TPPAD Topic 2

several analytical tools

There are _____ that can help a destination understand where it is, what options it has in respect of the development of its tourism sector, and how best to focus its product development and marketing strategies.

1. Strength, Weaknesses, Opportunities and Threats (SWOT) Analysis

2. Political, Economic, Social, Technological, Legal and Environmental (PESTLE) Analysis

Situational Analysis Tools

SWOT ANALYSIS

helps identify the present market position and identify opportunities.

Strengths

Characteristics of a business which give it advantages over its competitors.

Weaknesses

Characteristics of a business which make it disadvantageous relative to competitors.

Opportunities

Elements in a company’s external environment that allow it to formulate and implement strategies to increase profitability.

Threats:

Elements in the external environment that could endanger the integrity and profitability of the business.

PESTLE Analysis

is an acronym for a tool used to identify the macro (external) forces facing an organization.

Political, Economic, Social, Technological, Legal, and Environmental.

PESTLE Stands for

conduct a situational analysis.

In marketing, before any kind of strategy or tactical plan can be implemented, it is fundamental to ______

identify changes in the macro-environment

the PESTLE forms part of that and should be repeated at regular stages to ______

macro-environment

Organizations that successfully monitor and respond to changes in the __________ are able to differentiate from the competition and create a competitive advantage.

Political Factors

These determine the extent to which government and government policy may impact an organization or a specific industry. This would include political policy and stability as well as trade, fiscal, and taxation policies.

Economic Factors

These factors impact the economy and its performance, which in turn directly impacts the organization and its profitability.

interest rates, employment or unemployment rates, raw material costs, and foreign exchange rates.

Economic Factors include

Social Factors

These factors focus on the social environment and identify emerging trends. This helps a marketer to further understand their customers’ needs and wants.

changing family demographics, education levels, cultural trends, attitude changes, and changes in lifestyles.

Social Factors include

Technological Factors

 These factors consider the rate of technological innovation and development that could affect a market or industry.

changes in digital or mobile technology, automation, research and development.

Technological Factors could include

new methods of distribution, manufacturing, and logistics

There is often a tendency to focus on developments only in digital technology, but consideration must also be given to _________.

Legal Factors

An organization must understand what is legal and allowed within the territories they operate in. They also must be aware of any changes in legislation and the impact this may have on business operations.

employment legislation, consumer law, health and safety, international as well as trade regulation and restrictions

Legal Factors include

Environmental Factors

These factors relate to the influence of the surrounding environment and the impact of ecological aspects. With the rise in importance of CSR (Corporate Sustainability Responsibility), this element is becoming more important.

climate, recycling procedures, carbon footprint, waste disposal, and sustainability.

Environmental Factors include

Political

PESTEL
Government policy

Political

PESTEL

Political stability

Political

PESTEL
Corruption

Political

PESTEL

Foreign trade policy

Political

PESTEL
Tax policy

Political

PESTEL
Labour law

Political

PESTEL

Trade restrictions

Economic

• Economic growth

• Exchange rates

• Interest rates

• Inflation rates

• Disposable income

• Unemployment rates

Social

• Population growth rate

• Age distribution

• Career attitudes

• Safety emphasis

• Health consciousness

• Lifestyle attitudes

• Cultural barriers

Technological

• Technology incentives

• Level of innovation

• Automation

• R&D activity

• Technological change

• Technological awareness

Environmental

• Weather

• Climate

• Environmental policies

• Climate change

Environmental

PESTEL
Pressures from NGOs

Legal

• Discrimination laws

• Antitrust laws

• Employment laws

• Consumer protection laws

• Copyright and patent laws

• Health and safety laws

IMPACT

A powerful effect that something, especially something new, has on a situation or person. (Cambridge Dictionary)

IMPACT

The Force of impression of one thing on another; a significant or major effect. (Merriam-Webster)

1. Provides employment opportunities

2. Contribute to government revenues – can help to raise money to invest elsewhere by the Government.

3. Spreads development – Money spent on improving facilities and infrastructure for the services.

4. Generates foreign exchange – Increased foreign exchange results in an increased interest in tourists to venture abroad, in expenditure and affects the length of stay.

