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Business Environment (Case Study)

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Table of Contents
Introduction......................................................................................................................................3

Section 1..........................................................................................................................................3

Sector 2............................................................................................................................................4

The impacts of the Covid-19 Pandemic.......................................................................................4

The impacts of the UK government’s recovery plan...................................................................5

Sector 3............................................................................................................................................5

The impacts of the UK government’s recovery plan on TUI Group’s micro-environment........5

The impacts of the Covid-19 Pandemic on TUI Group’s micro-environment............................6

Sector 4............................................................................................................................................6

The impacts of STEEPLE factors on TUI Group’s operations...................................................6

Conclusion.......................................................................................................................................7

References........................................................................................................................................9
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Introduction
This case study presents an overview of how the COVID-19 epidemic affected TUI Group to aid
comprehension. This investigation will centre on the company's culture because it is the finest
method to learn about the daily operations and worldwide role of the TUI Group. It is a
collection of external factors that might impact the firm's core business and everyday operations.
It was evident that the travel restriction would instantly harm the economies of both countries. In
the weeks after some nations' travel restrictions, border closures, and quarantine periods,
international and domestic travel has declined. People will also assist in comprehending how
STEEPLE impacts TUI Group operations. People’s team will provide the required information.
After researching, people will draft a report with suggestions on how TUI may improve its
operations and prosper. By participating in the organisation's activities, people may advance
career, get professional recognition, and build leadership abilities. Additionally, people will
receive plenty of practice. Numerous mergers and acquisitions have provided TUI with the
knowledge to expand its workforce. TUI has strengthened its customer service over the past few
years to maintain and expand its industry position.

Section 1
TUI is one of the names in the travel industry that is recognized and respected worldwide.
Members of the Group include some of the most influential tour operators, more than 1,200
travel agencies and well-known online travel portals, five airlines with a combined fleet of more
than 130 aircraft, more than 400 hotels, 16 cruise ships, and many inbound agents located in each
of the most popular tourist destinations around the world. Every link in the chain of value that
constitutes the travel and tourist industry may be found here. With this package, people can
provide the finest possible vacation for each of 27 million clients who travel each year to one of
180 various locations (Alina Mihaela Dima, 2021). The culture at organization is rooted in the
belief that the world's economy, ecology, and social life should all have the capacity to endure
for an extended period. People are well aware of this because they have been working in
ecotourism for over 20 years. The TUI Group will employ more than 60,000 individuals in 2022.
The business brought up an operating profit of 409 million euros while posting revenues of more
than 16.5 billion euros. The regulated Market of the Hanover Stock Exchange and the Quotation
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Board of the Open Market of the Frankfurt Stock Exchange are available for trading TUI Group
shares. Trading can take place in both of these markets. TUI Group faces competition from
several businesses, including HIS, Norwegian Cruise Line, Norwegian Cruise Line Holdings,
and Invited Home, among others. The TUI Group is a global travel agency that operates offices
on every one of the continents. Marks & Spencer Group (MKS), William Hill (WMH), RPC
Group (RPC), Inchcape (INCH), Bellway (BWY), Jet2 (JET2), Vistry Group (VTY), Sports
Direct International (SPD), Dunelm Group (DNL), and Frasers Group are some of TUI's most
formidable rivals (FRA). Another potential candidate is Frasers Group (FRA) (FRAS). These
companies are all part of a sector of the economy known as the "consumer-cyclical" industry.
TUI AG has twenty members serving on its Supervisory Board, yet only six are serving on its
Executive Board, and eleven are serving on its Group Executive Committee. Tui is answerable to
its shareholders and to anybody else who has any stake in the firm (Brinkman, 2019). Internal
stakeholders are employees and managers directly interested in how the firm pays its employees,
benefits, and other incentives it offers. External stakeholders are customers of the company, such
as investors and shareholders. External stakeholders can take several forms, including investors,
shareholders, and clients.

Sector 2
The impacts of the Covid-19 Pandemic
Even though the impacts of COVID-19 on the tourist industry are expected to persist for a
considerable amount of time, they have already had an impact and will continue to have an
impact. Travel companies have traditionally seen their highest levels of profitability during the
second and third quarters of the year. It is anticipated that COVID-19 will affect the firm's
profitability based on what has been disclosed up to this point for FY2020. COVID-19 might
induce individuals to spend their money very quickly, but its long-term impacts could lead to
significant shifts in how people travel. Transforming to a business model with fewer assets will
make previously transitory initiatives for cost reduction more permanent if it proves to be
effective. If for any reason, a customer needs to cancel their trip with TUI, there will be no
cancellation costs assessed. Instead, they will provide people with a discount of twenty per cent
off of a vacation they take in the future. ABTA states that customers who do not possess Refund
Credit Notes are entitled to an additional 20% compensation (Hamilton, 2018). Customers would
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rather have a credit note than receive their money back in whole, and this benefit will encourage
them to make that choice. The travel agency or corporation will have lower operating costs due
to this.

TUI's ability to cancel cruises and holiday packages has been expanded. Due to the COVID-19
pandemic, more than 900,000 trips have been scrubbed from the schedule. This is a distinct
possibility given the current limits on travel, which deter people from going elsewhere.
According to TUI, summer bookings were 59% fewer than during the previous year's period.
This indicates that the hectic summer season will soon be drawing to a close.

