Describe about the Contemporary Hotel and Tourism Issues for Business Exploration.
Rise in population and mixing of culture has risen the opportunity to explore unseen beauty of nature. People on different corners of the world have raised 4.4% travel record indicating 1184 million in 2015, which is associated with 4% increase in international tourist arrival (Wu et al. 2016). Even though tourism has been expanded a lot, still there are many issues that this industry has to face.
In this report, three most impactful issues that tourism industry has to face will be discussed. Cost of fuel, political condition and environmental constraints will be explained throughout in this report. Change in fuel prices and change in tourism demand due to price hike will be explained. Transnational relationship keeps on changing, which eventually sets up the fluidity of tourism. Considerable impact of political changes will be explained in this report. Finally, even though environmental protection initiatives are designed to promote sustainable tourism, still it influences hospitality sector functionality, which will be further explained in this paper.
Cost of Fuel (Global Issue 1)
Tourism is one of the prime sectors in Australia, which is effected by the rising cost of fuel. As per the Australian Bureau of Statistics, the tourism industry of Australia contributes 3% to the GDP of national economy. The statistic also demonstrates that Australian tourism achieved almost 647,200 visitor arrivals during September 2016 (Ruhanen, Mclennan and Moyle 2013). Rising cost of fuel has become a global tourism issues and it is not limited within Australia. Travel and tourism is highly dependent for rising cost of fuel. According to World Tourism Organization, the international tourism arrival grew by 4% until 2013 (Hall, Scott and Gössling 2013). However, rising cost of energy has forced the tourism sectors to cut down their amenities and increase the price for the tickets.
According to Tarrant et al. (2014), recent rise of gasoline has major impact on overall tourism industry. The high season for travelling is summer and in this time rise in gasoline causes the tourism industry to raise their ticket price. It causes the travelers to adjust their spending with the increasing ticket price. On the other hand, Ruhanen, Mclennan and Moyle (2013) opined that airline is the most affected transported medium within tourism industry with the rising cost of fuel. However, customers have option to choose the alternative medium, which involved cheapest travelling cost. However, while travelling between airport and exact location of hotel, the passengers are bound to pay extra charge of transportation medium due to increasing fuel price. Therefore, there has been a decreasing rate of traveler on the overall global tourism industry, which is preventing the development of the industry (Mariani et al. 2014).
According to Werthner et al. (2015), in case of hotel accommodation, the rates of hotels are also highly affected by the rising cost of fuel. As per the location specific requirement, the hotel room must be lit, cooled, heated and humidified. Therefore, most of hotels in tourism industry have started to provide poor service to the customers for adjusting with rising fuel price. It is creating under-development of tourism industry in an international basis. On the other hand, Duval (2013) opined that rising price of fuel is also forcing the tourism sectors towards cost cutting through firing employees. It has been found that The Grace Hotel in Australia had taken strategy of employee firing due to rising price. They had taken the strategy to adjust with increasing rate of fuel. However, in this way, the organization lost various talented employees towards the development of the organization. Moreover, 6% decline in global visitors has been found when gas hit $4 (Hospitality Net 2016). Furthermore, business traveler has reduced their number of business trips and scheduled them with lot of other appointments.
Political Condition (Global Issue 2)
Political condition has been a major challenge to the global tourism industry. According to Cohen and Cohen (2012), tourism industry is to deal with ever confusing and complicated political reality in an international basis. Tourism is the major industry contributing to the national economy of a country. Therefore, an ever-increasing support can be found in every country’s Government towards the tourism industry. However, visa restrictions are always associated with the tourism industry while operating in international basis. For example, due to political instability, Malaysian Government has banned the visa of Israel (Cohen and Cohen 2012). Therefore, the tourism industry in Malaysia is facing huge loss from decreasing rate of visitors. On the other hand, opined that terrorism and political instability can maximize variants in tourist arrival up to 74%. Duval (2013) pointed out that an increase of 1% political instability can reduce tourism revenue up to 36%. Moreover, tourism activities can also be at high risk due to uncertain political environment like civil wars, coups and social unrest. It can create vulnerability and terminate the decision for the development of tourism industry.
