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Key issues in Business Environment in Travel & Leisure Sector

Question :
Make the academic business report in respect to following questions:
  • Identify and explain the key external issues in the business which are vital for the travel & leisure sector.
  • Describe the impact at macro level due to the nay 2 identify issues with the help of examples for hotel sub sector.
  • Enlist any two challenges which is being faced out in task a and b and also give suggestion for overcoming these challenges.
Answer :


The business environment is full of influencing factors including external and uncontrollable that affects an organisation decision making, performance and strategies. These factors are consisted of economic, demographic, physical, legal, technologies, ecological changes and political factors. Micro environmental factors are elements in an organisation's immediate area of operations that affect its performance and decision making process. Therefore, political instability, terrorism, technology, rising consumer demand and similar other factors have affected travel and leisure industry globally in various ways.

The report is about key macro issues in business environment that are significant for the Travel and Leisure sector. Further, it will cover impact of micro level due to some reasons including examples of business from hotel sub-sector.


a. Identify and Describe the key macro issues in the business environment that are significant for the Travel & Leisure Sector.

Travel and tourism sector has been reasoned as one of the world's foremost and changing industry being 2nd big export trade good. There are also, some dynamic factors that need to be understood in order to identify the future of travel business across the entire globe. Further, it has been observed that travel sector has to learn certain contemporary trends and factors that are directly influencing the sector (Barkauskas, BarkauskienÄ— and Jasinskas, 2015). To identify issues PESTLE academic model which is considered as a framework used by marketers to analyse and supervise the macro environmental factors and its impact on companies within travel and leisure sector and this model is being used to understand it deeply:

  • Political issue :- it has been noticed that, for travel and leisure political condition & steadiness is highly critical in deciding the image of destinations in regions which attract visitors.  Further, it includes the war, terrorism, aggression and coups also have a negative influence on the development of travel industry directly. As investment is brought by travel and tourism in any country, so instability in political factors can bring serious results to the comfortableness, leisure and safety (Zalengera, Blanchard and Gondwe, 2014).
  • Economic factors :- travel sector is being considered as one of the best industries in the world economically. Tourist have expressed great contentment in this particular sphere. However, it has been determined that the industry has to hold in perspective the state laws while recruiting and hiring staff. Moreover, the variation in currency rates between countries impact the international supplier market directly (Abbott,  2015).
  • Social :- there exist certain unique features of travel industry that have displayed their crucial role in making the organisation famous among its regular customers.  Similar to economic trends, social trends also give shape to tourism industry. It has been observed that a shift has taken place in consumer preference lodging in recent years. Moreover, the innovative culture designed by travelling sector has always attracted the clients. Therefore, the company must always consider the and respect the social values and rules of the customers from different backgrounds. One feature of negative social influence which cannot be avoided worldwide is that of child labour. As the sector involves the hotels and food processing organisations, who hire children as employees (Laverty, Thompson and Filippidis, 2018).
  • Technological factors :- this world is the time period of technology as the people here are now very much curious in adopting new technologies and always expect from good firms to adapt the latest trends of tools. From airlines to reservation and even merchandising, technology is considered as the biggest affecter. It has been observed that communication is facilitated by technology and transferral of message bridging the gap between respective parts of the world. Undoubtedly, it has been proved that technology is an enabler of tourism.  Moreover, the best utilisation of technology has made travelling more comfortable. Therefore, technology is a type of factor that give shape to the travel face at many other points too considering on the land and in the air (Torres‐Rouff,  Knudson and Stovel,  2015).
  • Legal factors :- legal factors include various issues that are faced by travel industry in daily aspects. The industry needs to follow certain legal laws and regulations, as these factors are such that cannot be ignored. Neglecting these causes and its impact could be deadly. This states that the regulative surroundings in the travel sector is complex. This is due to both working class and public safety are crucial. Apart from this, there are other law also exist that affect the industry. However, public safety & labour law are two most important concerns for it. Travel industry must always follow the rules and laws of the states which directly or indirectly connected with the entire process of travelling. In addition, staff training has also become vital to prevent any legal trouble and smooth running of the industry (Aithal, 2016).
  • Environmental factors :- the primary concern relate to the environs are the best utilisation of fuel and the waste of oil in the travelling sector. These specific environmental contaminate causes are also one of the key concerns when it comes to key environmental issues (Grzelak and Ghajar, 2017). The key concern for travel industry should be preservation of environment in order to abide by the global concerns associated to the environment of the earth. Further, in order to hold its perspective in the global market, it is necessary for the provision makers of the organization to develop an aspect leading policy in order to accomplish for the travel industry. It has been noticed that air-planes cannot fly in windy and story weather and if a disaster happens, it influences the whole industry. It is obvious that these changes in climate and seasons impact need and supply of touristry in several areas. Therefore, environmental factors have a key impact on tourism industry and cities that have more greenery and are cleaned receive tourist in larger number.

