Economic Issues In Event Industry
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Economy of nation plays important role in event sector in the world. It helps this industry to grow further in the country. It also contribute effective role in generating better growth for this industry in United Kingdom (Boykoff and Olson, 2013). Mainly, this sector is major source for nation to generate better revenue. Many event organisations and events help countries in generating higher income which assist the nation to manage its government operations. The present file defines overview of event industry and issues associated with it. In addition, it also states present economic problems like taxation and inflation which is faced by companies in this industry. In the present case, talent gap related issue which was faced by event industry was taken. In addition, it also states present economic problems like taxation and inflation which is faced by companies in this industry. In the present case, talent gap related issue which was faced by event industry was taken.
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Generally United Kingdom is developed country in the world. This thing attracts more people to come in this country. There are many ancient historical places which increases frequency of visitors in the nation and organize events there (Leleivai, 2014). Events introduces in country has increased as per comparison of previous years in United Kingdom. It plays important role to enhance the business of this industry in the United Kingdom. This industry also integrates with hotel sector which provides effective facility to consumers in the nation. As per WTTC (World Travel and Tourism Council), it revealed records of percentage for employment which were provided by UK government in 2013 during organizing many events (Du Plessis and Saayman, 2015). Mainly travel and tourism of UK generated 1 million jobs for its citizens. Generally, Britain was ranked 8th as per economic ranks in the industry (Nanau, 2014). United Kingdom will be ranked 7th for travel and tourism sector till 2023 in the world and it was possible due to organize event in successful manner. It is also contributed £58.4bn to UK GDP. This sector helped country in term of increasing contribution. From the study, it is clear that in order to meet the growing number of vacancies in the UK events sector, enterprises is facing different types of economic issues. It is bigger than the contributions of activities like construction of buildings management consultancy, legal and accounting services which were 2.2%, 2.4% as well as 2.1%, respectively (World Travel and Tourism Council, 2013).
There are many economic issues which are faced by event organized in UK in 2015-2016.. Some of them of are followed below the paragraph.
The UK event industry has appeared as one of the key industries driving growth of the services sector in UK. It has germinate into an industry that is delicate to the necessarily and desires of people. The future of this industry has always been coupled up with the outlook of the present industry (Rogers, 2013). The UK event industry has recorded healthy growth burning up by beefy influx of abroad tourists. It has also increased tourist movement within the country and it has become one of the star participant in the international industry.
Accordingly, millions of UK travellers visit overseas and attend this event. Holiday making is the primary reason that UK residents travel abroad. The company trade with the both inbound and outbound tourism. Changes in legislation bring about huge changes in event industry (Baylis, Wirtz, and Gray, 2013). They are:
Changes in UK rules and regulations-Legal factors have external impact on event organizing firm and members associated with it and they include any changes in the UK district that affect the event industry in direct and indirect ways. For example: Immigration rules and operation of getting a UK visa becoming stricter have impact on event industry's performance in UK in indirect ways (Duncan and Goddard, 2013).
UK consumer protection rules and regulations - Moreover, event performance is directly affected by consumer protection and employment laws in UK (Boykoff and Olson, 2013). Changes in legislation such as consumer protection rules have also affected the nature of competitive regulation, and risks of military invasion in the country.
Restriction rules - there are many visa restriction rules in many countries such as the USA, and in Australia for the international visitors and these countries plays important role in the event industry. This in turn affects the hotel and tourism industries (Duncan and Goddard, 2013).
Legal issues such as government planning actions and taxation policy on aviation fuel and VAT on air tickets, rail tickets affect the working of tourism and event industry.
Political factors affect the event industry in the form of taxation policies formulated by the government. For example: decision regarding the increase in petrol prices and taxes over them has affected the event sector which in turn affects the consumer demand in UK (Dhurup, 2012). The impact of initiating tax on the hotel room prices mostly depend on demand price elasticity. If the demand is sufficiently elastic, hotels will not be able to increase the room price and shift the taxes on guests. On the other hand, they will have to bear it by themselves with reduction in the profit. If the demand is inelastic, hotels will be able to gain the accommodation price and guests will have to bear the newly introduced tax through increased accommodation price (Sadler, 2011). When there is high price snap, for the hotel sector due to increased tax and non-tax burden, in final there will be a huge reduction in the number of guests (Boykoff and Olson, 2013).
The World Tourism Organisation (WTO) cites that there is existence of much number of taxes and fixed charge related to the event activity. These are for movement (visa fees, entry and exit charge); air and ship conveyance (airfield and seaport charges and fees, charges on travel tickets, endeavour and taxes on the fuel, tax on the facility, allowance for the safety); hotel and other betterment. These taxes highly affect the event sector in UK (Pedersen and Thibault, 2014).
