Internal and external factors Within travel and tourism inbound and domestic tourism are frequently changing, there are many internal and external factors which have a major impact and contribute to these changes. In this assignment I am going to analyse 3 internal and 3 external factors which affect the travel and tourism industry. Internal Strength of the pound
Depending on how strong the UK pound is determines how well the country’s economy is; if the pound is strong this means the country is doing well and vice versa. However this also has an effect on the number of people that visit the UK, a strong pound actually deters overseas visitors due to them receiving fewer pounds when exchanging their own money as one UK pound is worth more than one of their currency. 2010 Exchange rates ttp://www. xe. com/ 25/11/10 When the pound is weak this means the country’s economy is doing badly. For example, during the recent recession in 2008, although visitor numbers fell, the amount of money spent was increased from an average of ? 487 per visit in 2007 to ? 554 per visit in 2009, this is due to tourists receiving more English pounds when exchanging their money meaning they have more money to spend during their stay.
This has an impact on the Travel and Tourism industry; as the pound has become weaker this has resulted in overseas visitors being able to spend more money when they come to the UK and has lead to an increase in the average spends per visit, overall benefiting a number of sectors in the travel and tourism industry such as; transport, accommodation and attractions as tourist are putting more money into the UK economy. Visit Britain research, explains that the UK is an expensive country for many overseas visitors to visit, particularly from Europe’s new economies such as the Czech Republic, Latvia, Poland and Estonia.
Book one 3rd edition – Unit 3 – 24/11/10 Accessibility The UK is one of the best connected countries for overseas tourism, with hundreds of air routes, sea routes and also the more recent Channel Tunnel rail service bringing tourists from Europe into the UK which gives the country a great infrastructure for international tourism, the country also has a modern public transport network which is also suitable for people with specific needs such as mobility problems and is distributed throughout the UK due to the Disability Discrimination Act which came into power in 2004.
The excellent public network routes give visiting tourists the opportunity to easily travel around the country and get to the specific destinations that they desire to visit. The accessibility to the UK has impacted on visitor numbers and the frequency of people visiting, as it is easy for people to travel leading to people travelling more often.
The growth of low cost airlines and low transatlantic fares have been a major contributor to the accessibility in the UK offering people more flights for a low price, also new countries joining the EU and the emerge of new markets such as China and India will generate more visitors as air travel agreements between the countries and the UK come into action. Health, safety and security within the UK
The UK is known as one of the safest countries in the world for tourists to visit as the country has a very strict health, safety and security legislation; this was particularly due to other terrorist events around the world such starting from the 9/11terrorist attack in America in 2001 and also the more recent 7/7 London bombings 2005, which lead to increased security measures at railway stations across the country. Although these security measures can cause extra delays, many travellers will be willing to sacrifice this in order to have a safer journey.
Such terrorist events have the effect of temporarily deterring visitors from visiting a destination as they are worried for their own safety this is because many tourists tend to behave differently when they are holidaying, people who are unfamiliar with new surroundings are more vulnerable to crime. A result of the 9/11 terrorist attacks in America caused visitor numbers to drop in the UK from 25. 3 million in the year 2000 to 22. 8 million in 2001 as people were afraid to fly, however this was only temporary as numbers began to rise again in the following years as new security measures were introduced.
Visit Britain estimated that the 7/7 London bombings in 2005 resulted in a 2% fall in overseas visitors causing a loss of ? 300 million for the UK economy and also a total loss of ? 150 million to the capital as 50% of overseas visitors travel to London. Book one 3rd edition – Unit 3 – page 117 – 24/11/10 External Economic recession A recession is a general slowdown in economic activity over a period of time which is longer than a few months. During recessions many factors are affected such as; employment, investment spending, household incomes, business profits, bankruptcies and the rise in unemployment rates.
