1. PESTTG Analysis

2. PESTTG Analysis
The tool we use for understanding the macro-environment (big picture) in which we operate.

3. The Big Picture

4. PEST
Political
Economic
Social
Technical
Megatrends
Globalisation

5. Political

6. Critical Success Factor
Your main Critical Success Factor is your ability to:
COMPLY WITH THE RULES

7. Political ecological/environmental issues – kyoto protocol
current legislation host market
future legislation
international legislation
regulatory bodies and processes
government policies
ADS (Approved Destination Status)
government term and change
trading policies (FTA’s)
funding, grants and initiatives
home market lobbying/pressure groups
international pressure groups
wars and conflict

8. http://www. eturbonews

9. Rules of the game
You must understand government policy relating to your industry
Most policy is discussed for months and sometimes years in advance
You going to monitor these potential changes that could seriously affect the viability of your business

10. Economic Environment

11. Economic home economy situation overseas economies
general taxation issues
taxation specific to product/services
seasonality/weather issues
market and trade cycles
specific industry factors
market routes and distribution trends
customer/end-user drivers
interest and exchange rates
international trade/monetary issues

12. Burton’s Four phases of Tourism Participation
Economic Developments
Tourism Participation
ONE
Mainly subsistence-based and pre-industrial.
Rural, Agrarian. Large Gap between poor masses and small elite.
No mass participation in tourism.
Elite travel to domestic and international destinations.
TWO
Industrialising
Rapid Growth of urban areas.
Growing middle class
Widespread participation in domestic tourism .
Increased scope of international tourism by elite.
THREE
Almost industrialised.
Population mostly urban.
Middle class becoming dominant.
Mass participation in domestic tourism, and increase in short haul international tourism.
Elite turn towards long hall international tourism.
FOUR
Fully industrialised ‘high tech’ orientation
Mostly urban.
High levels of affluence throughout the population.
Mass participation in domestic and international (long haul and short haul) tourism

13. Economic Environment
The most common approach to the study of economics of tourism is to divide it into two major areas:
Supply (destination resources)
Demand (people or market)

14. Supply Movements away from the market equilibrium cause inefficiencies
Undersupply of product, leads to high prices and profit loading, with not everyone being able to buy what they wish, frustration
Oversupply of product leads to low prices and questionable sustainability, empty rooms, unused capacity, inefficiency of investment

15. Demand
Demand = Motivators x Facilitors Resistance Factors

16. Economic Factors affecting demand
Disposable Income
Inflation
Interest rates (including Official Cash rates)
Employment
Foreign Exchange Rates
Non-economic Factors
Health
Time

17. Socio-Cultural

18. Socio-Cultural Impacts
People and their attitudes are the focus of socio-cultural impacts.

19. Social lifestyle trends demographics consumer attitudes and opinions
media views
law changes affecting social factors
brand, company, technology image
consumer buying patterns
fashion and role models
major events and influences
buying access and trends
ethnic/religious factors
advertising and publicity
ethical issues
trinketisation
overcrowding
corruption

22. Technology

23. Technology

24. Technology
Scan and evaluate horizon looking for changes in technology that will enhance business
More to technology than just computer technology
Think faster, lighter, stronger,
Think of how you can make your customers ability to book easier!
If you aren’t innovating I bet your competitors are!

25. Technological competing technology development research funding
associated/dependent technologies
replacement technology/solutions
maturity of technology
manufacturing maturity and capacity
information and communications
consumer buying mechanisms/technology
technology legislation
innovation potential
technology access, licensing, patents
intellectual property issues
global communications
research and development

26. MegaTrends

27. Advancements in Communications
Internet
Smartphones
Tablets
Laptops
Wi-fi
Accessibility
Viral marketing
Blogs
Forums
Youtube

28. Eco Tourism ENVIRONMENTAL PROTECTION Protect natural assets
Conserve resources
Maintain cultural assets
Protect lifestyle
Monitor Impacts
Set limits to change

29. Aging Population Over 50% of the discretionary spending power
boomers accounting for about 80% of all leisure travel
10,000 Baby Boomers will reach the age of 65 every day for the next 18 years

31. Globalisation

32. Globalisation International Competition
Legislative requirements across Borders
Passport and Visa obligations
Diversity of staff
Cultural misunderstanding
Company structure

33. Using PEST to develop strategy
Change type (PESTTG)
Nature of change
Impact implication
Market driver
Key success factors for winners
Strategy response

34. Using PEST to develop strategy
change
type
nature of
impact
implication
market
driver
key success
factors for
winners
strategy
response
political
Increased media attention on industry behaviour
Leading to consumer distrust
Consumer backlash leading to consumer ‘power’
Need for a ‘trusted’ positioning in the market
Build this key customer value into brand
social
Overcrowding
Loss of enjoyment/quality experience
Reluctance to travel
Personalised service
Build customer loyalty by introducing delight factors
economic
Fluctuating foreign exchange rates
Insecurity around pricing structure for client
Preference for USD as a basis for transacting
Factor in an allowance for FOREX fluctuations
Sell on value proposition with dynamic pricing
technologY
Increased use of internet to research product (inc handheld device)
Clients are knowledgeable on destination
Interactive travellers
Increased need for authenticity
Deliver well rounded product that focuses on quality product and interpretation
MEGATRENDS
Babyboomers retiring
Increased length of stay.
High service levels demanded
Slower paced tours
Relaxed pace.
Educated guides
Trained in in health assistance
GLOBALISATION
Blurred borders for litigation
Should something go awry, which set of legislation applies
Americans are litigious by nature
Clarity on booking conditions
Transparency of booking terms and conditions outlined during sales process
Using PEST to develop strategy