The tourism industry is a type of business where people get out of their casual environment and visit someplace different for leisure activities. The purpose of tourism is to refresh your mind by changing the environment, away from home, business, and work environment.
The tourism industry is a combination of many sub-industries like Travel companies, hotels and restaurants, lodging, transport business, attraction, and many other small businesses. The tourism and travel industry plays a significant role in the economy of a country.
According to statista.com, the tourism industry combined with the travel business contributed approximately 2.9 trillion US dollars to the global economy by the end of 2019. The tourism industry has added approximately 580.7 billion US dollars to the US economy alone.
When we talk about the countries and cities where the share of travel and tourism industry has added the most, Macau is the top of the list.
Today we’ll discuss the swot analysis of tourism industry, how the internal strengths/weaknesses, and the external threats/opportunities the tourism industry has to face.
Here’s the swot analysis of tourism industry;
Strengths of Tourism Industry
Following are the major strengths of the tourism industry.
Cultural heritage and historical places are the main centers of attention for many tourists. The history and archeology students are also the target market of such places.
The ancient temples in India and Thailand, the Great Wall in China, the Egyptian Pyramid, K-2 in Pakistan, Himalayas mountain, ruins of ancient Greeks, Stonehenge in the UK, and many other places around the world are a cultural heritage that attracts thousands of tourists every year.
The other thing that comes along with cultural heritage is the local festivals. They’re different in different parts of the world. Some festivals are so unique that attract tourist to have a real-life experience of those festivals.
For instance, the New Year festival in China, the colors of Holi in India, American Orgi, and wild bull race in Spain, Pamplona’s festival, and many other festivals. Such festivals and their unique history provide a unique experience to the people. It doesn’t matter whether it’s right or wrong and good or bad, they’re unique in their way.
When hundreds and thousands of people are gathered at one place and celebrating the festivals. They’re moving around, meeting with different, and enjoying the company of their friends and relatives. It gives the impression of a safe environment. The safety of the environment attracts more people towards it, and the tourism industry keeps on multiplying.
As I’ve discussed earlier that the tourism industry works in collaboration with other businesses as well. Different kinds of lodgings and accommodations for different types of people also attract people.
If a tourist spot has luxury hotels, it’s good for business and rich people. Some of the successful tourist places offer accommodation facilities for all types and categories of people.
Enough Resources to Produce Quality Products
One of the most important advantages of the tourism industry is that it increases the GDP growth of your country. When businesses and people in your country have sufficient capital and resources, then they would be able to produce quality products. When they start offering quality products and services to the customers, it would bring more people. The cycle of productivity and growth keeps on increasing.
The tourism industry plays a very important role in the GDP and economy of a country. In 2019, the tourism industry along with the travel business single-handedly added 2.9 trillion dollars to the world’s economy. The countries that have realized the significance of the tourism industry, earn billions of dollars of revenue annually from it.
A country with a strong infrastructure of roads, railways, and airports would attract more people. It’s because traveling convenience is also a very important aspect of the tourism industry. There could be very beautiful places, but there are no roads to reach there. People usually don’t take risks in their lives where there are no roads. Successful tourist countries have a well-established system of transport.
People speak different languages across the world and there’s a strong cultural diversity. It also includes different types of lifestyle, clothing, eating, festivities, and the whole social setup. It’s different everywhere. Some cultures are open and moderate that they’re willing to accept any good new thing. Such openness attracts a lot of people towards it.
Weaknesses of the Tourism Industry
Below are the weaknesses of the tourism industry.
Less Management Skill
As we have established the fact that tourism is a combination of different types of business. It means that you have to bring different businesses to the table to work for the same common goal. The objective would growth of the tourism industry.
It may seem simple and easy, but it requires a huge managerial skill. It’s because different businesses have different objectives and they may not agree with your plan. We don’t see a high level of professionalism often.
Lack of Innovation
The tech development and progress that we see in different fields like transport, hotels, and luxury are all moving in a different direction. There’s no coherence among all of them. We can safely say that it lacks innovation and creativity.
Lack of Quality Service
Some hotels and restaurants, airlines, and local travel companies provide quality service in some countries. Often we hear people complaining about their bad experience that they had with the different traveling agencies. Many tourism agencies working in different countries and they charge a very amount for their services. Very few of them provide quality services to their clients.
High Turnover Rate
The employees’ turnover rate is very high in the tourism industry. It’s because the work pressure is very high during the season, and pay is very low. The reason people accept such a job is to fill the gap in their careers. They’re always looking for a better opportunity. Whenever they find it, they leave their job immediately.
The businesses in the hospitality industry don’t hire employees permanently. They pay low wages to their employees and don’t invest resources in training and development. The employees’ satisfaction level is very low in this field.
Conventional Marketing Strategies
Most of the businesses and companies in the tourism industry use conventional marketing strategies. Like billboards, newspapers, word of mouth marketing, and referrals. Very few of them use sponsored posts on different social media platforms to target their specific market.
Opportunities for the Tourism Industry
Personalized Service with Unique Experience
Most of the hotels, restaurants, travel companies and other businesses offer a collective service and treat everyone the same way. They lack a personalized customer service experience. In other words, there’s a growth potential for new businesses in the hospitality industry. If they’re able to provide a unique customer experience, they can excel in it.
Unusual Venues to Attract People
If you’re new in this field of the hospitality industry, selecting an unusual spot and building it has growth potential. It would require a huge amount of resources. If you can manage to raise the capital, work on the land, establish a good place, then you would able to attract a lot of tourists.
A new product or service always has growth potential. It means that your product should be unique and catchy. If it can attract the attention of customers, then it would sell in the market.
People have become very cautious about the environment in recent years. If you establish a place free from plastic and zero carbon emission. Such steps would help you to attract environmentally friendly customers.
There’s a perception among the public that the hospitality industry is very costly. If your business offers quality products and services at an economical price, it would provide you a huge competitive edge.
If you employ online marketing techniques to target your customers, it would help your business to reach more audiences. You can increase the sale and profitability if your message reaches more people.
Threats to the Tourism Industry
Following are greatest threats to the tourism industry
Pandemic of Covid-19
The lockdown and shutdown of businesses due to the pandemic of covid-19 has impacted very badly the tourism industry. No one was expecting the worldwide lockdown. It did happen and it impacted a lot of small businesses.
Tourism industry has been polluting the environment. It includes carbon emission by burning fuels, plastic bags, endangering the wild, cutting off the tree to establish hotel resorts, and many other issues.
The global economy has been going through a period of economic recession. Many people have lost their jobs due to the pandemic. Their finances are limited and tourism is a luxury to them that they can’t afford.
Limited Professional Institution for Tourism
There are very few institutes that provide professional training for tourism. That’s why we don’t see often professionalism in the tourism industry. It could be the professional product quality and service, or the professional way of doing business.
The tourism industry has become very competitive. Many small businesses have jumped into it and they offer low-quality service at high prices.
It’s very difficult to get a tourist visa for different countries. Many countries don’t offer it easily. Even if you have the best quality service, but the government regulations aren’t letting people in. you can’t do anything about it. You have got no other choice, but to obey the law.
After a careful study of the swot analysis of tourism industry, we have concluded that tourism along with hospitality and transport business is indeed a successful business. But the visa restrictions, government regulations, and many other threats are real and important.