increase in staff for research and cabin crew. The
recent changes in the economy has allowed the business travel industry to grow off the new
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