External and Competitive Environment for tourism Industry Essay

External and Competitive Environment for tourism Industry - Essay Example Tourism Industry Total receipts from tourism are 9% of the world GDP and the tourist industry employs 2.8% of the total world population (Quick Facts, 2010). The Tenerife economy is greatly reliant on the tourism industry. The service sector of the economy contributes 79.4% to the GDP where hostelry comprises of 14.29% of the total of the tourism industry of the Canary Islands (Economic Sector, 2005). It is approximated that 10 million tourists visit the Canary Islands which includes 5 million tourists every year in Tenerife alone (Osborne). It was once viewed that more tourists meant more money in the industry but now a new concept have revealed (Osborne). The Tenerife Industry is focusing more upon quality of the services provided rather than increasing their sales (Osborne). This is mainly due to the realization that tourists enjoy quality vacation and are ready to pay higher amounts to stay in â€Å"good quality† four and five star hotels (Osborne). The volcanic eruption i n Iceland in 2010 carved a caricature of the Tourism Industry in Europe. Initially, the volcano eruption rose excitement among the tourists and they went on to Iceland to have a look at the natural catastrophic eruption. However, later the danger aggravated and not only the tourism industry of Iceland but of the whole Europe was messed up. ... nge and Europe might not experience summer which would then result in the loss of tourism revenues from countries like Switzerland, France and Italy (Gupta, 2010). Thus, the tourism industry all over the Europe seems to face the trickle down effects of the volcanic eruption in the region. Objectives The video demonstrated a situation of the tourism industry in Tenerife and the effects after the volcanic eruption. The tourist Nigel experienced the whole situation in a hotel and came up to the conclusion that he liked the hotel whereas, he was unsatisfied with the services if Ryan Airways through which he was flying. This was utterly due to the different behavior adopted by both the organizations. The hotel was hospitable and accommodating whereas, he faced the opposite reaction from the Airways and was in a complete dismal. Thus, the focus of the report is to investigate the reasons for the two distinguished reactions of the organizations that were going through the same natural circu mstances. Both the organizations are an integral part of the tourism industry, yet they resulted in different attitudes. Therefore, further analysis would seek to clarify. Spain PEST Analysis Since the Canary Islands are a province of Spain the PEST analysis would enhance the analysis. Political Analysis Spain has a mixed capitalist economy and ranks as the 12th largest in the world. The political conditions are somewhat stable and hence, the economy has been successful until 2007 when the effects of recession began to be felt in 2007 (World Factbook, 2010). Economic Analysis Real GDP growth decreased in 2007 in the wake of recession by 3.9% and later in 2010 by 0.2%. Per capita income also saw a declining trend and the public debt increased from 53.2% of GDP in 2009 to 63.4% in 2010 (World