OF

{BUSINESS ENVIRONMENT}

TOPIC – (PESTLE ANAL. OF TRAVEL

INDUSTRIES)

SUBMITTED TO-
MR. MANISH RAJPUT.
SUBMITTED BY-
NAME - MAHESH KUMAR
CLASS - MBA {193}
ROLL NO. - RS1903 B.55
REG. NO. – 10907445
 { INDEX }
1.INTRODUCTION.

2.ADVANTASES OF TRAVEL INDUST.

3.DISADVANTASES OF TRAVEL INDUS.

4.PESTLE ANALYSIS.

5.CORPORATE GOVERNANCE.

6.KEYS FACTORS FOR SUCCESS.

7.CHALLENGES FOR TREVEL INDUS.

8.PESTLE ANALYSIS FRAMEWORK.

9.PESTLE ANALYSIS OF TRAVEL INDUS.

 POLITICALS IMPACTS.

 ECONOMICAL IMPACTS.

 SOCIAL IMPACTS

 TECH. IMPACTS.

 LEGAL IMPACTS.

 ENVIRONMENTAL IMPACTS.

10. STEPS FOR REMOVES THE IMPECTS.

 11. CONCLUSION.

INTRODUCTION TO TRAVEL INDUSTRIES-

If we think about the term ‘travel’, than the first thinking is comes
in the our mind that it is related to trains, busses, airlines etc . So these all are
related to the travel facilities. we use these facilities for travelling from any
place to another place . These all are related and performs under some
industries, it means these all are having their own industries. The 2009-2010
periods finds the travel industry continuing to face challenging times.
Consumers’ budgets are tight, and they are cutting down on unnecessary
expenses. When the middle class does take a vacation, it is on a reduced
budget. Meanwhile, corporate and business travel budgets are tight as well.
The travel industry is acutely aware of this problem. Most airlines have cut
routes and reduced the total number of seats available, partly by removing
older, fuel-guzzling aircraft from service. Travel providers of nearly all types are
competing fiercely on price or are offering their customers special inducements
and packages. The U.S. Travel Association (USTA) estimate total U.S. travel
expenditures at $772.9 billion for 2008, $739.4 billion in 2007 and $699.8 in
2006. According to the World Travel & Tourism Council (WTTC), the global
travel and tourism industry supported 77.2 million jobs on a direct basis in
2009 (a 1.9% decline from 2008), generating $1.87 trillion in direct global
revenues (a 3.5% decline from 2008, and an amount representing about 3.2%
of total global GDP).
 The WTTC forecasts real annual revenue growth averaging
3.6% between 2009 and 2019, boosting the 2019 total to $3.39 trillion. The
WTTC also prepares an estimate of the total effect of travel and tourism on
GDP (gross domestic product), including both direct and indirect revenues. On
that basis, the group estimates the total impact of the industry on global GDP
at $5.47 trillion or 9.4% of global GDP for 2009.

In the WTTC’s figures, the U.S. accounted for $1.64 trillion

in direct plus indirect travel expenditures in 2009, followed by Japan at $551
billion and China at $526 billion. China is the market to watch, with 100 million
Chinese expected to travel to foreign lands in 2018. Many airlines took
bankruptcy protection in 2008, including Frontier, and some, such as Aloha
Airlines and ATA, once major airlines in Hawaii and elsewhere, were forced to
discontinue operations altogether. Several specialty and business-class-only
airlines ceased operations, including MAX jet, Eos and Sky bus. These all
facilitates us. Government-controlled Alitalia, in Italy, took bankruptcy in August
2008.Hotels throughout the world enjoyed a major boom through mid 2007,
with high occupancy levels, rising room rates and strong levels of both
business and leisure travelers. However, the global financial crisis put a
damper on hotel occupancy that continued into 2008 and 2009.

Many major hotel construction projects have been

cancelled or put on hold. E-commerce continues to play an extremely
important role in the travel sector, making booking convenient for consumers
and more cost-effective for travel providers. However, online travel booking
sites like Orbits and Expedia face tough competition. Today, airlines and hotel
chains are offering their own powerful online reservation systems, with rich
features, multiple levels of photos and descriptions, and the ability to earn and
manage frequent flyer awards. Consumers often find the lowest prices on sites
operated directly by airlines and hotels. The cruise line business has held up
relatively well in the onset of the financial crisis, particularly at the largest
cruise lines. However, these companies often offer deep discounts today in
order to fill cabins. Consumers see cruises as high-value package deals, and
cruise ships are nearly full.