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b. Explain the potential impact at micro level due to any two reasons identified in point 'a' and provide examples of businesses  from the hotel sub-sector.

 Two key issue which were identified in part 'a' are; first is political aspect and environmental factors. The industry of hospitality is affected by both macro and micro factors, so the major issues identified in part a and there impact at micro level within hospitality sector is described below:

  • Suppliers :- both profit ans reputation of the hotel is affected by suppliers, hence, maintaining better relation with suppliers it essential. Actions taken by suppliers can affect the business strategy as material foe production is provided by them. For example Hilton's supply section team develops partnership to disclose sustainable products. The hotel acquired majority of its goods locally, with suppliers from more than 90 countries. The hotel hence, develops a policy which is sustainable to encourage suppliers to be sustainable. This states that, is the price is increase by suppliers of raw material, them it will affect the marketing mix strategy of the hotel (Dobbs, 2014).
  • Customers :- customers are considered as the key part of any business as they tend to attract and retain many customers to generate earnings. When customers have the power, they adversely affect the hospitality sector, therefore, the hotels must offer variety of services to customers (Pancoska and Carr, 2014).
  • Competitors :- it has been observed that, the competitors of the company have influence on the business strategies directly. In other words this states that hotels must understand their competitors marketing mix approaches including PESTLE analysis to have competitive advantage (Mathooko and Ogutu, 2015).
  • Media and social media :- the way media responses, that can make or break any industry, so hotel sub-sector needs to maintain a good relationship with them. The hotel industry must approach to newspapers to let public know regarding their business and programs and also services (Porter and Heppelmann, 2014).

The influence of politics upon hotels sub-sector is dynamic as in this the government affects the delivery of hospitality products through different political factors. Law makers introduced accommodation taxes to fund these marketing initiatives by choosing the specific tourism assets & destination they promote. Factors at micro level are directly affected by both political and environmental forces. It has been observed that, majority of political issues that affect the hotel industry directly come up at the state level. As stated that, political factors also include the warfare, terrorism, violence, etc., has a direct impact on customers within hospitality sector. Therefore, increase in government tax rates affect both customer and suppliers at micro level as increase in rates leads to increase in cost of material that is supplied to hotels (Jarzabkowski and Kaplan,  2015).

 Further, comes the environmental factors that affect hospitality sector adversely such as; water usage which is considered as the biggest problem in many resorts and hotels. Another issue is pollution, as there are high usage of oil, natural gas, or coal. Whether used for transportation or  something else, pollution causes a big problem. Changes in weather, climate or occurrence of disasters can affect customers reservations in hotels. Hence, through this explanation it has been concluded that both political and environmental factors impact at micro level within hospitality industry (Hwang, Park and Yoon,  2016).

c. Describe any 2 challenges you faced while carrying out both the task and suggest appropriate ways of overcoming such challenges.

 During the entire process of researching and completing this report I faced lot of difficulties due to lack of awareness on this topic and because of lack of research skills. A lack of awareness is refers to the failure to identify the consequences of the actions. This does not mean that I do not have knowledge that was required to perform the task, it is just that sometime I do not entirely assess the results of what I perform, or not perform. Having awareness is a quality that brings the best in finishing of a task.  Next key issue I faced during my assessment of the topic is lack of research. I was unable to research about impact of PESTLE model on tourism sector. Deficiency in identifying about various factors made it tough for me to find the major two issues in task 'a'. Further, in part 'b' I faced difficulty in researching about impact of two key issues of macro factors at micro level in hotel sub-sector.

 In realised that, to have awareness about various aspects of macro and micro environment I will look beyond the obvious. Moreover, take a break from a task and then look it from afresh and different perspective. I will collect information directly from travel agents and hotels to collect accurate details about it. It is specially important for me that if a task not performed by me previously and this task was new for me so I have little knowledge about it. In addition, I will use all the resources available, peers, supervisors and written articles. I will make the best use of available resources to build my awareness skills. Further, to improve my research skills, I will study every topic from relevant website that I can find. Read journals and books related to the subject or topic to acquire information required to complete the task.

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From the overall report I understood that how macro factor affect the travel & leisure sector directly in both positive and negative ways. I also learnt that, how two major issues in macro environment influence at micro level of hospitality industry.

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