Hays Travel is a part of the travel industry in UK, managing 450 outlets across the region. The company provides travel packages to customers who want to visit the locations within the UK, as well as offers travel plans for other countries. The PESTLE analysis of Hays Travel involves evaluation of the external environmental influences on the business operations.
About Hays Travel
| Hays Travel | Information |
|---|---|
| Industry | Travel agency |
| Founded | 1980 |
| Headquarters | Sunderland, UK |
| Founders | John Hays and Irene Hays |
| CEO | John Hays |
| Ownership | Private |
| Number of stores | Over 750 |
| Number of employees | Over 5,000 |
| Revenue (2020) | £2.1 billion |
Political Factors
The local and international travel depends on the level of political stability prevailing in a region. In the case of UK, political climate is favorable as the country has not experienced any major conflict. However, the international domain can face issues when there is political disruption. Hays Travel has to be wary of the political changes and respond accordingly.
Travel conditions and restrictions imposed by government can make it difficult to access certain destinations. Hays Travel has been able to identify the countries having favorable policies for tourists and has invested in developing its plans in line with these locations. For instance, Croatia is a part of the ID-check-free travel for European tourists, which allows ease for the people (McGrath & Cook, 2022).
Pandemic has resulted in travel restrictions by the government that made it challenging for the company to maintain profitability. The UK government had continued with the ban on Spain while the restrictions were removed for other regions. This has resulted in the risk of loss of 20% of workforce for the company as the foreign exchange domain was impacted by this decision.
In addition, the tax imposed by the UK government is also a part of the political factors that effects the financial operations of Hays Travels. Some of the taxes that are applicable include Corporation Tax and VAT. The board of directors have to make tax related decisions while taking the regulations and business output into view.
Economic Factors
The economic performance of a country influences the income levels of the population, which effects the number of people opting to spend on traveling. The 2008 economic downturn had an adverse effect on the travel sector and the company had to navigate through this challenging economic environment.
A recent unprecedented change that had a negative impact on Hays Travel was COVID-19, which resulted in temporary closure of company offices. The halting of operations during the pandemic had significantly effected traveling operations of the company, which has resulted in lower sales and financial loss (Hancock, 2021).
Government has extended support through furlough scheme, which has enabled the company to survive the pandemic. Another relevant economic factor is inflation which effects energy prices, adding to traveling cost. Despite the higher cost of traveling, people have been showing positive interest in spending on travel and tourism, even with an increase of £482 per booking.
Social Factors
The preference of people for travel destinations determines the locations that will be included in the travel packages by the company. The locations that are a part of the service package for the company are aligned with customer interest and preferences. For instance, Tenerife has been selected as a part of the scope of operations due to people’s preference for warm climate.
Pandemic has brought major changes in the way people were spending their free time and holidays. Davies (2020) has stated that the customers of Hays Travel were on a holiday on a liner when they contracted COVID. The company had to manage this challenge, while handling the customer concerns traveling to other locations as well.
After pandemic people are willing to spend more, overlooking the price increase and focusing on having a good quality travel experience. Hays Travel has been able to capitalize on this focus of its customers and has been able to gain a higher profitability after the pandemic restrictions were eased and traveling was made accessible.
Technological Factors
Technology has assisted the travel sector in the UK through allowing the companies to achieve improved connectivity with the customers. Hays Travel has been able to create customer data base which has enabled the management to understand their preferences and design the travel services accordingly.
Artificial Intelligence has brought significant improvements to the way travel booking is managed. Hays Travel has used a combination of AI and human touchpoints to create a higher relevance of its services to the customer’s needs. Moreover, technology has helped the management to increase the efficiency of connectivity between employees and customers (Dennis, 2022).
In addition, the growth of social media and digital technology requires that the organizations use these platforms to establish a strong market presence. The company has been able to use social media to create a favorable image in the market, as well as utilize it for gaining access to the skilled staff members.
Legal Factors
Hays Travel has to abide by the rules outlined by the UK government for company operations including membership of ABTA (Hays Travel Limited, 2023). These regulations also comprise licensing requirements and laws that affect the cost of travel such as air passenger duty. Furthermore, package regulations Act effect the way operations are carried out by Hays Travel.
Terms and conditions for traveling packages are also aligned with the laws created by the government. The management is also legally responsible for customer data privacy. Customer data needs to be maintained while considering the protocols to retain cyber security. The management is also required to adhere to the employment laws applicable in UK.
Environmental Factors
The environmental factors have created a drive towards sustainable business practices in the UK travel segment. The management at Hays Travel has initiated the green efforts by promoting the theme of “investing in our planet”. The key idea is to encourage the customers to opt for those accommodation and travel arrangements that have embraced the idea of green business practices.
For example, Khao Sok Thailand and 1 Hotel New York have implemented green design in the construction of accommodation sites. Moreover, A-Rosa is operating cruise liners that are inspired by the idea of hybrid energy, thus reflecting the presence of eco-friendly sailing (Hays Travel Limited, 2022).
Conclusion
One of the major influences on Hays Travel was pandemic which has disrupted the company operations. However, the post pandemic environment is providing the business with growth opportunities. There has been inflation and increasing fuel cost but overall the environmental dynamics are favorable and the management expects to observe positive business development.
References
- Davies, R. (2020). We’ll survive! Why Hays Travel owners have no regrets on Thomas Cook rescue. The Guardian. Retrieved from: https://www.theguardian.com/business/2020/apr/25/hays-travel-owners-no-regrets-thomas-cook-rescue-john-irene-hays
- Hancock, A. (2021). Hays Travel: the agency weathering the pandemic against all the odds. Financial Times. Retrieved from: https://www.ft.com/content/541fb9ac-4c1e-484d-ba33-e595fffd0719
- Hays Travel Limited (2023). About Hays Travel. Retrieved from: https://www.haystravel.co.uk/about
- Hays Travel Limited, (2022). Happy Earth Day: Go Green This Holiday Season! Retrieved from: https://www.haystravel.co.uk/blog/city-breaks/happy-earth-day-go-green-this-holiday-season
- McGrath, S. & Cook, L. (2022). Croatia to join Europe’s ID-check-free area, others to wait. AP News. Retrieved from: https://apnews.com/article/europe-bulgaria-romania-croatia-netherlands-government-f6fac46cbc30c7d187a09958a96d927c