The Business of Travel and Tourism

The Public Sector
The public sector consists of regulatory bodies, conservation groups and public sector organisation which are funded by local, regional and central government, . A good example of a localy funded organisation would be Dover’s local tourist information centre, controlled and funded by Dover District Council and council tax revenues. The tourist information centre is there to provide information about the local area such as attractions and events to tourists. This would be of interest to domestic and inbound tourists. An example of a regionaly funded organisation is visitkent.com, a website controlled and funded by kent county council, providing information on things to do and places to visit in kent. This would be of interest to domestic and inbound tourists.

An example of an organisation which is funded and controlled by central government would be the Department for Culture Media and Sport, a national organisation responsible for supporting the growth of creative industries, organising events such as the 2012 London Olympic games and promoting all the cultural and artistic things Britain has to offer both historic and contemporary. The DCMS is funded by Britains tax revenues, with support from public bodies. The DCMS is involved with in bound and domestic tourism. English Herritage is one of Britains largest conservation groups and is funded through membership fees, donations and bequests. They are responsible for conserving and restoring sites of historic importance in Britain. English Herritage is owned by its members and controlled by a board of trustees, although all members are entitled to share their views and have the right to vote on important decisions at the anual members meeting.

The Private Sector
The private sector is defined as any organisation funded through private investment. Most travel and tourism organisations exist within the private sector. There are different options available when setting up a private sector company. Easy Jet PLC are a international organisation, offering quality, budget air travel to many destinations. Easy Jet exist within the private sector as a public limited company (PLC) which means they are funded by private investment through the sale of stock and their shares are sold openly on the stock market and are available to anyone. The company is owned by the shareholders, with each share representing a small stake in the business, the percentage of the business owned by a person is determined by the amount of shares they hold. Decision making responisbilities ultimately lie with a board of directors, although they are answerable to their shareholders, who have the right to vote on important decisions at the anual shareholders meeting. Profits are distributed as dividends to shareholders, with each share worth a certain amount.

Because they are a limited company, their sharehoulders benefit from limited liability which means, should the company find itself in financial difficulty, investors are only liable for the amount they have invested. As an airline with international routes and routes between UK destinations, Easy Jet are responsible for in bound, out bound and domestic tourism. Virgin Atlantic LTD are a global organisation and a leading airline operating flights across the world. Virgin Atlantic LTD also exist within the private sector, but operate as a private limited company which means they are also funded by the sale of shares but their shares are not freely available and investors must be invited to buy stock. The company is also owned by the shareholders, with decision making responsibilities ultimately down to a board of directors and profits distributed as dividends to shareholders. As a limited company, investors also benefit from limited liability. As an international airline, Virgin Atlantic are responsible for in bound and out bound tourism. An alternative option for business set up is a partnership, where two or more partners share responsibilities and profit. A good example of this would be a small bed and breakfast owned and run by a husband and wife. As a partnership, all partners have a percentage of desicion making rights relevent to their stake in the business, with profits being distributed as an income to all partners, the percentage each partner recieves is set out in the partnership agreement.

The business is owned by the partners, each has a stake, which will also be set out in the partnership agreement, relevent to the investment they have made. This is a simple way to set up a business with minimal paper work involved although with desicion making shared between partners, who are often close friends or relatives, disputes and disagreements can be a problem. As a partnership is not a limited company, it does not benefit from limited liability so all partners are responsible for any and all debt incurred. Another similar concept is an LLP or limited liability partnership which has the same attributes as a partnership but with the added security of limited liability meaning partners are only responsible for the amount they have invested. A sole trader refers to a self employed person who has sole ownership of a bussiness, and so, assumes all responsibility with decision making and keeps all profits. A good example of this would be a self employed tour operator, offering local city tours in London to in bound and domestic tourists. This is a fairly simple way to run a business with minimal paperwork involved with setting up, and with all decision making down to the sole trader this option gives much independence.

As a sole trader is not a limited company, they do not benefit from limited liability and so they are responsible for any and all debt incurred. Limited Liability insurance? Another option when setting up a private sector company is to buy a Franchise. Franchises are usually major market brands such as Mcdonald and Costa coffee. When buying a franchise, you are buying the rights to operate under a corporate name, and benefit from assistance and advice from your franchisor. Buying a franchise is not the most independent way to run a business as you must trade under certain rules set out by the company. For instance, you buy a Mcdonalds franchise, you may only sell products approved by mcdonalds, your property will be decorated and stocked by mcdonalds and you must trade in a manner which reflects the brand standard. As a franchisee, you pay a premium to the franchisor and a percentage of any revnue earned. The Economic Impact of Travel and Tourism

GDP or gross domestic profit, denotes the value of goods and services produced by an economy and indicates the wealth and development of a country. The GDP can be broken down into different industries, with each industry accounting for a percentage, dependent on the revenues they create. The travel and tourism industry has a major impact on both the UK and international economy. With 1 in 11 jobs world wide supported by travel and tourism, the industry accounts for 9% of the worlds gross domestic profit. Globaly, compared with other industries travel and tourism is worth:

In the UK the travel and tourism industry sustains 3.1 million jobs, thats 9.6% of all employment nationwide and in the UK the industry in currently worth 127 billion pounds. In 2013, 21 billion pounds was spend by international tourists visiting the UK, making travel and tourism a major contributor to the UK economy. In 2013 the UK’s GDP was 2.521 trillion US Dollars, with travel and tourism accounting for 9% of that.