ADVANTAGES OF TRAVEL INDUSTRIES-

In present time the transportation have play an important

role in the life of human being because he wants to reach on his specific way
as soon as possible and on the reasonable time .thus the travel industries
have many advantages; some of major advantages are given bellows—

1. Travel industries help the human being in providing the transportation

facilities.

2. Travel industries help in the tourism aspects.

3. Travel industries provide us to travel across the world with the saving of
time as well securing of the health.

4. The main advantage of the travel industries is the saving of the time factor
because with the help of the transport we can reach on the work place on the
fix time.

Thus we can say that the travel facilities helps the human being in many
ways, it makes the human being’
DISADVANTAGES OF TRAVEL INDUSTRIES-

If the travel industries have the major

advantages, on the other hand there are many disadvantages also there like –

1. More traffic in the air, skies, water, roads make for more pollution.

2. Money that could be spent elsewhere is invested in tourism. I.e. roads,

schools,

3. Tourism can cause a greater risk of crime. (More people to prey upon.)

4. Tourism encourages the breakdown of Bahamian culture, or culture to be

diluted for tourist participation.

5. Many people in the tourism industry are working long hours and many days;
families are not together as much, breaking down the family dynamics.

CORPORATE GOVERNANCE OF TRAVEL INDUSTRIES-

Corporate governance is concerned with holding with the balance between

economic and social goals and between individual and communal goals. The
corporate governance framework is there to encourage the efficient use of
resources and equally for the stewardship of those resources. This is the
system by which companies are run and the mean by which they are
responsive to their shareholders employees and the society. It is the system
related to the ethics, values and morale of the company.
The main rules and regulation are also available in the environment of market
like-

 The rates of the rents which are allows and fix by the govt.

 These travel industries also thing about the welfare of the customers
because if the consumer is not satisfied by the services of these
industries than they will not take interest in that company or industry.

 The rout limits are also fixing by the govt. of that nation. If we take the
example of the train rout than we well know that the route of the diff. diff.

 The payment of the taxes and excise duties should be there.

KEYS FACTORS FOR SUCCESS-

In the history of the travel industries there are many keys

factors are available in the market as well as in the management of their
department. There are many keys which are discuss belows-

 This industry always works on the consumer satisfaction and for the
welfare of the customer.

 If we take the example of the buses and train , these industries provides
the betters facilities to their travelers

 On the other hand if we take the example of the airlines industries, they
also provide the best facilities because the consumer spent the money for
the better results of services which are holding in the behalf of the
payment.

 The others key factor is the facing the competition in the market, as the
result of the competition facing these industries are professionally
performed in the market.
 In the factor of competition the direct benefit is going to the consumer as
they launched different types of facilities, discount policies and others plus
benefits to the consumer.

CHALLENGES FOR THE INDUSTRIES-

In the present market these industries facing many challenges in the

performing as well as for staying in the competitions. So there are many
factors which are created the problems for these industries-

 In the travel market there is condition of the counter attack because at

the result of increasing of the competition the policies and planning are
changes time to time.

 The govt. factor is also creating the problem for the travel industries. In
this factors we include the taxes, excise duties, banned on the routes,
limited routes etc.

 Another one impact and challenge for these industries are facing the
competition, because in present time there is very hard competition in
the market.
  The consumer also having their own vehicles, at the result of this they
used their own cars for travelling purpose.

CORPORATE SOCIAL RESPONSIBILITY-

In the CSR of travel industries we can includes different

points.

 CSR and the Tourism Agenda:

UN World Tourism Organisation’s
Global Code of Ethics
Integrating the Triple Bottom Line:
Social, Environmental and Financial

 CSR Challenges: Learning from Industry

Aviation
Hotel Companies
Tour Operators

 Eco-tourism and the Environment

Sustainable sitting, design and construction
Benchmarking and Certification
Partnership Models

 Community Investment
Supporting local projects and local communities
Promoting CSR throughout the supply chain

Key benefits of attending the event:-

1. Understand the role of CSR in developing the travel, tourism

and hospitality industries in Identify key social, environmental and cultural
issues confronting these industries’
Sustainability
2. Improve capacity to manage future risks as they arise
Learn about international standards such as the Global Code of Ethics and
how to implement them across the organisation.
3. Gain practical ideas and best practices from leading
companies and practitioners Engage with local communities and groups to
promote sustainable tourism
 4. Access different recognition schemes and benchmarking
opportunity Network with fellow delegates to share perspectives and
experiences

PESTLE ANALYASIS-

PEST Analysis is a simple, useful and widely-used tool that helps

you understand the "big picture" of your Political, Economic, Socio-Cultural and
Technological, Legal and Environment factors. As such, it is used by business
leaders worldwide to build their vision of the future. in the study of the pestle
analysis of anything we also comes to know about that what is the condition
and what are the factors are available in the environment which effect that .

