The world has become an overactive participant of global marketplace. In contemporary time, the businesses around the world heavily rely on foreign market and as more and more businesses are going global in order to achieve maximum profit. However, there are distinctive divisive forces that influences the business and various industries in the global market. Whether it is the divisive nature of politics where brutal foreign policies and other activities occur almost every day and is amending the way distinctive industries are functioning in the global market. Henceforth the travel and tourism industry as well have been influenced by this divisive factors. The challenges that this industry has faced over the period is immense. The influence of political, economic situation of distinctive countries have affected industry of travel and tourism around the world. The difficult political situations along with ever changing economic trends are affecting the travel and tourism industry to significant level. In addition to this, the instability arising in political, economic area causes a more divisive environment. In order to assess the global travel and tourism pattern and the influence of divisive global environment the following discussion is made.
The primary aim of this particular study is to find out the divisive forces that exist in the global context in recent times and its impact on the travel and tourism industry. In addition to this, the study shall further analyse distinctive tourism provider and the various challenges they face in the context of modern days divisive environment.
Today’s global environment have become an unflattering surrounding where even though the international relations between distinctive nations exist however, in its core, the nations are becoming divergent and segregated from each other. According to Chimni (2017), the distinctive nation’s tendency of amending the traditional national interest and constructing a new world for the nation is what driving the government to introduce policies and strategies that are segregating the nations apart. In context of this, it has been observed the political functioning globally have become more divisive in nature where the governments are establishing policies that are dividing the international relations. Therefore, creating an environment that is segregating and toxic in nature. Whether it is Trump’s government implying the foreign trade policy that have unconventionally separated its ties with countries such as China and Japan (Westcott 2018). Similar to this situation, the global environment is shifting towards a platform where the international ties are slowly fading way and the nations are scattered. This has been impacting upon the distinctive business environment significantly and as a result of which are facing a global challenge coping with it.
The straining political situations of nations, the strict policies introduced by governments around the world and many such decisions have created a platform where nations are segregated from each other. The international ties between different nations are fading away and more brutal and chaotic environment is taking its place. In short the global environment are separated into divisions day by day.
The key divisive forces influencing global travel and tourism are political, economic, technological, environmental and social. The PEST analysis model developed by Francis Aguilar in the year 1967 would be the suitable model in order to analyse the key divisive forces that influences the global travel and tourism. The PEST model analyses the macro environment that exists in the market and have the potential of influencing the industry or a business on a significant level.
One of the biggest change that the world in recent times have evidenced is the Trump’s presidency and the policies he have introduced during his tenure. Henceforth, the political environment can be considered to be one of the key divisive force that is influencing the travel and tourism industry around the world. It has been observed that the Korean Tourism Organisation has been suffering over the period due to a straining political situation established between United States and Korea (Smith 2018). In addition to this, it has been predicted that the Korean Tourism Organisation shall see a fall of 27% arrivals in the coming years to come (Smith 2018). The United States (US) have been advancing progressively towards the declining positon of travel and tourism industry. It has been observed since the implementation of Trump’s strict travel policies, from anti-immigration measures to heightening security measures in airports, the US has suffered tremendously in attracting foreign visitors (Popken 2018).
The major challenge that the global travel and tourism industry is facing at the moment is the gradual slowdown of consumers spending on Travel and Tourism. This is as a result of the high inflation rate, increased amount of unemployment across the globe is further expected to be affecting the travel and tourism industry to a significant level (Wttc.org. 2018). For instance, in Britain the depreciation of sterling is predicted to be impacting on the outbound travel and tourism sending growth. Henceforth, it is forecasted that the outbound travel and tourism expenditure may lower by 4% and the most affective market that would suffer as a result of this would be the European tourist destinations and other long journey destinations such as USA (Wttc.org. 2018).Furthermore, the GDP growth of Britain is expected to slow down in coming years due to a number of factors such as rising costs, inflation, and others, this would affect upon the direct Travel and Tourism GDP growth (Wttc.org. 2018). This would affect the business of travel and tourism globally since less number of people from Britain would travel.
Social force
The divisive nature in the global context have given rise to socio-cultural conflict that affects the travel and tourism industry to a great level. For instance, the USA’s foreign policy have created boundaries between various nations that segregates one country from another. The foreign policy established by the Trump presidency not increased security but also have prohibited countries such as Korea and as a result of which the Korean Tourism Organization have lost its market in USA.
The study in this context is based on airline industry, which has been affected most due to the varying degree of globalisation. There are almost billion of people who avail flight around the world each of the year since they embark on holidays and business trips and huge amount of cargo are transported by air. However, without the international cooperation and access to international market, aviation could not have made so much of profit. However, the aviation provider has been chosen for the specific study, because, UK aviation industry has been arguably emerged through the European union more than any other industry provider’s BREXIT had a huge threat for airlines on both the sides of the network (Reid 2018).
