A Pestel Analysis from the Perspective of a European Travel Operator.

A PESTEL analysis from the perspective of a European Travel Operator.

This is an analysis   of the external factors affecting TUI. TUI are a large multinational company in the Travel operator sector. They have the second largest market share at 21%. The PESTEL categorises the environmental factors into the 6 key areas, political, economical, social, technological, environmental and legal. PESTEL helps understand the key drivers of change and external influences on the organisation (Johnson et al., 8th ed.)
Taxation Policies on travel methods by different countries has a large impact on the tourism industry, governments provide some subsidies and tax exemptions in their countries in order to promote the right tourism. Visas into certain countries can also cause people to stop travelling there as corrupt countries can charge large amounts of money to gain them.
Political instability can not only affect the country in which it is but also neighbouring countries. The same also happens when terrorist acts happen on a country or are from a country.
Globalisation of travel companies and airlines has meant that many countries can provide services that they could not before do to cultural knowledge. With companies being global there are also economies of scale to be gained. TUI’s vertical and horizontal integration makes them very competitive and they provide services across all holidaying experiences.
Exchange rates area large part to the amount of tourists travelling from each country. If one countries currency becomes weaker than others it is more likely to become a holiday destination due to a foreseen ‘value for money’. This affects the company less as they have a stronger position than the customer in that they can charge the customer depending on the country with the stronger currency.
The recession has also caused some issues within the industry as there have been some companies that have not been successful. TUI managed to make it...