PEST Analysis for a Company in the Tourism Industry

The Tourism industry is one of the fastest growing industries in the world. The
World Travel and Tourism Council estimates that in 2004Travel and tourism is
expected to generate

* US$ 5,490.4 billion of economic activity

* 10.4% of total GDP

* 214,697,000 jobs or 8.1% of total employment

* 12.2% of total exports.

Within the tourism industry, I have to select one area of interest like
transportation, accommodation and transportation etc. and then one company
doing business with these sectors related with the tourism. During my research
on internet I found many companies offering services in the tourism of U.K but
I have decided to choose “Simply Travel” because of its variety of services
offering related with the accommodation, transportation and attractions.

Customers-

Holidaymaking is the main reason that UK residents travel abroad.

As the company deals with the both inbound and outbound tourism I will have
a brief look on the inbound and outbound market. Number of overseas visits by
UK residents increased to 59.3 million in 2002.Expenditures by these visitors,
excluding international fares £27.07 billion-slightly higher than the total for the
domestic market (which includes fares).

Competitors -

Aggressive marketing by low cost airlines and internet booking

agencies present a big challenge for the holiday market. Airlines like British
Airways are offering customers to make their own travel plans through internet.
Travel agents compete in variety of ways i.e. price, quality and the package
itself. Companies offer special discounted packages and also compete on
branding. As there are hundreds of travel agents in the U.K market so, it’s
difficult to specify the competitors in the market. Travel select, Expedia,
Travelocity, E bookers and Thomas cook etc. are the big names in the market
and occupy the bigger part of holiday sales for the U.K customers.

Market –

I can say that market is in a state of perfect competition and no

individual consumer and travel agent is in position to affect the market.

Key success factors for “Simply Travel” are-

* Effectively segmented and targeted adventure travellers market

within the larger travel market.

* Successfully positioned as travel specialists.

* Personal interaction, media and marketing.

* Repetition of customers, Loyalty pool

IMPORTANCE OF PESTLE ANALYASIS -

• First, by making effective use of PEST Analysis, you ensure that what you
are doing is aligned positively with the powerful forces of change that are
affecting our world. By taking advantage of change, you are much more likely
to be successful than if your activities oppose it;

• Second, good use of PEST Analysis helps you avoid taking action that is
doomed to failure from the outset, for reasons beyond your control; and

• Third, PEST is useful when you start operating in a new country or region.
Use of PEST helps you break free of unconscious assumptions, and helps you
quickly adapt to the realities of the new environment.

 The pestle analysis also helps for the study on that relevant topic.

 The pestle analysis also help to the researcher to focus on all the aspects
of the outsiders environments , which effect that given company or
organization.

PESTLE ANALYSIS FRAMEWORK-

Analysis of anything on the basis of the following given terms-

• POLITICAL

• ECONOMICAL

• SOCIAL

• TECHNOLOGICAL

• LEGAL

• ENVIRONMENTAL

{PESTLE ANALYSIS OF TREVEL INDUSTRIES}

 1. POLITICAL FACTORS-

The political factors which affect the travel industries are given bellows-

1. Political has a huge influence upon the regulation of the businesses. It

included government regulation and legal issues under which businesses
should operate.

2. According to the findings the political environment of the UK is quite

stable.

3. In result of growing awareness of the environment, the govt. of the nation

started to target more and more to the travel industries.

4. On the example of the UK govt. of the taxation policies and decision

about the increasing the petrol prices have affected the buying power of the
individual in that country.

5. The political decision as to whether a UK sign up to single European

currency is again having an effected on the business.

6. The factors of the transportation taxes and duties are also a big problem
for the travel industries because the govt. changes in its schemes towards the
travels companies

Political arena has a huge influence upon the regulation of businesses .It
includes government regulations and legal issues under which businesses
should operate. According to the findings, political environment of U.K. is quite
stable. Issues like enlargement of European Union and war against terror have
had an effect on the political stability of the government. In result of growing
awareness of the environmental consequences, U.K Government is planning
actions to ensure aviation reflects its environmental impacts. Proposals are
emerging for a tax on aviation fuel and VAT on air tickets.Government’s
taxation policies and decision about the increasing the petrol prices have
affected the buying power of the individuals in U.K.
The political decision as to whether a UK sign up to single European currency
is again having an effect on the businesses.

