Swot analysis of travel and tourism industry. The tourism industry is a business of cashing out when people get out of their comfort zone and go out for a picnic to enjoy leisure time. The goal of tourism and traveling is to change the environment of your home, work, and office. It refreshes your mind.
The travel and tourism industry plays a significant role in the growth. The tourism industry comprises of many sub-businesses like;
- Transportation business,
- Hotels & restaurants,
- Lodging, and many other businesses of an economy.
Macau is at the top of the list of the tourism industry which has the highest market share of tourism.
According to an estimate by Statista, the combined contribution of the tourism and travel industry in the Global economy was 2.9 trillion dollars in 2019. The tourism industry single-handedly contributed 580.7 billion dollars to the US economy. However, the annual revenue of the tourism industry reaches in 2023 roundabout 2.29 trillion US dollars across the world.
Today we’ll study the swot analysis of travel and tourism industry. How the internal factors like strengths/weaknesses and external factors like opportunities/threats impact the tourism business? Here’s the swot analysis of travel and tourism industry;
Strengths of the Tourism Industry
The beauty of Diverse Cultures
There are many cultures and lifestyles of people across the world. Every place, culture, and lifestyle has a unique beauty in its way. The interdependent culture of the Indian and subcontinental region, the openness and modernism of Western culture, and the American culture of providing opportunities to everyone are some examples.
The acceptance of integration and allowing other cultures to let are the traits of some of the successful tourist destinations. It gives the impression of openness and willingness to learn new ideas.
Tourist destinations like European countries, the USA, Canada, Australia, Dubai, Abu-Dhabi, Singapore, and many other places. They all have one thing the common acceptance of other cultures. That’s why millions of people visit these places annually.
The transportation system plays very significantly in the growth of the tourism industry. If a country has a proper infrastructure of railways, roads, and airports, then it would connect the whole country internally. The airports would allow a country to connect with the whole world.
The convenience of the transportation system is also important. If people could easily get their rides, then more people would come and experience different places. The difficult transportation system would push away people, and the whole tourism industry wouldn’t work.
Economic growth and progress are the results of the success of the tourism and transport industry. They both industries (tourism & transport) would add a lot of revenue to the country. It would create a lot of job opportunities for local people.
According to an estimate, the tourism and transport industry added 2.9 trillion dollars to the global economy in 2019. They both added approximately 580.7 billion dollars to the US economy alone.
Produce Quality Products
The abovementioned statistics prove the contribution of the tourism and travel industry to the economy. When a country has a lot of resources and a continuous source of income, then it would be in a position to launch mega projects. Like the lavishing hotels and restaurants, airports, bullet trains, and other tech projects that would also generate more sources of income. The cycle of growth and productivity would keep on running.
When many people from across the world visit your country, then they would need a place to stay wherever they’re traveling. It means a lot of hotels and restaurants. Many successful tourist countries have got chains of hotels and restaurants. They provide a comfortable place to stay for tourists and visitors. Resultantly, it also creates employment opportunities for the residents and provides more taxes to the local government.
Safe & Secure Environment
Collective events and the gathering of a lot of people at different places in a certain country send the message of safety and security. A safe environment provides any tourist destination with a solid basis to attract more people. It’s because people don’t want to visit any conflicted country by risking their life.
Festival & Fairs
Every culture across the world is unique and beautiful in its way. They provide a unique experience to their visitors. For instance, the festivities of the Indian tribe in the US, the Holi and Diwali festival in India, the Chinese new year calendar and its festivities, the Spanish wild bull race in the streets, and many other cultures across the world.
The historical and archeological places from the world attract history-loving people towards it. For instance, the ruins of ancient Rome and Greek, Egyptian pyramids, the Great China Wall, the Himalayas Mountain range, Mount Everest, the Grand Canyon in the US, and many other places across the world. Such places contain a mystery in them and people visit those places over and over to understand and solve the mystery.
Weaknesses of the Tourism Industry
Outdated Marketing Strategies
As we know that the tourism and travel industry comprises many sub-businesses, and they follow conventional and outdated marketing strategies. Like billboards, advertisements on TV, newspaper, journals, and referrals, they’re good but they have a limited scope. They won’t help you to attract an international audience.
