To further understand how and why the fluctuation of exchange rate will affect travel agency, in this section, the report will apply those three economic principles mentioned above to the issue.
As aforementioned, there are three market segments in travel agency industry, however, this analysis will focus only on outbound tourism which is the main stream of revenue for the industry. In light of above analysis of the principle and factors influencing demand, exchange rate can be classified as price in the short-run. Travel prices including the price of transportation and the prices of goods and services consumed at the destinations (Dwyer et al., 2016), will rise significantly, thus, lead to higher price of travel agency service. Classified
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Tourism is an industry that is highly influenced by price, destinations with a high price competitiveness will certainly attract more tourists (Dwyer, Forsyth & Rao, 2002). When the exchange rate of Australian dollar is low, it will cost Australians more than before when they are travelling abroad, causing the overall price competitiveness of foreign destinations to decrease. The perception of a broad destination is expensive will more or less halt people from travelling there to seek for other domestic alternatives as a result of substitution effect (Quadri & Zheng, …show more content…
This report will then demonstrate how supply of outbound tourism packages will change as a consequence of change in its the demand of other products that travel agency can provide and profit expectation. As is discussed above, when the demand for overseas tourism package is low, people tend to travel domestically as an alternative, therefore the demand for domestic packages will rise. As a respond to that, travel agencies tend to redeploy their resources from outbound tourism to focus on the domestic travel product, hence the supply of outbound products will drop (Tribe, 2011). Conversely, when the exchange rate is favourable for Australian international travel, indicating a promising sales volume, firms have higher profit expectation in this segment and thus tend to provide more overseas destinations for their customer to
Various definitions of tourism exist. Tourism is defined by Macmillan Online Dictionary as the business of providing services for those people travelling for holidays. Tourism has experienced continued growth over the years and diversification and has become one of the fastest growing economic sectors in the world. For countries like Australia, it has become one of the major contributing sectors in the economy generating large proportions of the national income and at the same time increase employment opportunities. The future is still bright for the industry in the country with possible future growth in expansion and diversification. The industry however has both the pros and cons impacts to various ranges of environments (Tourism Research Australia).
An analysis of the potential for growth, size of the market and trends in tourism and any other factors you consider relevant. Tourism market potential growth: Australian tourism is one of the main economic contributors for Australia. Every state has its own signature tourism attraction spots and own personalities to attract both domestic and international tourists. Its unique flora, landscaping, geological status, history, culture and lifestyles are the main attractions for the
Casinos are seen as a potential tourist destination in Australia. Tourists are willing to travel to other destinations to gamble since gambling is seen as a novelist entertainment when compared with other entertainment such as cinema and sports (Novak & Allsop 2009). Statistics in 2006 to 2008 showed an increase of tourists who has travelled to Australia for the purpose of gambling. An increase in tourists travelling to Australia would benefit the Australian economy as it will generate more revenue. According...
For the introduction, brief information regarding my purchase and the travel and tourism industry is presented. It was then followed by the explanation of the 2 chosen theories from two different chapters.
UNEP, ‘Leakage’ 2013. Negative Economic Impacts of Tourism: Leakage. [online] Available at: http://www.unep.org/resourceefficiency/Business/SectoralActivities/Tourism/FactsandFiguresaboutTourism/ImpactsofTourism/EconomicImpactsofTourism/NegativeEconomicImpactsofTourism/tabid/78784/Default.aspx [Accessed: 10 Nov 2013].
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
I chose Travel Agent as my occupation because I have been fortunate enough to travel to France to visit family since I was young. I formed a love for French culture, language and cuisine. I want to be a travel agent because it will give me the chance to pass on my knowledge and interest in France and Europe. It will also give me a chance to be creative with the itineraries I put together. I like that a travel agent is trained to know how and where to find the best deals for their clients. Agents ask for client preferences and needs and they do the best with what you give them. I also would like to help clients when they 're not sure where they want to go. I would also enjoy having the chance to go to destinations observing the lodging, restaurants,
Stabler, M.J. Papatheodorou, A. Sinclair, M.T. (2010). The economics of tourism 2nd edition. New York: Routledge.
Tourism and Hospitality has developed rapidly and becoming extremely important to economy in the world. The income that several countries in the world receive from tourism industry can be reached to $1billion per year. In addition, Marketing is one of the most important factors that help and effect to tourism industry in many positive ways. Marketing evolved in the tourism industry since 1980. It promotes tourism industry by encouraging the tourists to travel at their destination with the strategy that made up to the tourist satisfaction. However, a marketing strategy does not have to be complex, in fact it should be a easily understood which ensure the advantage of marketing of the products and services to the tourist business to obtain positive
For New Zealand tourism has a lot to offer but at the same time, care has to be taken not to mistreat it. The social and cultural impacts of tourism on New Zealand so far have been on the whole beneficial but as tourism continues to grow this could change. Non-economic benefits of tourism are maximized when visitors and hosts share mutual interests and when trade is relatively small. However these factors limit potential tourist markets and income. One solution to this problem could be promotion of New Zealand as a high quality destination at a higher price, i.e. less tourists spending more money.
1.2 Problem Formulation In the problem formulation part of my report I would describe the overall situation of the U.K Tourism industry. The service concept of “Simply Travel” will give us information about the services provided by the company. I will find out about the customers, competitors of the company. I will find out what political, economical, social and technological factors affecting the company and its demand situation.
Travel Agency is a company or a person who arranges at the same time organizes services that are related to tours as well as travel in many countries all over the world. For instance, in Singapore, Travel Agencies have the mandate of providing travel as well as tour packages that involves travel by sea, air, or land.
The foreign exchange market is one of important mechanism in the international business because foreign exchange is an intermediary for all nations in term of the growth of the economy. There are many functions of foreign exchange market in the global economy. In the international business, it uses the foreign exchange markets in four ways. First, the pay...
This leaves the American consumer confidence laying low, and people are being more cautious on their spending and not splurging. This ties in with the pace of recovery for the hotel industry. But a stronger hit came to the industry, when the trend developed in the market for substitutes to hotels and motels. The consumer due to the economic decline has developed a taste for an economical traveling experience, these substitutes offer cost undercuts. According to the United States Department of Labour, the unemployment rate in the US averaged to 8.9% in 2011. Higher unemployment rates strains discretionary spending, which in turn reduces the leisure travel by the customers. Sluggish wage gains and credit crunch are all expected to keep customers relatively cautious in 2012. Thus, a weak economic outlook for the important markets of Hilton Worldwide would put pressure on its top line and bottom line growth (Hilton Worldwide, 12). The pricing factor is almost hard to match by the hotel industry, the consumer is becoming more demanding but also exigent in terms of low pricing. Switching costs range from negligible to high, but a factor that motels can’t substitute are the various benefits including spas, restaurants, or a community holiday feel brought with the package of any chosen hotel/motel. But the consumers in the US for example see the switch as more of a necessity rather than
What do the letters PESTEL stand for? Can you identify any links between some of these