In the modern business environment, travel and tourism sector is growing at a fast pace. It is one of the most potential sectors across the world (Giaoutzi and Nijkamp, 2013). There is presence of various factors that affect country's travel and tourism sector. In the present study, implications of political changes on tourism of Tibet and Cuba have been discussed.
Q.1 Way in which economic policy can positively affect the country's travel and tourism sector
Travel and tourism business has generated large number of jobs for the global economy. Growth of travel and tourism business is fast besides the challenges that are being faced by the sector. This industry is continuously outperforming in the global environment. There is a positive impact of economic policy on travel and tourism sector of country that is in terms of increasing number of people who can work in this sector. Further, the living standard of people residing can also be increased to a significant level (Chen and Choi, 2008). The economic policies deal with taxation policies that assist in regulation of the flow of funds as well as in the purchasing power of individuals. However, such policies have a direct and indirect impact on the tourism sector. The taxation policy helps domestic industry in the development of sources of funds. Therefore, it acts as an aid in developing the country as well as its services. Airport taxes support in the creation of high impact on funding of domestic services. This acts as an aid for the country in management of funds for the development of airport services. It highly affects the travel and tourism sector. Along with that, service tax on hospitality and food services results in the creation of indirect source of fund for the nation. Thus, it creates a favorable impact on the development of income within country. For instance if the government of nation has allocated larger funds in development of travel and tourism due to enhanced economic condition then it shows positive influence on travel and tourism sector. Apart from this, economic policy involves full employment and through presence of policies associated with the same it is possible for the entire sector to hire skilled and knowledgeable workforce. Through this entire sector can easily carry out the major operations. For example in case if policy regarding price stability has been introduced with the motive to control situations such as inflation or deflation. So, travel and tourism companies have to control prices through which they are able to manage overall performance in the market.
Q 2. Implications of political changes on travel and tourism sector on each country
Implication so political changes on travel and tourism sector of Tibet and Cuba is explained like:
Tibet: Political changes result in the reformation of policies and procedures in economy. Government of Tibet has altered the policies relating with travel and tourism at present. This has developed higher prospects for the growth in nation. Policy of liberalization has assisted Tibet in creation of suitable development aspect in the nation. Country possesses higher cultural and heritage value which is the main source of earning for tourism sector that ultimately contributes to the economy of nation. Therefore, it has assisted the nation in development and reforming to the whole. China has developed its tourism sector in a manner that it has become the major source of income. Changes within policy have assisted in the domestic development of industry. The source of income, disposable income as well as employment rate is offering assistance to the nation. The Tibet travel permit situation changes on continuous basis which totally relies on the political situation in Tibet. Further, many regulations have been developed by government such the new travel regulations which are implemented on tourist vehicles which is so called Tibet transportation Co-Op backed by the communist government. Further, group travel in Tibet is not required where solo travelers are allowed to travel to Tibet.
Cuba: In the present era, protest against the political parties has resulted in creating huge amount of loss for the tourism funds. Political instability in country leads to decrease in the number of tourists. Major reason behind such is the political unrest that exerts pressure on the people to think several times prior to visiting a specific destination. This affects the travel and tourism sector of nation that is Cuba. Along with this, it also reduces the amount of profitability that is earned by the particular industry. The policy of engagement contemplates political change within the nation. Further, the overall changing policy of US has propelled Cuba into growth industry. Apart from this, the laws which are associated with tourism involve no sailing on tourist board, no public demonstration is allowed, lack of investment opportunities in small and medium sized enterprises.
1. Tourism demand
Under geographic perspective, tourism demand can be defined as the total number of individuals who are willing to travel or are traveling and making use of facilities and services of the destination which implies the place that is away from the local area where they work or live.
2. Identification of factors that affect tourism demand
There is presence of several factors that affects the demand for travel and tourism industry. These have been enumerated in the manner stated as under:
- Technology: It is the most significant factor for tourism business to possess technological advancements which they are required to update on regular interval of time (Korstanje and George, 2012). For instance, if tourism business in UK makes use of more advanced technology towards maintenance of effective communication then it results in increasing awareness among number of people with respect to the facilities offered by tourism sector in UK.
- Political stability: It is being viewed that number of tourists are affected by the political stability that is maintained within country (Bunja, 2003). Large number of tourists is attracted in nation where political environment is healthy and stable. In situation if political parties are not stable then it can create disturbance in the economy and would not be beneficial for travelers and tourists. For instance in case if political laws in Cuba and Tibet are stable which allows travelers to access tourism services on continuous basis then in such case overall demand for services will increase and this in turn can act as development tool for the destinations.
- Disposable income: This can be referred as the income that is left with an individual after making all expenses and paying tax on several commodities. There is high impact of disposable income on the demand of travel and tourism sector. For instance if people living in the society are having high disposable income then in such case they will prefer to visit different places such as Cuba etc on continuous basis. In short, high purchasing power can allow to access tourism services on continuous basis and this can be beneficial for countries which are mainly tourist destinations.
3. Detailed explanation of two factors influencing the tourism demand
The two factors that would be explained in detail have been enumerated in the manner stated as under:
Disposable income: Disposable income plays a crucial role in affecting the demand for tourism sector as people travel for the purpose of vacation and to spend leisure time only when they have good amount of disposable income in their hands. In case if the disposable income is high then individuals intend to make greater amount of investment in travel and tourism sector (Bernick and Boo, 2013). In contrast to this, in case if disposable income is lower there then there will be an adverse impact on travel and tourism sector.
Technology: Technological advancement has changed the manner of look in travel and tourism sector (Lashley, 2007). Organizations that are operating in tourism industry make effective utilization of several portals as well as online websites in order to increase their demand in the market to a significant level.
It can be concluded from the study that role of travel and tourism sector is increasing significantly. Factors like technological advancement and disposable income prove to be highly influential for the demand this industry. There is presence of several political changes within nations like Tibet and Cuba which is having huge impact on the travel and tourism sector.
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