The economic and political divisive force will be analysed in this study to evaluate the impact of this forces on the UK aviation industry. It has been found that the entire industry of aviation in the UK has established through the European law and has accessibility to the other markets such as United States and Canada, which has been secured through the block. This implies that the United Kingdom needs to deal with the neighbour for retaining their existing status quo. On the contrary Raconteur (2018) states that aviation has the major role to play in helping the global Britain in building a strong economy for supporting the society and its advantages of the entire United Nation.
UK has the biggest and most successful aviation network that is third largest in the works. It has also been found that aviation created jobs in UK encourages the economy for growing and connecting with the rest of the business nation. However, despite the successful history of aviation there are several factors such as economic and political forces that impacts the aviation industry in UK. Aviation is most polluting transport communication on the planer and its pollution consist of a major cost that is being contributed to the economy (Economia.icaew.com 2018). Aviation is also diminished directly and incidentally by the taxpayers, that is a major drain on the UK balance of payments. The cost of UK aviation for the change of climate estimated more than $2 billion in the year 2001. However, several hidden economic cost of the European Union sectors that have been estimated at $14.7 billion accounts to almost $3.767 billion (World Economic Forum 2018). It has been found that aviation is under taxed in comparison to most of the sectors. In this flight tickets, airplanes and fuel for aviation. In this aspect, the HM treasury gathers far less in air passenger duty than it forgoes owing to the VAT zero rating on the aviation products and the excise revenue. The impacts of this tax breaks and externalities is equivalent to 58million of people in the UK donating an average amount of $224 to the aviation sector each of the year excluding the cost of accident, direct and indirect subsidies for supporting the industries. However, Warner (2018) reported that tourism industry represent a drain on the UK balance of payments of almost $11.1 million each year.
However, BREXIT has a high impact on the aviation industry-giving rise to obstacles for UK airlines to operate in European Union and the international boundary for reducing connectivity, choices of travel and business travelling options. In this aspect, schemes like proposed European information of travel and registration system has now started charging $7 fee for obtaining authorisation for travelling (CityLab 2018). The aviation industry s high comparative market that highly driven by price consciousness and fast changing needs provided with long-term internet in the major infrastructure. This is because, the industry is highly attractive for the new emergent and disruptors for which the returns they receive seem to be relatively low however, the impacts may be global in nature but the challenges faced by the aviation industries due to economic policies are often local.
According to, Reid (2018) an analysis on the International association of transport have found that there are big changes made in case of revenue. In this aspect, IATA has assumed that combined revenues for the airlines will be reached at $736 billion with $31.4 billion in profit by the end of the year 2017 from $510 billion in the year 2007 (Zee 2018). During the period of international recession the industry, it forced the airline industry to adjust with the business operations. In case of Airbnb, shared economy makes them the leaders of the aviation industry. The company is developing their resources where the economic resources of the company is highly shared in between various organisation and individuals. Airbnb has grown their revenues and is increasingly giving major competition two the hotels and motels in United Kingdom. Airbnb offers cheap substitutes for renting their service for which they have exponentially increased their service within a short duration of time; presently the company serves more than 9 million of people globally. Apart from these, that company has offered several jobs to the hosts to the people who deliver offer their homes to the visitors. By doing so, the company has benefited the state by generating millions of expense and full time employment in New York. Therefore, the organisation’s economic activity accounted for more than $600 million and offered almost 4000 jobs (Arthur 2018).
It has been reported that never before, the country has experienced such change in the behaviour of the consumer that hit the travel and tourism industry hard. The previous year certain supplier of travel that reported almost 60% of decline in the brand booking that has been taken by the mobile savvy, high cost intermediaries. The lodging industry has faced a high challenges posed by Airbnb and other business as well. This is because, Airbnb helps in generating a potential volume of accommodation revenue in rental for taking part in the hosts, in this context, the company claimed to have more than 60 million guests and they deliver accommodation rental in almost 34,000 cities over 190 countries (Reid 2018). This has increased a high revenue and economic challenge for the hotels in the midscale industry where the main reason for the guest to booking through the Airbnb was due to the customer driven price.
Now from the above discussion it can be said that due to the divisive global environment the travel and tourism industry have suffered tremendously. Taking into account of aviation industry some of the challenges that the industry may face in future are as follows –
The safety concerns related in the aviation industry have been one of the highlighting challenges in present and may remain in future as well. Even though the aviation industry have improved a lot since the early days where in 2013 it was reported that 16 fatal accidents occurred (Taylor 2018). However, the numbers are scrunching day by day since the airline industry are continuously in process to make the technology and safety measures extremely advanced. However, this still remains one of the biggest challenge in the aviation industry.