STEPS FOR REMOVES POLITICAL IMPACTS-

• Industries should obey all the rules and regulation which are made by the
govt.

• Industry should fulfill all the conditions given by the govt.

• Industries should make the good relations with the political parties.

• Industries should pay all the taxes of the govt.

• Industry should also pay the EXIM policies and taxes.

• They also should participate in all the policies of govt. timely.

2. ECONOMIC FACTORS-

There are some economic factors are also available which effect the travel
industries processes-

1. Economic factors affect the purchasing power of potential customers and

also affect the individual company’s offerings.

2. U.K economy is benefiting from gradual low inflation rate. Inflation rate
Inflation rate fell to 1.3% in February 2004.

3. U.K economy is benefiting from gradual low inflation rate. Inflation rate
Inflation rate fell to 1.3% in February 2004.

4 The downside is that disparities between the welthier parts of the country,
not all in the south east of England, an pockets of deprivation, get wider,
implications for travel demand..
5. Latest predictions for the UK economy suggest that it will remain one of the
strongest economies in the world over the next five years, with low inflation
(inflation fell to 1.3% during February 2004), low unemployment and
reasonable economic growth.

Economic factors affect the purchasing power of potential

customers and also affect the individual company’s offerings. U.K economy is
benefiting from gradual low inflation rate. Inflation rate Inflation rate fell to 1.3%
in February 2004. In U.K, unemployment is low. According to labor market
statistics in January 2004 fell down to 4.8 per cent. Job confidence is high and
because of this confidence spending by consumer is also high. Predictions
point to continuing GDP growth over the period averaging around 2.4% a year
(GDP rose by 0.9% in fourth quarter of 2003), with real household disposable
income rising at a somewhat faster rate. Household expenditures rose to 0.9
per cent with the increase in disposable income. The UK’s deficit on trade in
goods and services in February 2004 stood at £3.2 billion –compared with the
revised deficit for January of £4.4 billion. Continued sales growth has been
observed during the past few months in the UK economy. Exchange rates are
favourable for UK residents for travelling abroad due to strong position of
British Pound against the other foreign countries, is also stable against the
other foreign currencies. Latest predictions for the UK economy suggest that it
will remain one of the strongest economies in the world over the next five
years, with low inflation (inflation fell to 1.3% during February 2004), low
unemployment and reasonable economic growth.

The downside is that disparities between the wealthier parts of the country, not
all in the south east of England, and pockets of deprivation, will get wider, with
implications for travel demand. These are likely to influence the growth of the
UK resident travel market.

STEPS FOR REMOVE ECONOMICS EFFECTS-

• Industries should use the proper use of finance.

• Industries should proper use of finance resources

• Industries should invest the finance in the proper condition and invest the
amount lightly.

• For removing the effects of the economics factors company should also
concentrate on the issuing of the shares and the debentures.

3. SOCIAL FACTORS-

The main social factors which effect the travel industries are given below.-

1. Listening to music or radio is a popular choice among the UK

residents.92% of people content to spend their evenings and weekends
watching TV or hired videos. To socialize, most people think to entertain family
and friends at home rather than going out (79%).

2. Lifestyle changes have also been affecting the U.K travel market for
a number of years. Postponing the start of the family and an increase in the
number of households consisting of couples with two incomes are the main
trends toward the changing life style. Changing fashions, which are difficult to
predict also have an effect on the market.

3. Now the taste and the attraction of the consumer is also totally
changed so it’s inversely effect on the companies.

A trend of getting internet access at home and buying online is developing in

the UK. According to statistics in September 2003, 11.9 million households
online were recorded. Listening to music or radio is a popular choice among
the UK residents.92% of people content to spend their evenings and weekends
watching TV or hired videos. To socialize, most people think to entertain family
and friends at home rather than going out (79%). A great trend has been seen
in U.K population about diet and health issues in the recent years. This trend
leads towards the need of more fitness clubs and organic food for the people
from U.K Changes in the structure of the population because of the immigrants
from Europe, Asia and Africa etc. will also affect the supply and demands of
goods within the U.K economy Continued concerns over safety and security
while travelling are found in the U.K residents. Lifestyle changes have also
been affecting the U.K travel market for a number of years. Postponing the
start of the family and an increase in the number of households consisting of
couples with two incomes are the main trends toward the changing life style.
Changing fashions, which are difficult to predict also have an effect on the
market.

STEPS FOR REMOVING SOCIAL EFFECTS-

• Industries should respect the socials factors.