Governments usually respond to recessions by increasing money supplies, increasing government spending and decreasing taxes. In 2008 the UK went into a recession, this had a major effect on the value and volume of inbound and domestic tourism in the UK as visitor numbers fell during the year 2009 as a result of the recession. In 2007 the UK received 32. 7 million visitors, this fell to 31. 8 million in 2008 and fell further again to 29. 8 million by 2009. Tourists also began to spend fewer days in the UK during their visits decreasing from an average of 8. days in 2006 to 7. 7 days during 2008 onwards; this was affected due to people having less money because of the economic recession. http://www. vle. warrington. ac. uk/file. php/332/Inbound_Tourism_Facts_VisitBritain_Corporate_site. mht 22/10/10 The travel and tourism industry fears that it could take at least another five years before recovery of the economic recession sees an improvement, until then visitor numbers could continue to fall and the possibility of companies suffering from financial trouble could continue to rise.
Exchange rates Exchange rates fluctuate every day and they have a very significant impact on the number of inbound visitors in the UK. As the British pound is currently weak against the euro this makes the country more affordable and attractive as a destination for international tourists particularly countries who have the Euro or US Dollar as their currency, which means that the number of inbound tourists are higher as to when the pound is strong against other currencies. In 2000 ? 1 was equivalent to €1. 4 however, since then the strength of the British pound has continued to decrease and has hit a record low of just 1. 23 Euros for 1 British pound in 2008 and more recently €1. 17 to the ? 1 in 2010. 2010 exchange rates Book one 3rd edition – Unit 3 – page 118 – Ray Youell – 1/12/10 The following graph shows how the British pound has decreased against the Euro since the year 2000. http://news. bbc. co. uk/1/hi/business/7592971. stm 1/12/10 Although visitor numbers have declined from the year 2007 onwards due to the UK recession, the amount of money spent by tourists has risen from 15. billion in 2007 to 16. 5 billion in 2009. This is because of the impact of the exchange rates, because the UK economy was not doing well, this lead to the value of the pound decreasing against other currencies meaning lower flight fares, cheaper accommodation and cheaper Emergence of new markets Due to the UK becoming a more affordable country for inbound tourists this will impact future markets and will see slow rise in the traditional markets to the UK such as the USA, France, Germany and the Netherlands.
Some of the countries which show great potential for growth are; Poland, which seen a 97% increase in visitor numbers to the UK between 2004 – 2005; Hungary, who grew by 46% in visitor numbers over 2004 – 2005 period; Russia, which had an 19% increase of incoming market to the UK. There will also be an increase of new markets over the next 10 years from countries who have not previously considered the UK as a destination to visit, these include; South Korea, India, Mexico, South Africa, China, Brazil, Argentina, Thailand, Taiwan and Malaysia.
The following table shows that the top 3 fastest growing markets are all members of the European Union, this has been impacted from the decreasing strength of the British pound which has lead to the growth of these markets as the Euro has become stronger, also Poland, Czech Republic and Hungary have only recently joined the EU which is why they are the top three country’s in growth percentage to the UK as the country is now easily accessible and affordable for them. http://www. vle. arrington. ac. uk/file. php/332/Inbound_Tourism_Facts_VisitBritain_Corporate_site. mht 13/12/10 Visit Britain monitors all visitor numbers to the UK countries around the world and has the information available via their website www. visitbritain. org. Book one 3rd edition – Unit 3 – Ray Youell – 1/12/10 Arrivals Rank| 2007 Millions| 2008 Millions| % change 2008/7| 1 France| 81. 9| 79. 3| -3. 2| 2 USA| 56| 58| 3. 6| 3 Spain| 58. 7| 57. 3| -2. 3| 4 China| 54. 7| 53| -3. 1| 5 Italy| 43. | 42. 7| -2. 1| 6 UK| 30. 9| 30. 2| -2. 2| 7 Ukraine| 23. 1| 25. 4| 9. 8| 8 Turkey| 22. 2| 25| 12. 3| 9 Germany| 24. 4| 24. 9| 1. 9| 10 Mexico| 21. 4| 22. 6| 5. 9| Travel & Tourism Level 3 – Book1 BTEC national – Gillian Dale – page 86. This table shows the top 10 markets to the UK by volume and value. During 2008 was when the British pound hit a record low, from this table it is clear that many of the markets increased during this time as the UK was more affordable for them.