The impacts of the UK government’s recovery plan

Visitors from the United Kingdom had a lower level of certainty over their trip than tourists from
other European countries did as a result of the shifting posture taken by the government. This
increased the likelihood of them deciding against going to the United Kingdom. Even though a
sizeable portion of Tui's annual income comes from the United Kingdom, residents of that
country make up just roughly 17% of the company's 4.2 million summer consumers. They
stopped all activities for those who had yet to be vaccinated, even though informing the public
about the availability of free vaccinations caused many enterprises and employment to be
eliminated. This was done even though many firms and individuals were losing their jobs
(Hoffman, 2018). Even though it caused many businesses and jobs to be eliminated, it was
nonetheless carried out. It was made very apparent on the websites of TUI that in order to
arrange a vacation, a certificate of inoculation against the covid virus was required. The TUI
group and its companies were finally successfully generating sufficient revenue to meet their
financial obligations, including paying their bills and taxes, and life went back to its pre-crisis
state.

Sector 3
The impacts of the UK government’s recovery plan on TUI Group’s micro-
environment
The strategy contributed to the tourist industry's success. If the United Kingdom government
implements these steps, it will better position the tourist industry for success and move closer to
its critical economic growth objectives. After the vaccination program has been appropriately
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implemented, business in the United Kingdom will continue. This will give them a sense of
financial security and achievement. Businesses did everything they could to dispel the idea that
vaccines are free while incurring enormous financial losses due to having to start turning away
clients who could not provide proof of immunization. Numerous government-led initiatives
designed to enhance the economy's business and recreational tourism sectors have been effective
(Johnson, 2017). For the federal government to achieve its long-term goals for the tourist
industry's recovery from the consequences of COVID-19, the success of tourism-related
businesses is vital. The national VAT rate has been reduced from 20% to 5%, remaining in effect
until September 2021 for the tourist and hospitality businesses.

The impacts of the Covid-19 Pandemic on TUI Group’s micro-environment

As a result of the installation of stringent regulations in the travel industry, the operating
environment of TUI Group has altered. Since the epidemic began, TUI has restricted its services
to people immune to the disease and severed links with others. However, the firm will explore
expansion strategies once these restrictions are relaxed. While efforts are still being made to
manage the disease, there is no reason to maintain the existing travel restrictions. Those
vaccinated against the disease should thus be permitted to travel without limitation. People
should receive immunizations against the disease since this is the most effective preventative
approach. As a result, tens of thousands of new firms can be established, creating employment
opportunities for hundreds of thousands of individuals. In the previous five years, TUI has
achieved significant achievements in digitization, efficiency, and leanness. As a result, the
corporation has achieved many of its long-term objectives (Morrison, 2017). This would ensure
that TUI continues to produce revenue beyond the epidemic and boost the possibility that the
tourism sector can reimburse the government as anticipated. The travel firm is likewise
positioned to defend its existing market share.

Sector 4
The impacts of STEEPLE factors on TUI Group’s operations
STEEPLE refers to the following categories in this context: social, technological, economic,
environmental, political, and legal. Here is a comprehensive list of everything that this acronym
stands for. In a time when most folks cannot leave their homes owing to political upheaval,
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consumer feedback is more crucial than ever. Even once the sickness is successfully cured, the
desire to travel diminishes. The market demographics are further segmented by age, income, and
education, making it more challenging to do exhaustive research across these categories.
Changes in population, regional and individual fashion, and other circumstances play a part. The
consequences of STEEPLE, ethical problems around data privacy, and the likelihood of data
abuse are all accelerated due to the rising volume of data created by technological advances. The
tourist industry is now expanding at one of the world's quickest rates, which is positive for GDP
and employment prospects (Slocum, 2020). The present economic downturn has negatively
impacted the bottom lines of many businesses, particularly those that rely significantly on
tourists for revenue. As a direct result of the epidemic, tens of thousands of jobs were lost, and
several businesses were shut down. Economic consequences may be influenced by
environmental norms and legislation, which TUI must take into consideration. The phrase
"environmental issues" is commonly used to characterize these elements. If climate change and
other natural disasters occur, the adverse effects of globalization on businesses may be
minimized. If natural disasters or scorching temperatures significantly impact the company's
earnings, TUI's CO2 emissions may decline. When analyzing the elements that may impact Tui's
bottom line, it is essential to keep politics in mind. Given the present political climate, it is
necessary to mitigate the systemic risks inherent in a business like tourism and leisure, defined
by continual change and the free flow of people and goods across national borders. How the
government responded to COVID-19 significantly influenced the degree of immigration freedom
provided to individuals from other nations. Numerous individuals have been denied access to
Europe because their religion or nationality makes them unwelcome. This group also includes
pilgrims who travel to Europe to advance their spiritual development (Georg, 2018). TUI
complied with regulatory regulations by minimizing the number of consumers without the
necessary vaccinations. There are several ethical issues within the industry. There may be
disparities in the quality expectations of consumers and suppliers, poor training for newly hired
representatives, and false advertising.

Conclusion
The highest people place the most importance on the macro study conducted by TUI. National
governments are responsible for many tasks, including maintaining a stable political system,
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stamping out corruption, building efficient transportation, communication, and information

networks, and disseminating information to the public. Because of this, people have devised the
Tourist Recovery Programme to aid the creative tourism industry in getting back on its feet and
continuing its normal operations. In addition to lowering or eliminating tax obligations,
reimbursing customers, cutting down on the cost of maintaining corporate aircraft, hotel and
restaurant sites, and the headquarters, and reducing the amount of furlough pay for employees
are all ways in which TUI stands to benefit from the implementation of such strategies. The
skills and insights shared at COVID-19 will be helpful in many different industries, including but
not limited to digital marketing and management, the finance sector, and the provision of social
services.
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