A major trend in recent times is the development of the event industry in cities other than major metros. As real estate prices have been soaring, setting up and are becoming more expensive cause of taxation policies. This in turn highly affects the this sector in UK (Nanau, 2014).
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It is affected by Brand power and customer loyalty, Multi-channel customers, and interest of investor and responsible business of events organized in the United Kingdom. Power of brands can be a key source to influence the event sector (Catterall, Maclaran and Stevens, 2013). For example, many resort and organizations like Olympic game was organized in UK to attract visitors and enhances contribution of visitors in UK economy. But these facilities are based on segmentation in nation. This thing is increasing brand and consumers loyalty for only premium class people (Rogerson, 2013). There is issue with middle class people in the nation. These types of people are suffering with many facilities in the nation (Boykoff and Olson, 2013). They are not getting proper services which are creating constraint for event sector. They are not taking interest to see tourist and places where event is organized due to shortage of monetary funds in UK. These things are affecting growth of event sector in United Kingdom. Responsible business is also another economic issue of event. Rules and regulation of immigration is very strict for foreign visitors which creates problem for the foreigners to get entry in the country (Bladen and et.al., 2012). It is also time consuming process for other country people in the Britain. So event hositing organisations do not able to operate proper business in the UK. This process is affecting the profit of event sector in United Kingdom. This industry is generating limited revenue from domestic and international tourist which directly creates bad impact on the nation. Investor’s interest also affects the event sector by changing industry structure in the nation. Generally, Shareholders of UK are taking more interest in developing urban area for organizing event and increasing tourism (Catterall, Maclaran and Stevens, 2013). On the other side, they are not concentrating on improving rural areas in United Kingdom. This process is also affecting the income of event sector which directly affects the economy of country.
Increasing inflation also has negative impact on event sector in United Kingdom. It also increases prices of raw material in the nation which directly enhances cost of products and services in the country. For example Inflation was witnessed in the year 2008 in UK. These things increased the cost of commodities in nation was affected cost of event (Steyn, Hollander and Roux, 2012). This process also obliged event organisation to raise price of services which created negative impact on travellers in the nation which was attended event. It decreased the frequency of visitors in United Kingdom. Increasing inflation also obligated the people of UK to reduce necessary expenses. It also affected flow of money in the country (Moital and et.al., 2012). Further, it reduced the demand of products and services in the nation. This process negatively affected the travel and tourism sector. At that time, event hosting organization produced very low revenues as per comparison of previous years in United Kingdom. These things affected the economic level of nation due to shortage of monetary fund’s in the country (Getz, 2012). This process also reduced frequency of foreign customers in nation which decreased business of event sector in the country. These complexities created big issues for event hosting organisation in UK. For example, Hilton and many other enterprises generated negative cash flow during this year because of increasing inflation in the United Kingdom. This process also obliged the travel and tourism sector to import services to accomplish their operations in the nation. Event organisation was unable to invest any type of capital investment due to loss of income in United Kingdom. Currently, inflation level is stabilized in UK (Rogers, 2013).
Generally the floating exchange rate system is the regulation among all countries. This currency value is fluctuated by foreign-stock exchange which is based on economic performance of nation. For example, performance of UK is positive in all sector including travelling and event sector then value of currency rises as comparison of other (Spenceley, 2012). Otherwise, reduction is also possible in pound. Mainly this factor is affected of by event organizing trends and depreciation of currency of UK. Mainly Britishers gives higher priorities for travelling on the other countries to view evenets. This process also reduces the monetary funds which directly affect the economy of nation. Currency rates impacts various fundamental and technical factors in the nation. These things also associate interest rate differentials, economic performance, supply and demand of the two currencies and inflation in world 12. (Pedersen and Thibault, 2014). Mainly, multi national hospitality organisations are also affected by these affect in the all nations. This process also reduces their revenue generation which affect the income this industry in the United Kingdom (Wellington, 2015). Mean organisations will conduct its transactions by using the various currency payments from one to other nation. This process includes foreign currencies between two countries. If the value of pound is fluctuated sharply or unexpectedly in the global market then it also affects profits of hospitality organizations. This process affects the services of travel and tourism sector in the United Kingdom. Government of UK gains less income from this sector as tax (Moeran and Pedersen, 2011). These things also create many complexities for hotels and resorts in the nation. Fluctuating value produces issues on currency futures markets as well as economic uncertainties. It makes difficult to secure estimated profit margins of hospitality organizations in the Britain. Unfavourable exchange rates oblige the travel and tourism sector to change in travel patterns, rules and regulations for hospitality corporations in the United Kingdom and affects success of events (Baylis, Wirtz and Gray, 2013).