Unlike the long-term workforce of other professions and businesses, the workforce in the hospitality industry is seasonal. Many sub-businesses of the hospitality industry like hotels and restaurants, transportation, lodging, attraction, and others, keep on changing their employees. An inconsistent workforce reduces the quality of the customer service experience.
The turnover rate in the hospitality industry is very high. It’s because of work pressure, low salaries, long working hours, and other factors that push employees to quit their jobs. Many businesses and companies don’t care about the employees’ satisfaction. They quit their jobs to find satisfaction at some other place.
Not Quality Service
The quality service level drops during the season when many people visit a certain spot. Many customers experienced low-quality service during the season. Traveling agencies and tourism planners don’t provide the required service that they advertised. Such experiences are bad for the whole tourism business.
No Innovation & Creativity
The only progress and development we see in the tourism and travel industry are that the sub-businesses are using the latest tech tools. Other than that we haven’t seen or experienced any new things. The lack of innovation and creativity in the service industry isn’t good for the business.
No Proper Management Skill
The management of the tourism and travel industry would require bringing different sub-businesses on the same page. They should work together collectively towards the common goal of the growth of the whole industry.
It’s easier said than done. Because different businesses have different interests and rivalries, and they won’t like the idea of disclosing their trade secrets. It would happen once they start collaborating.
Opportunities available to Tourism Industry
Online & Social Media Marketing
Social media marketing and digital marketing are the most successful strategies nowadays. They allow businesses to select their target audience and market them accordingly. If you’re able to select the right audience and plan the right message, then you increase the probability of success rate.
The reason people postpone their traveling plans is that tourism is very expensive. If a group of sub-businesses like transport, lodging, and hotels work together and offer quality service at an economic price. It would attract a lot of new tourists. Many other businesses would follow the same pattern.
Many businesses in the tourism and travel industry use disposable products. The one-time use of products and items may be good, but it increases waste. That’s why many eco-friendly tourists plan their tours without involving businesses because they pollute the environment. If businesses in the tourism and travel industry offer eco-friendly products/services, it would be good for the business.
New Items in Menu
Businesses and agencies should add new items to the menu. It could be anything new, like an eco-friendly product/service, or something unique. Anything unique would provide your business with a competitive edge.
If you invest your resources and capital in the establishment of an unusual place, it would pay off. But it would require a lot of capital and a great plan to build an unusual place. In other words, an unusual visionary person could only pull it off.
Personalized Service Approach
The market has become very competitive in every category of business. The only way businesses are succeeding is by focusing on a certain category and offering personalized services. If the sub-businesses in the tourism and travel industry provide personalized by keeping in mind the needs and wants of customers. It would add a magical experience.
Threats Tourism Industry has to face
Visa restriction is a serious hurdle in the way of the tourism and travel industry. Many potential customers can’t visit certain countries because of the strict immigration and visa policies of the government. As a result, local businesses don’t get enough visitors to make it to the required sales. la
The tourism and travel industry has become very competitive in recent years. A limited amount of capital is required to start any small business. Those small businesses usually provide quality personalized service. Other small businesses jump into the market and make the whole industry crowded with competition.
No Institute for Tourism
Some universities in developed countries offer courses in the tourism industry. But under-developed countries don’t have such luxury. That’s why we don’t see professionalism in this business. People only learn from their real-life experiences by making mistakes at the cost of losing customers.
Starting any sub-business in the tourism and travel industry requires a huge amount of capital. If you manage to pull it off, there are other costs like maintenance, repair, employees’ salaries, marketing, and advertisement. These carrying costs in the off-season could bankrupt any new business.
The trends of use-it and throw-away in the tourism industry and carbon emissions in the travel industry are serious issues. They both are polluting the environment collectively. The sub-businesses in the tourism industry are following the same old pattern of throwing away. Customers are becoming conscious about the environment and they don’t the current pattern of the tourism industry.
The pandemic crisis has been a serious threat to the tourism and travel industry. The shutdown of hotels and restaurants because of the worldwide lockdown and the ban on air travel cost billions of dollars of loss to the industry. Many people lost their jobs because of it, and many small businesses went bankrupt. The real statistics of the post-pandemic recession are yet to come.
Conclusion: Travel and Tourism Industry SWOT Analysis
After an in-depth study of the swot analysis of travel and tourism industry, we have concluded the business is indeed very proliferating. But the pandemic crisis has shut down everything and created an environment of uncertainty.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.