POSITIVE ECONOMIC IMPACT OF TOURISM

1. Inflation Rate – Increase in costs of goods and services.

2. Leakage – It is when money earned within the locality is brought out and spent elsewhere.

3. Seasonality of Jobs

4. Unbalanced Economic Development

5. Over-dependence on tourism

NEGATIVE ECONOMIC IMPACT OF TOURISM

Contribute to government revenues (positive economic impact)

can help to raise money to invest elsewhere by the Government.

Spreads development (Positive Economic Impact)

Money spent on improving facilities and infrastructure for the services.

Generates foreign exchange (Positive Economic Impact)

Increased foreign exchange results in an increased interest in tourists to venture abroad, in expenditure and affects the length of stay.

Inflation Rate (Negative Economic Impact)

Increase in costs of goods and services.

Leakage (Negative Economic Impact)

It is when money earned within the locality is brought out and spent elsewhere.

Seasonal work

temporary employment that recurs around the same time every year.

seasonal work

Businesses that primarily have more customers during specific season hire seasonal employees for extra help during their busiest times/ Other seasonal jobs require warm or cold weather, so companies shut down in the slow season. 

most of their visitors

Resorts in places with beaches, beautiful scenery, and popular attractions get ________ during the summer.

seasonal help

Hotels and restaurants often need _________, and you can apply for a job as a tour guide or a lifeguard.

Unbalanced Economic Development (Negative Economic Impact

“The slums of Manila and Cebu are as a bleak as they always were, and on the ground, average Filipinos aren’t feeling so optimistic. The economic boom appears to have only benefited a tiny minority of elite families; meanwhile, a huge segment of citizens remain vulnerable to poverty, malnutrition, and other grim development indicators that belie the country’s apparent growth.” -The Atlantic

Over-dependence on tourism

Flouting regulations and restrictions, bars, and hotels began to build too close to the water and to hook their drainage pipes up illegally to Boracay’s drainage system instead of to the sewage system.

1. Stimulate measures to protect the environment.

2. Promote the preservation of landscapes and seascapes.

3. Development and maintenance of attractions

POSITIVE ENVIRONMENTAL IMPACT OF TOURISM

1. Pollution (Water, Air, and Land)

2. Overcrowding

3. Loss of habitat for endemic species

4. Coral degradation and bleaching

5. Erosion and physical damage

6. Visual/structural change of the environment

7. Excessive use of resources (e.g., water, fuel)

NEGATIVE ENVIRONMENTAL IMPACT OF TOURISM

1. Development of Infrastructure

2. Provision of new facilities and modernization

3. Improved surroundings

4. Strengthens local culture, art, and traditions

5. Local Involvement

6. Promotion of cross-cultural understanding

7. Exposure to new ideas and development of new skills

8. Empowerment and social inclusion

9. Creation of Worldwide Identity

POSITIVE SOCIO-CULTURAL IMPACT OF TOURISM

1. Increase in crime rates

2. Traffic congestion

3. Commodification of culture and art

4. Degradation of cultural values and environment

5. Demonstration effect

6. Conflicts between host/local community and tourists

NEGATIVE SOCIO-CULTURAL IMPACT OF TOURISM

Commodification

transforming something into a product for commercial purposes, an item to be bought and sold in the market.

Intangible cultural heritage

is frequently used in the commercial sector incorporated into company names, branding, logos, and products.

Tangible cultural heritage

may also be commodified, sich as in the case of artworks intended to be sold commercially.

IMPORTANCE OF IMPACT ASSESSMENT

It is a structured process for considering the implications, for people and their environment, of proposed actions while there is still an opportunity to modify (or even, if appropriate, abandon) the proposals. It is applied at all levels of decision-making, from policies to specific projects.

Impact assessment

____ will look at what possible outcomes a specific action can have and how to minimize or prevent any negative outcomes.

RISK

Effect of uncertainty on objects.

RISK

Possibility of something bad happening.

RISK

Often expressed in terms of a combination of the consequences of an event including changes in circumstances and the associated likelihood of occurrence.

ECONOMIC RISK

Risk related to the economy in which the business operates.