As per ocr.org.uk (2016), political instability among different country can also causes increasing terrorist attack on the concerned countries. Therefore, the tourists can be highly affected and unsafe with such terrorist attack. For example, due to increasing civil war in Iraq and increasing terrorist attack in Iran, USA has posted serious “travel warning” on traveling to these countries. Therefore, a lack of development can be found on the tourism industry on these countries. On the other hand, Mariani et al. (2014) opined that the Government of developed countries such as USA and UK impose high tax on the tourism sectors operating in an international basis. Therefore, it creates increasing operational cost for the tourism sectors in an international basis. According to Hall, Scott and Gössling (2013), political condition in relations to cultural aspect may also influence the tourism industry in an international ground. It has been found the cultural aspect of USA and Australia is completely different from those of Iran, Iraq and Dubai. Therefore, the tourists of these countries are most unlikely to visit USA and Australia, which is severely affecting the tourism industry of these countries (Libguides.cdu.edu.au 2016).
Environmental Issue (Global Issue 3)
Negative impact of tourism on environment happens when level of tourist use is higher than the ability of the environment to cope up with its acceptable limits. Uncontrolled conventional tourism imposes negative threat on the environment. Pulido-Fernández, Andrades-Caldito and Sánchez-Rivero (2015) opined that most of the tourism sectors in developed counties like UK and USA have able to establish controlled carbon emission. However, due to financial constraints, developing countries are still struggling in balancing environmental sustainability and revenue earning capability.
According to Buckley (2012), coastal areas are the most fragile part of ecosystem and therefore hospitality sector even though has the capacity to allow huge tourists to experience coastal flavor still they need to limit tourist access, which hampers revenue earning. On the other hand, Duval (2013) pointed out that in order to conserve ecosystem in Philippines, utilization of available forest resources have been made limited, due to which hospitality sector has to import items from abroad, which is increasing cost of capital.
According to Duval (2013), due to global warming top tourist attraction in Thailand such as Pattya and Krabi is facing massive climate change. This has resulted in discrete tourist concentration all throughout the year. From September to January there is huge flow of tourists but the rest of the months are facing lack of tourist concentration. On the other hand, Werthner et al. (2015) pointed out that in India, Goa and Shimla is having huge tourist attraction throughout the last decade. However, the government has banned the use of plastic, hence hospitality sector has to depend on can, glass and reusable materials for food delivery, which adds up to service cost.
Tarrant et al. (2014) opined that due to environmental protection, countries that completely depend on tourism such as Macau, Bahamas, Bermuda, Aruba and Tanzania have to acquire latest technologies that will reduce carbon emission. These countries are still not able to implement comfortable transport system or logistics options. Most of the necessary products, equipments and tourist necessities are to be bought from neighboring countries, which increases the service cost. Furthermore, Ruhanen, Mclennan and Moyle (2013) pointed out that with the increase of service cost, the hospitality industry of such countries are losing demand from middle class people, which impact mostly on the country’s economy. Finally, Mariani et al. (2014) pointed out that while ensuring environmental conservation, tourism industry is not able to develop its innovative products and services as those may hamper environmental protection laws. A whole nation may have diverse tourism sectors but not all those may fall under same environmental conservation laws, which ultimately limit innovation in hospitality sector.
While summarizing, it can be said that the global tourism industry has to endure a lot to expand and sustain. Cost of fuel keeps on changing from time to time especially in the developing nations, which impacts tourism. With the increase in fuel price, the transportation sectors are being forced to increase their ticket price. Therefore, the tourists are becoming less willing to spend money on travelling. In is creating huge loss on travel and tourism sector. Apart from that the rise in fuel price also increases the hotel rates. Therefore, it has dropped the visitor rate for international tourism sector. Political conditions and international relations in developed countries impacts on tourism supply chain. Higher tax rate imposed by developed countries increases the visa charge of the tourist and operation cost of tourism sector. Apart from that, increasing terrorism attack also hampers the developmental phase of tourism sector. Environmental issues affect tourism industry by limiting revenue earning capability and innovation as well.
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