• Industries should fulfill all the responsibilities toward the society.

• The main Moto of the industry should not the maximization of profit but
also fulfill the public welfare.

• The industries should also thing about the employment and the social
development.

4. TECHNOLOGICALS FACTORS-

The technological factors which affect the travel industries deeply-

1. Distribution of products by the use of technologies e.g.

marketing information systems, customer relationship management are also
common practices with different businesses for effective services to their

2. The rapid development of technology is affecting the

businesses in UK and all over the world. Changes in the technology have
changed the way businesses operate i.e. Internet booking for tickets and
holidays. Faster changing development in technology creates need to react
quickly for different businesses in order they want to maintain the competitive
environment by providing the same innovative services, which their
competitors are offering.

3. Another effect of the tech. on the travel industries are the lake
of technological disadvantage and background. In always in the market there
are many types of the tech. comes which must be accepted by any industry, so
it is also a challenge for the industry.

The rapid development of technology is affecting the

businesses in UK and all over the world. Changes in the technology have
changed the way businesses operate i.e. Internet booking for tickets and
holidays. Faster changing development in technology creates a need to react
quickly for different businesses in order they want to maintain the competitive
environment by providing the same innovative services, which their
competitors are offering. Distribution of products by the use of technologies
e.g. marketing information systems, customer relationship management are
also common practices with different businesses for effective services to their.

STEPS FOR REMOVES THE EFFECTS-

• Capturing all the opportunities of the markets

• Also adopting the technological changes in the environments

• A industry should also changing in the technology in the management as

well as in the production.

• For handle the problems in the technological problems every company

should also adopt the competitors strategies if there is requirement.

5. LEGAL FACTORS-

The legal factors which affect the travel industries are followings-
 The govt. also effect the policies, planning, decision making
and others procedure in the market. In the environment the govt. started many
types of policies e.g. taxation policies, duty charges etc. political factors
changed their policies towards the different sectors like industries, human
being and others elements. Like-

1. Govt. allows the taxation on these industries.

2. Political factors allow the custom duties.

3. The industrial factors always try to makes good relationship with the
every nearest element which changes the policies of them, so they always try
to make good relation with the govt.

STEPS FOR REMOVES THE EFFECTS-

There are many factors which helps the industry in reducing the legal impacts
which are given below-

1. Good relationship with the political party.

2. If a company wants to run in soft manner than it is requires to planning as

flexible process.

3. Next step is to fulfill all the terms and conditions which are made by the
law of that nation.

4. If a company wants to perform well than he should be fulfill the taxes

and the EXIM policies.

6 .ENVIRONMENTALS FACTORS-

The environmental factors which effect the industries in very hardly like-

1. The environmental changes

2. The environmental disasters change the procedure of planning, decision
makings and future expectation.

3. The environmental effects like change in the customers taste change and
the changes in the competitor’s policies.

4. The changes in the outsider’s factors also affect the industries.

5. The another one environmental factor is the face the compition which are
performed under the present time. So, there are many companies which are
performed in the travel market. These industries make the competition with
each others. if there are hard competition than the companies change their
planning and the strategies .so it is also the main problem for the travel
industries.

STEPS FOR REMOVES THE EFFECTS-

1. First step is to perform according to the changing in environment.

2. It is requires to face the environmental practices and changes.

3. The travel industry should be changed with the changes in the market and
also the perform according to the competitors.

4. The next steps are the planning according to the market flow and
according to the taste of the consumer.

5. The industry should also fulfill the social responsibilities of society as well
as the environment.

PESTLE <@> SUCCESS-

If we deeply think about the pestle analysis of the travel industries, we

come to know very well that these factors are not only challenges for the
industry but also create the opportunities in the market .in environment if we
take an example of political factors, we can easily understand the soul that, if
the business organization effect the political parties than that organization
started with the compromising with all these factors. They also worked and
makes the strategies according to the conditions and political schemes.

On the other hand the pestle analysis also

helped into facing the competition strongly as if there are strong defects in front
of the industry than that organization works according and with flow of the
environment. Thus we can say that pestle also help in proceeding on the path
of success

CONCLUSION-

Now in the final discussion we can say that, travel industries have
the strong market shares in all over the world. Present time the customer want
to get better and prefect facilities. And in the market there are several types of
companies which are involved in these programmes and line. So we can says
that travel industries now successful in the satisfying the consumers. If we talk
about the pestle impact on all these industries, this matter impacts in positive
aspect also. It means the all above impacts are not only challenges, they
creates some opportunities and help into facing the competition also.

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