ECONOMIC RISK

It refers to the likelihood that macroeconomic conditions (conditions in the whole economy) may affect an investment or a company’s prospects domestically or internationally.

SOCIAL RISK

Refers to the actions that affect the communities around them.

SOCIAL RISK

The everyday life disturbances, conflicts, and social damages which lead to the interruption of activities, or the unavailability of some services or utilities, over various periods of time, for a variable number of persons, for a variable number of services.

ENVIRONMENTAL RISK

Is the probability and consequence of an unwanted accident because of deficiencies in waste management, waste transport, and waste treatment and disposal. Several pollutants are released into the environment, which cause serious threats to human health along the way.

Inflation

rise in general level of prices of goods & service in an economy over a period of time.

Crowther

defines inflation as "a state in which the clause of money is falling i.e., prices are rising.

"too much of money chasing too few goods"

Prof.Coulbourn- defines inflation

1. Unemployment or Underemployment

2. Cyber Attacks

3. Foreign Exchange Risk

4. Failure to National Governance

5. Fiscal Crises

6. Sovereign Risk

7. Inflation Rate

8. Economic-legal Risk

EXAMPLES OF ECONOMIC RISK

Underemployment

is a measure of the total number of people in an economy who are unwillingly working in low-skill and low-paying jobs or only part-time because they cannot get full-time jobs that use their skills.

Underemployment

is the term used to designate the situation of those who are able to find employment only for shorter than normal periods-part-time workers, seasonal workers, or day or casual workers.

Underemployment

The term may also describe the condition of workers whose education or training make them overqualified for their jobs.

fiscal crisis

is a situation where a government cannot finance its regular activities, including providing social services, paying for defense, and managing other government functions.

1. Labor issues

2. Human rights violations

3. Corruption

4. Poverty

5. Minority Race

6. Ethnicity or Social Isolation

7. Limited community resources

8. Violence/Crime

9. Terrorism/War

EXAMPLES OF SOCIAL RISK

Labor issues

Unfair labor practices can make an employee's entire life miserable and potentially lead to a lower income, stalling career, and unhappy home life. Unfair treatment does not always qualify as an illegal act.

Labor Issues

Examples of unfair labor practices in the workplace include denying benefits or promotions to specific employees, discriminating against older workers, unequal pay, and many others. Discrimination is not only morally wrong; it is also illegal.

Corruption

abuse of entrusted power for private gain.

Human rights violations

Arnaiz was killed by Caloocan police officers on August 18, 2017, with authorities saying he had staged a hold-up against a taxi driver.

Corruption

erodes trust, weakens democracy, hampers economic development and further exacerbates inequality, poverty, social division and the environmental crisis.

Corruption

can happen anywhere: in business, government, the courts, the media, and in civil society, as well as across all sectors from health and education to infrastructure and sports.

politicians, government officials, public servants, business people or members of the public.

Corruption can involve anyone:

1. Air Pollution

2. Natural Disaster

3. Toxic Waste

4. Radiation

5. Pesticides

6. Heavy Metals

7. Chemicals in Consumer Products

8. Climate Change

9. Disease-causing Microorganisms and Plants

EXAMPLES OF ENVIRONMENTAL RISK

Likelihood multiplied by the highest Severity rating.

Risk Assessment Computation

significant risk

Risk Assessment Rating: 6 and above it is

1 - Unlikely but possible to occur
2 - Will occur several times
3 - Likely to occur often

Describe the identified risk and rate the likelihood or the occurrence of the risk to your province.

MITIGATION

Refers to preventing, reducing, or controlling adverse environmental, economic, and social effects to the province and/or community.

restitution

Mitigation includes ___ for any damage caused by those effects through replacement, restoration, compensation, or any other means.

Risk Mitigation

____ refers to the process of planning, developing methods, and options to reduce threats or to lessen the effects of risk faced by the province.

• Increased public awareness.

• Reduced future loss of life and property.

• Reduced future needs for response and recovery.

• Increased funding eligibility (potentially).

• Reduced business and economic interruption.

• Strengthened community partnerships.

IMPORTANCE OF MITIGATION

Action Plan

Refers to the plans in response to the risk once it occurs.

Contingency Plan

Refers to the plans to avoid the occurrence of the risk.