TOURISM AND HOSPITALITY BUSINESS MANAGEMENT Name Inese VaitkaiteUnit aim The aim of this unit is to develop learners’ understanding of the main internal and external factors that influence businesses in the tourism and hospitality industry

Name Inese VaitkaiteUnit aim The aim of this unit is to develop learners’ understanding of the main internal and external factors that influence businesses in the tourism and hospitality industry. Learners will understand how to analyze the micro and macro environments in order to influence management decisions. Learners will apply tools to gain information relating to the tourism and hospitality business environment.

Word count 2500
Date 5th October 2018
Tourism and Hospitality Business Management
S. No.Description Page No
Public Sector
The role of the Public Sector
The characteristics of Public Sector organizations
Factors influencing the Public Sector organizations
Private Sector
The role of the Private Sector
The characteristics of Private Sector organizations
The role of entrepreneurship in Tourism and Hospitality businesses

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Macro Environment
Key factors influencing Macro Environment in Tourism and Hospitality
PESTEL analysis
Micro Environment
Key factors influencing Micro Environment in Tourism and Hospitality
4.2 SWOT analysis

1. Public Sector
The Public Sector in the tourism and hospitality industry is an organization which provides services and goods by and for the government and its citizens. Public sector organizations are funded by the national and local government (e.g. Museums, Visitor Information Centers, Parks, National Gallery and Regional Development Organizations). Government regulates the tourism sector through the Ministry of Tourism or National Tourist Organizations (NTO), and indirectly through appropriate leverage, support for its infrastructure and international policy. The state influences tourism in two ways: manage demand and income or manage and price.

The Role of Public Sector
In tourism and hospitality public sectors play an essential role making more aware of publicity with the business environment. The purpose of the public sector is to educate, advise and offer services to its customers. In general the state admits that the duties of the public sector must cover such matters as:
Fair trading
Consumer interests
Financial support
Infrastructure in transport (roads, railways, ports)
The Characteristics of Public Sector organizations
Public sector travel and tourism organizations in the UK occur at several different levels: 
Government-controlled – National and Regional Tourist Boards get funding from central government, e.g. VisitBritain. 
Local government-controlled- Most local councils have a department or members of staff involved with advancement and expanding tourism, e.g. Birmingham city council, Torbay Council in Devon, Pembroke-shire County council and Belfast city council.

Membership organizations- get funding from the public money, but also raise income through membership subscriptions.
Factors influencing the Public Sector organizations
Economic. In relation to economic impacts the following are usually considered to be positive effects:
Contribution to foreign exchange earnings;
Contribution to government revenues;
Generation of employment;
Contribution to regional development.

Negative consequences:
Opportunity costs;
Over-dependence on tourism.

Environment. The natural treats can negatively impact on visitors decrease such as pollution, natural disasters, seasonal pressure and depletion of natural resources as well. Otherwise, tourist places situated closely to rivers, beaches, mountains, forests or other ecosystems can major attracts plenty of tourists.

Social. The Social factors refer to emerging factors, such as the changing face of consumer behavior in tourism like destination preferences, quality expectations, popularity of object, booking behavior, traditions, gastronomy, shopping, leisure activities etc.

2. Private sector
The Private sector in Tourism and Hospitality is an organization which is owned by individuals, either as sole traders, partnership or limited companies. It plays an urgent role in both economic and urban development as most of the organizations in the travel and tourism industry is owned and operated in the private sector (e.g. Airbnb, British Airways, Four Seasons Hotels and Resorts etc.)
2.1 The role of the Private Sector
Private companies and organizations deliver goods and services to the customer with the direction of making benefit for the owners and shareholders of the private enterprise. The following areas show the main aspects:
Supporting all tourist interest subjects
Building and assuring everything under industry standards
Associating the local community in tourism projects and securing that the benefits of tourism accumulate to them in right measure
Undertaking industry training and manpower development for gaining excellence in quality of services
Taking a part in the preparation of investment guidelines and marketing strategies and assisting in database creation and research
Facilitating safety and security of tourists
Ensuring preservation and protection of tourist attractions
2.2 The Characteristics of Private Sector organizations
Public limited company (PLC): a company registered under the Companies Act (1980), with lawful minimum capital requirements and shares offered to the public subject to conditions of restricted obligation.

Private limited company (LTD): an economic company established by one or several individuals, the constituent capital of which is divided into the proportions of the sizes specified in the constituent documents and the number of participants is limited by the Law on Limited Liability Companies.

Limited liability partnership (LLP): a partnership, where each member who is responsible for the obligations of the firm with his property regardless of the size of the unit. Full partnerships are mainly distributed among companies that provide legal, accounting and other services.

Sole proprietor: is a company owned by one person who is fully responsible for the results of its activities and is entitled to receive all profits.

Franchise: an object of the franchise agreement, a set of benefits, consisting of the rights to use the brand and business model of the franchisor, as well as other benefits needed to create and conduct business.

2.3 The role of entrepreneurship in Tourism and Hospitality businesses
Entrepreneurship in restaurant and foodservice suggests an interest in starting, owning, and operating a profitable independent or franchised operation. Entrepreneurship covers the full range of the restaurant business including, but not limited to:
Conducting analyses
Understanding entrepreneurial potential
Financial planning, borrowing, and control
Location and property analysis
Ownership and management
References and tourism (2005) 1st edition by Christine King, and Gillian Dale (p.74, 87)