A Travel Agency is a private or public service-providing business entity that provides travel, tourism, and transport services to the public, travelers, hosts, and guests. The travel agency offers services luggage and logistics arrangements, rental cars, timetables, outdoor recreation, and other services to the customers. However, the Travel Agency acts as a travel agent working for the airlines to provide travel services to the customers. Today, we’ll discuss the PESTLE analysis of Travel Agency; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Travel Agency
Some of the main political factors in the Travel Agency PESTLE analysis are as follows;
I-Government Travel Regulations
The travel and public safety government regulations are very strict in different countries. They comprise of travel, transport, health, and safety of travelers, guests, and tourists. However, the Travel Agencies should make sure to comply with the travel and transport safety government regulations of different countries.
II-Travel and Tourism Policies
Western and developed countries have a very open travel and tourism policy for the growth of their travel, transport, and hospitality sector businesses. They welcome travelers, guests, and tourists from other developed countries. However, countries have different policies when it comes to travelers coming from third-world countries; because they come for work and employment in the disguise of tourism.
III-Political Stability
The stable political environment of the country plays a crucial role in the growth of businesses and companies. When there are roadblocks, violent protests, processions, political conflicts, and turmoil, then travelers and tourists change their plans of visiting the politically unstable country. However, it is due to the fact that security risk is higher in the politically unstable country.
Economic Factors Affecting Travel Agency
Some of the main economic factors in the Travel Agency PESTLE analysis are as follows;
I-Economic Recession
The global economy has been going through an economic recession for the past few years. It is due to the roadblocks, lockdowns of businesses, social distancing protocols, and other regulatory requirements. They have made it difficult for Travel Agencies and tourism companies to maintain their sale, revenue, and profitability in the presence of restrictions and bans.
II-Fuel Prices
The fuel price market is highly unstable and it has been increasing for the past few years. It directly impacts the sales, revenue, and business operations of the Travel Agency. For instance, a small increase in fuel price would increase the transportation, accommodation, food, logistics, service, and labor costs for businesses and companies.
III-Currency Exchange Rate
The currency exchange market is highly volatile and it keeps fluctuating depending on various economic, financial, and political factors. A small change in currency exchange rate would negatively impact the cost and expenses of tourism products and services, ultimately impacting the sales and revenue of Travel Agencies.
Social Factors Impacting Travel Agency
Some of the main social factors in the Travel Agency PESTEL analysis are as follows;
I-Travel and Tourism Trend
The travel and tourism trend has been increasing significantly for the past few years. It is due to the fact that people have higher disposable income, and they want to travel the world, explore new places and countries, and increase their experiences by traveling and tourism. However, traveling and tourism are a great method of increasing your horizon, world view, and learning.
II-Demographic Shift
Millennials and Generation-Z are becoming the majority demographic of the population and their mindset is greatly influenced and impacted by social media trends. They have a mindset of showing off, and they want to experience the new places, cultures, and customs of the world by visiting there. As a result, it amplifies the growth and success of Travel Agency businesses and companies.
III-Health and Safety Factors
Health and safety are the main factors and tourists make and break their decisions based on their health and safety concerns. Travel Agencies should make sure and double-check the health and safety of the tourism country, traveling route, and the end destination. The objective is to ensure the health and safety of tourists, travelers, and guests and make their traveling experience comfortable, luxurious, and memorable.
Technological Factors Affecting Travel Agency
Some of the main technological factors in the Travel Agency PESTEL analysis are as follows;
I-Comfortable Transport
Travel Agencies collaborate and coordinate with such transport companies that have an upgraded and latest vehicle fleet size. The latest and upgraded vehicles would ensure the safety and comfort level of travelers and tourists. However, transport companies invest a significant amount of capital resources in their technological development to make their automobiles safe, secure, and comfortable.
II-Internet Accessibility
Internet accessibility has become a basic need of travelers and tourists because it allows them to connect and engage with their friends, family, and loved ones. Travel Agencies should make sure that the hotels, restaurants, vehicles, and end destinations have internet connectivity and accessibility. Well-developed internet infrastructure further improves the traveling and tourism experiences of travelers.
III-Advanced Technology
Travel Agencies employ the latest and advanced technology like AI, ML, new systems and software, and data analytics. It allows them to easily connect and engage with the targeted customer market, promotes various types of travel packages, and offers them customized and personalized traveling services.
Legal Factors Impacting Travel Agency
Some of the main legal factors in the Travel Agency PESTEL analysis are as follows;
Regulatory Compliance
Travel agencies should comply with the health, safety, travel, and transport regulations of different countries. They comprise of travel and transport safety, vehicle maintenance, full disclosure, and other regulatory requirements to ensure the safety and security of passengers. Regulatory compliance would help them to smoothly perform their operations without any disruption and delays.
Environmental Factors Affecting Travel Agency
Some of the main environmental factors in the Travel Agency PESTEL analysis are as follows;
Sustainability Initiative
Travel Agencies need to make a strong commitment to environmental sustainability. They should take eco-friendly and sustainability initiatives like biodegradable packaging, fuel efficiency, recyclable material, organic food, and renewable sources of energy. Environmental sustainability initiatives allow the company to keep up with the growing eco-friendly trends.
Conclusion: Travel Agency PESTLE Analysis |PESTEL Analysis of Travel Agency |External Environmental Analysis of Travel Agency | Strategic Analysis of Travel Agency
After an in-depth study of the pestle analysis of Travel Agency; we have realized that Travel Agency plays a key role in the hospitality and tourism industry. If you are learning about the Travel Agency PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