It is one of critical issue for event sector which affect economic condition of the UK very badly. This thing also spoils the budget plan of nation because it occurs unexpectedly in the country. It generates so much expenses of United Kingdom. These things affect the other operations of the government in the state. This process also impact heath and tourism sector in the nation (Leleivai, 2014). Natural disaster is come in the form of earthquake, flood as well as heavy storms which harm social assets and people in the nation. It also damages event area in the country. These things also create fear in the mind of local and international tourists in the United Kingdom. This process is reduced travellers for many years in the nation. In addition, government also apply huge efforts to improve affected area as well which create so many expenses to repair and renovate them in the country (Dhurup, 2012). This process also affects income of event sector in the UK. It also reduces business hospitality organisations in the impacted area for many years. This process also generates less income for these corporations in the country. Natural disaster also creates unwanted situations for the government of Britain like enhancement various diseases which oblige them to provide different medical facilities to cure the people as well within nation. So natural disaster affect the economic situations so much badly which directly impact on revenue of event area in the United Kingdom (Moeran and Pedersen, 2011). It also affects event areas and also reduces business. So these types of things impact the profit margin of hospitality organisations as well as tourist places in the nation (Du Plessis and Saayman, 2015). In addition, it affects income of government by collecting less income from event sector in the United Kingdom. For example, due to increase taxes many event planning organizations are facing several issues such as lack of availability of talented people and it will create negative impact on the canvas of the mind of customers who will attend event Due to negative change come in economy conditions, event planning organization are spending less amount of money in recruiting talented employees.
There are many issues in this event industry. Generally government of UK does not emphasizing more concentration as comparison of other sector like renewal energy as well as defiance. These types of approaches are also affecting income of event industry in the Britain (Rentala, 2012). These things are also creating less interest in shareholders regarding this industry in the country. Many other investors are investing their money on the other sectors in order to earn more profit in the nation. So event organizations needs more monetary fund’s to develop new tourist areas to improve these industry in the United Kingdom (Ward, Yates and Song, 2014). In addition, these types of things are also affecting the operations of its industry which is generating fewer revenues as comparison of other sectors in the nation.
Generally, events planning firms are facing so many problem in the United Kingdom because these firms do not getting better talent in the nation. Organisations are suffering management problems to manage its operations in the UK. Due to this effect, corporations are feeling problems to manage the events. These things are affecting the client services in the nation. In addition, complaints of consumer have increased as comparison of previous years in the firm. This process is also reducing customer’s orders in the nation. There is no better college in this area. So organisations are not getting better talent in workplace in the country. Event planning corporations also facing training problems with hired employees. Generally new trainees do not have basic knowledge regarding event management in the United Kingdom (Chappell, 2014). Due to this effect, expenses of event organisations have increased as comparison of previous years in the country. Many of staff members also leaving the job due to lack of event management skills in the work place. These processes are increasing work pressure in the organisations. Therefore, there is need to manage all activities in the event management corporations.
Due to changes come in economy, entire event industry has been reflected and lack of availability of talented employees created issue for event organization to host event in a proper manner. This approach also reduces the profit of small event planners in the United Kingdom. Foreign investor will get more profit as comparison of domestic shareholders which increases transactions of currencies (Ward, Yates and Song, 2014). This process will also decrease economic value as comparison of the other nations. Foreign direct investment will be very costly expensive and risky option for hosting event which will reduces income of this sector by increasing more rivalry among the more enterprises in the United Kingdom. After implementation of Foreign direct investment, this sector has to follow many rules and regulation of FDI which creates so many complexities to handle these operations in the United Kingdom ((Matei, and Chirita, 2012). This way, capital investment highly affects the economy which creates many issues in organizing event and influences the entire event sector.
From the report, it is found that overview of event sector provides the brief information about this industry in the country. It is giving optimistic advantage to understand further economic knowledge in the nation. Further, brand and customer loyalty also provides fewer opportunities for small event planner as comparison of premium class people consumers in the event field within the United Kingdom. Fluctuation in exchange rates is affecting operations of event industry in the UK. It also creates complexities to earn profit for event planning organisations in the nation. In addition, natural disaster and economic issues highly affect the economy, event industry of United Kingdom. They also impact financial budget plan of the nation and entire event industry. It can be concluded that foreign direct investment and changes come in event industry will also create negative impact on income of event hosting firms due to high competition in the nation.
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