Another major challenge that the aviation industry may face is implying sustainable travel experience and environment. It is particularly difficult in the airlines industry to maintain sustainability due the amount of emission it produces during the propelling of aircraft. Even though major steps have been taken in order to put a restrain on the amount of emission, this still remains a major challenge in the field of airlines industry.
Another challenge that the aviation industry faces is the issue of open borders. For the aviation industry to flourish and develop it is important distinctive nation borders are open for people and trade. It is also significant to increase connectivity where the demands of people are ever increasing. However, with the global environment advancing towards a state of being divisive, where the foreign trade policies of many countries compromised, the aviation industry shall face major challenge in order to keep the industry on the profitable side (Taylor 2018).
However, from the progressive results of the past, it can be said that the aviation sector is always in the procedure of development and improvement. In fact the industry have the ability to be equipped to tackle the challenges and flourish in the field of travel and tourism industry. The advancement in technology and new models of aircraft being in the industry the challenge of doing business sustainably have been tamed over the period. In addition to this, the safety measures adopted by the airlines industry across the globe have seen major progress over the period. In fact airlines is considered to be one of the safest way to travel and the industry is in the process of further taming this challenge. Henceforth, it can be said that the travel and tourism industry is equipped to tackle the challenges that occur globally.
From the above discussion it can be said that these divisive forces have influenced the global travel and tourism pattern to a significant level. The instability in political, economic, social forces have created a segregation among nations and as a result of which have affected the travel and tourism industry to a significant level. From Trump’s presidential schemes to instable GDP growth of various nations, to different political unrest have pushed the world in a divisive environment.
References
Arthur, C. 2018. Why the sharing economy could be the internet’s most divisive revolution yet. Online the Guardian. Available at: https://www.theguardian.com/technology/2014/dec/21/sharing-economy-divisive-uber-airbnb Accessed 16 Nov. 2018.
Chimni, B.S., 2017. International institutions today: an imperial global state in the making. In Globalization and International Organizations. pp. 41-78. Routledge.
CityLab. 2018. What Airbnb Did to New York City. Online Available at: https://www.citylab.com/equity/2018/03/what-airbnb-did-to-new-york-city/552749/ Accessed 16 Nov. 2018.
Economia.icaew.com. 2018. Industry challenges: Airlines. Online Available at: https://economia.icaew.com/features/february-2018/industry-challenges-airlines-business-brexit-transport Accessed 16 Nov. 2018.
Popken, B. 2018. America is no longer the second-most visited destination in the world. Online NBC News. Available at: https://www.nbcnews.com/business/travel/tourism-u-s-down-trump-took-office-costing-4-6-n840326 Accessed 16 Nov. 2018.
Raconteur. 2018. What could Brexit mean for the UK aviation industry?. Online Available at: https://www.raconteur.net/business-innovation/brexit-uncertainty-uk-aviation Accessed 16 Nov. 2018.
Reid, D. 2018. Airbnb is making rents in New York City spike as owners yank units off the market. Online CNBC. Available at: https://www.cnbc.com/2018/01/31/airbnbn-pushing-up-new-york-rent-study-claims.html Accessed 16 Nov. 2018.
Smith, O. 2018. How Trump has impacted world tourism – one year on. Online The Telegraph. Available at: https://www.telegraph.co.uk/travel/lists/how-trump-impacted-world-tourism/ Accessed 14 Nov. 2018.
Taylor, M. 2018. Challenges the Aviation Industry Faces. Online TravelPulse. Available at: https://www.travelpulse.com/news/airlines/challenges-the-aviation-industry-faces.html Accessed 16 Nov. 2018.
Warner, J. 2018. How will Brexit impact airlines and the wider aviation industry?. Online IG. Available at: https://www.ig.com/uk/news-and-trade-ideas/shares-news/how-will-brexit-impact-airlines-and-the-wider-aviation-industry–180316 Accessed 16 Nov. 2018.
Westcott, B. 2018. Donald Trump’s unconventional diplomacy is pushing China and Japan closer together. Online cnn.com. Available at: https://edition.cnn.com/2018/10/24/asia/japan-china-us-trump-intl/index.html Accessed 16 Nov. 2018.
World Economic Forum. 2018. Four threats to aviation security – and four responses. Online Available at: https://www.weforum.org/agenda/2016/07/four-threats-to-aviation-security-and-four-responses/ Accessed 16 Nov. 2018.
Wttc.org. 2018. Online Available at: https://www.wttc.org/-/media/files/reports/economic-impact-research/2017-documents/global-economic-impact-and-issues-2017.pdf Accessed 20 Nov. 2018.
Zee, R. 2018. The ‘Airbnb effect’: is it real, and what is it doing to a city like Amsterdam?. Online the Guardian. Available at: https://www.theguardian.com/cities/2016/oct/06/the-airbnb-effect-amsterdam-fairbnb-property-prices-communities Accessed 16 Nov. 2018.
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