Travel and Tourism Business Environment and Organizational Characteristics

1. Know the different types of organisations operating in the travel and tourism business environment

2. Know the characteristics of different types of travel and tourism organisations

3. Understand how travel and tourism organisations gain competitive advantage to achieve business aims

4. Be able to produce a business case for a travel and tourism enterprise within financial constraints.

Travel and Tourism is one of the world's largest and exciting sectors, employing over 231 million people in a variety of roles. Job opportunities exist in many different areas of tourism including travel agents, tour operators, airlines as well as tourist boards, visitor attractions and strategic authorities dealing with travel to the UK. Now a day’s almost all the travel and tourist organisations are facing for competition in order to increase business.  As a newly appointed Travel consultant to a reputed travel agent, you have been entrusted to research on the following four tasks. 

1: describe the travel and tourism business environment by providing a short description of each item of range as follows: public sector; private sector; geographical sector.

Travel and tourism business environment: public sector; private sector; geographical eg local, regional, national, international, global; importance to international and UK economy eg GDP, employment

Types of organisations: public sector (government controlled, local government controlled, membership);private sector (public limited company, private limited company, partnership, limited liability partnership, sole proprietor, franchise); inbound; outbound; domestic tourism

2. Review the methods and opportunities used by travel and tourism organisations to gain competitive advantage and achieve business aims, providing examples.

Characteristic – organisational: business structure eg companies, partnerships, government, members; business organisation eg vertically integrated, horizontally integrated, autonomous; control eg proprietor, board of directors, trustees; documentation for business set-up eg certificate of incorporation, memorandum of association, articles of association; liability eg to shareholders, to partners, to members, to taxpayers

Characteristics – financial: distribution of profits eg dividends to shareholders, retained profits/surplus; sources of finance eg bank, friends and family, shareholders, grants, public funding; to supply products and services eg to make a profit, at cost, to meet a demand, for customers, for other businesses, for
government agencies; financial accountability eg to the HM Revenue and Customs, to Companies House; contribution to global and UK economy eg GDP, employment

3. Most of the travel & Tourism organisations are gaining competitive advantages by introducing total quality management (TQM) Explain five methods with examples, which are being practiced by travel and tourism organisations. 

Learning Outcome

Aims: financial eg to increase revenue, to make a profit; image eg environmentally friendly, involved in responsible tourism; products eg improve quality, to meet a demand.

Gaining competitive advantage: methods and opportunities eg providing added value, providing new and innovative products and services, embedding Total Quality Management, providing excellent customer service, training and developing staff, targeted advertising and promotion, innovative pricing policies, locational advantage, modern sales techniques, through integration, through consortium membership

 
4: describe the organisational and financial characteristics of two different types of travel and tourism organisations with different structures

Business case: objectives eg to make a profit, to raise funds, to cover costs; timescales; financial eg funding,costs, revenue; marketing eg strategy, mock-ups; actions required

Financial constraints: fixed sum available eg donation, loan, inheritance, public or private funding Enterprise: eg business venture, charity/fundraising event, profit-making project

Cash flow forecast: cash inflows, eg sales, start-up capital; cash outflows eg payments, raw materials, loan repayments, overheads, purchase of fixed assets; net cash flow

Feasibility: the business case is researched and realistic and will achieve set objectives eg make a profit within given timescales, raise income and cover costs, meet a recognised demand, target appropriate markets, take account of competition, gain competitive advantage, raise money for charity

Q1. Travel and tourism business environment: public sector; private sector; geographical eg local, regional, national, international, global; importance to international and UK economy eg GDP, employment

Types of organisations: public sector (government controlled, local government controlled, membership); private sector (public limited company, private limited company, partnership, limited liability partnership, sole proprietor, franchise); inbound; outbound; domestic tourism
    
Q2. Characteristic– organisational: business structure eg companies, partnerships, government, members; business organisation eg vertically integrated, horizontally integrated, autonomous; control eg proprietor, board of directors, trustees; documentation for business set-up eg certificate of incorporation,memorandum of association, articles of association; liability eg to shareholders, to partners, to members, to taxpayers

Q3 Aims: financial eg to increase revenue, to make a profit; image eg environmentally friendly, involved in responsible tourism; products eg improve quality, to meet a demand

Gaining competitive advantage: methods and opportunities eg providing added value, providing new and innovative products and services, embedding Total Quality Management, providing excellent customer service, training and developing staff, targeted advertising and promotion, innovative pricing policies, locational advantage, modern sales techniques, through integration, through consortium membership

    
Q4. Business case: objectives eg to make a profit, to raise funds, to cover costs; timescales; financial eg funding, costs, revenue; marketing eg strategy, mock-ups; actions required

Financial constraints: fixed sum available eg donation, loan, inheritance, public or private funding 

Enterprise: eg business venture, charity/fundraising event, profit-making project

Cash flow forecast: cash inflows, eg sales, start-up capital; cash outflows eg payments, raw materials, loan repayments, overheads, purchase of fixed assets; net cash flow