The Effect of Economic Crisis in the Tourism Industry
Introduction
Economic crisis is the main language of the business leaders that competes in the globalization arena. Alongside with the growing popularity of the technological innovation is the impact of the economic crisis in every side of the various industries. Aside from the traditional concerns and challenges that a firm is facing, the economic crisis is another burden that the leaders should carry on their shoulders. In tourism, the significant contribution of the economic crisis in assessing the performance and leadership styles of the propellers is considered. However, the effects of the economic crisis in the tourism industry are the main concern of the business leaders.
Tourism in the Midst of the Crisis
In delivering the quality type of service in the institution is the most basic attribute of the business that the customers expected. In the presence of crisis, it is natural that this important aspect of the business is affected because of the weak budget, idea of cost cutting, and layoffs. Tourism is not an exception in this typical crisis. As an industry that includes the foreign exchanges, it is obvious that the rate and/or value of the currency are important. The particular strategy of the hospitality businesses such as the airlines needs the planning and new regulation of their industry. Due to the different economic uncertainties, the significant adjustments are emerging in the industry to deliver the social services. In addition, the damages may also appear in the tourism businesses that made it more impossible to recover in the middle of the crisis. The economic pressures within and outside the country creates different perspective on the tourists and other potential visitors and in return, may cause to the diminishing rate of the tourist visits. In the midst of the economic crisis, the airlines views the potential challenges that might aggravate the other existing challenges within the business such as the lack of the facilities and other services.
Challenges and Stress
The business leaders believe that the rising number of the challenges in the current situation may heighten the pressure and create the stress in the entire organization. This domino effect is visible in the industry that absorbed the impact of the economic crisis. The first challenge that the tourism recognize is the relative budget cuts of the organizational results to the reduction of the managerial capacity of the business to perform in the industry. Second, the pressures they receive from the environment such as the land area of the tourist attraction or the damages that appeared on the land may lessen the appreciation or satisfaction of the tourist that relatively affecting the personal factors to return. In addition, the exploitation of the natural resources is also part of the overall environmental impact.
Economic Crisis on AEA
The Association of European Airlines recognized and felt the impact of the worst position of the tourism industry in the global economy. The association determines the connection of the financial crisis to the economic crisis. In this scenario, when the financial crisis hits the country and became a threat in the financial industry, then the next impact will be felt due to the economic crisis. This sequential analysis draws the declination of the quality performance in every business in the tourism activity.
The effects of the crisis is felt in the flow of the market or also called the market crisis. This simply implies the thought that the travelers would place the limits on their flying activities and worst is stop flying or travelling. In other case, this might turn to the lessening of the services being offered while many employees felt the peril in losing their jobs. The AEA concluded that the business effect of the crisis is barely catastrophic for they are losing too much while they are trying to bring back the loyalty of the passengers. The effects are very evidential based on their records of the number of passengers. In addition, there are fewer businessmen are travelling and when they decided to travel, they will turn to the no frill products. The economic crisis is becoming worse because the business leaders have no idea on when or how the business will recover again.
Conclusion
The airlines should place another thrust of effort to at least reduce the impact of the crisis in their business. The network business model being utilized by the airlines in their operation serves as the backbone of the aviation and the tourism industry. The airline industry should establish the mobility and benefits for the customer as the new means of transportation.
Works Cited:
Association of European Airlines [Online] Available at: http://files.aea.be/Speeches/MEP_Speech30Sept09.pdf [Accessed 23 Feb 2010].
Annex: Case Studies of Panda Organization [Online] Available at: http://assets.panda.org/downloads/ppe2.pdf [Accessed 23 Feb 2010].
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