Marketing

In assessing the strategic positioning of the UK tourism industry, the PEST analysis will be used to examine the environment surrounding the industry. The PEST analysis considers the political, economic, social and technological factors that may affect the way in which the tourism industry operates. Following the PEST analysis, the strategic challenges facing the UK tourism industry are stated given the constraints identified from the PEST analysis. As a result of these strategic challenges and the macro-environmental context, some strategic options are presented and discussed.

Political Factors

* The desire to increase government revenues by increasing taxes on tourists may make it more challenging for companies in the tourism industry to attract inbound tourists to the UK. The Chancellor of the Exchequer had announced in 2011 that there were plans to increase the air passenger duty (APD) tax in the UK by an extra 10% which could discourage both outbound and inbound tourists from and to the UK (The Daily Telegraph, 2011). In addition to the APD, some cities such as York have been considering hotel taxes which will levy an extra charge on tourists who stay in hotels in those cities (Wainwright, 2012). These tax measures may make it particularly challenging for companies in the tourism industry to attract inbound tourists since they may instead be tempted to visit other countries without these taxes.

* The British government has taken measures to reduce the incidence of excessive overcharging on airline passengers. The government planned to ban excessive surcharges on all payment methods including credit and debit cards in 2011 although the legislation has not yet passed. In addition, the Civil Aviation Authority (CAA) has launched a passenger resource including a summary of optional charges levied by airlines in the UK to assist passengers in performing more accurate price comparisons (Smithers, 2012).

* Since the economic crisis has led to...