THE REAL EXPERIENCE WITH THE NATURE
Since 2015
ECO TRAVEL
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Economic forces affect important variables such as inflation, value of dollar and different factors that a firm can not control.
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Economic forces have a direct impact on the potential attractiveness of various strategies.
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Economic forces affect the the nature of positioning and market segmentation strategies..
ABOUT ECONOMIC FORCES
Key economic variables
Key economic variables
Unemployment trends
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Value of dollar in world markets
Stock market trends
Foreign countries`economic conditions
Monetary Policies
Fiscal Policies
Tax Rates
European Economic Community (EEC)
Shift to a service economy in the United States
Credit availability is “The amount of credit to which a borrower has access at a given time”. According to Trending Econimics the consumer credit in the United States increased to 20.74 USD Billion in June from 16.52 USD Billion in May of 2015. Consumer Credit in the United States averaged 4.32 USD Billion from 1950 until 2015, reaching an all time high of 115 USD Billion in December of 2010 and a record low of -18 USD Billion in June of 2009. (Consumer Credit in the United States is reported by the Federal Reserve).
Availability Of Credit
The Department of Labor's Bureau of Labor Statistics has monthly data on employment by industry categories reaching back to 1939. The first chart below is an overlay of the compete series of employment numbers for the two major categories, manufacturing and services. Services industry employment began leveling off with the onset of the 2001 recession. Growth began accelerating again in 2004, but the rate of growth was well below what we saw in the 1980s and 1990s. Services employment hit its all-time peak in January 2008, the second month of the Great Recession. Services employment is slowly improving, but it remains about 2.6% below the 2008 peak.
Levels Of Disposable Income
The disposable income is the amount of money that households have available for spending and saving after income taxes have been accounted for. Disposable personal income is often monitored as one of the many key economic indicators used to gauge the overall state of the economy. In the United states, according to portal Trading Economics the disposable personal income in the United States decreased to 13352.50 USD Billion in June from 13429.30 USD Billion in May of 2015. Disposable Personal Income in the United States averaged 4643.97 USD Billion from 1959 until 2015, reaching an all-time high of 13429.30 USD Billion in May of 2015 and a record low of 351.90 USD Billion in January of 1959. (The U.S. Bureau of Economic Analysis reports disposable personal Income in the United States).
Economic periods where consumers are spending can boost the economy: more goods are purchased (high demand for goods and services); keeping more people employed and more businesses open. Wodon and others conducted a decomposition of the Gini coefficient sources, allowing them to conclude that individuals derive their income or wages productive use as physical capacity, human capital and connections "business assets".
Propensity Of People To Spend
Interest Rates
Interest rates have a direct effect on the financial sector, for example more expensive or lowering the credits, which in turn could affect consumer behavior and demand as well as the ability to save and in the same investment. This in turn can have an impact on the level of unemployment, for the same difficulty for companies to finance their growth and development. When interest rates are high, it is attractive for savings; so many people prefer to save than spend, thus contributing to contracting demand. The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
DEMAND SHIFTS FOR DIFFERENT CATEGORIES OF GOODS AND SERVICES
Domestic tourism continued exhibiting strong growth and in 2013, trips increased 17%. One of the most important factors behind this performance was the strengthening in the operation of low cost carriers like Viva Colombia and Easy Fly, which led other airlines to lower the price of tickets and offer strong discounts more frequently. Domestic travellers by air increased 22% in 2013, whilst land transportation by bus, although it continued to move the biggest proportion of tourists, barely grew in 2013.
Flight demand in Colombia airline allowed tourism to increase significantly by the fact that prices on airlines and transportation companies have been reduced; this benefits the tourism industry and likewise our company because this way more people may have the opportunity to life a unique experience.
Euromonitor.com,. 'Tourism Flows Domestic In Colombia'. N.p., 2015. Web. 18 Aug. 2015.
http://www.euromonitor.com/tourism-flows-domestic-in-colombia/report
INCOME DIFFERENCES BY REGION AND CONSUMER GROUPS
Colombia disposable income and expenditure levels expanded at a slower pace than regional averages over the period of 2009-2014. Nevertheless, positive reforms to the country’s business climate, coupled with lower levels of political violence, are expected to back growth of income and expenditure in Colombia during the long term. The expansion of the country’s middle class is having a marked impact on spending patterns, although income inequality in Colombia remains extremely high.
The expansion of the income in the period of 2009-2014 was slower that regional averages, however this expansion benefits the tourism industry because of the fact that the middle class is having more opportunity to invest in tourist trips, the rise in consumer expenditure in the long term.
Portal.euromonitor.com.ezproxy.unisabana.edu.co,. 'Biblioteca Octavio Arizmendi Posada'. N.p., 2015. Web. 18 Aug. 2015.
http://www.portal.euromonitor.com.ezproxy.unisabana.edu.co/portal/analysis/tab
IMPORTE AND EXPORT FACTORS
Colombia is positioned at number 50 in the raking of the observatory of economic complexity, allowing a positive impact on the economic sector of the country, therefore benefits the tourism industry because it guarantees a sustainable tourist destination.
Atlas.media.mit.edu,. 'OEC: Colombia (COL) Profile Of Exports, Imports And Trade Partners'. N.p., 2015. Web. 18 Aug. 2015.
https://atlas.media.mit.edu/en/profile/country/col/
PRICE FLUCTUATIONS
The USDCOP traded at 3003.55 COP on Wednesday August 19, according to interbank foreign exchange market quotes. The Colombian Peso averaged 1862.88 from 1992 until 2015, reaching an all time high of 3003.60 in August of 2015 and a record low of 689.21 in August of 1992.
Price Fluctuations affects all the industries for any company and the tourism is not an exception, this graph is showing how the Colombia peso has increase significantly against the dollar, this may be good for foreigners who invest in the country but negative for Colombians that will decrease their expenses.
Indexmundi.com,. 'Colombia - Birth Rate - Historical Data Graphs Per Year'. N.p., 2015. Web. 18 Aug. 2015.
EXPORT OF LABOR AND CAPITAL FROM THE UNITED STATES
The Colombian labor force is among the most skilled and competitive worldwide. More than half the population is under 25. According to IMD World Competitiveness 2011, Colombia is the country in the region with the highest availability of skilled labor and credibility of its managers.
International reports emphasize the good conditions of Colombia. In 2011, the country reached the fifth place in Direct Foreign Investment in the world, according to the United Nations Conference for Commerce and Development. Investment grew from $6.8 million USD in 2010 to $13.234 million USD in 2011, a record in the country's economy exceeding the objective set for 2014. (Procolombia.co)
This economic variable can have a positive impact and influence in our industry because of the fact that foreign investments will open new opportunities to the organizations inside Colombia, providing improvement of the economy.
Procolombia.co,. 'Colombia: A Market Of Opportunities | PROCOLOMBIA'. N.p., 2015. Web. 19 Aug. 2015.
http://www.procolombia.co/en/FTA-USA-Colombia/colombia-market-opportunities
Inflation rates
Goverment Budget deficit
Money markets rates
Gross domestic product
Consumer patterns
Worker productivity levels
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Investors prefer not to invest
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Tourism is the third largest employer in Colombia
The graph can show, the unemployment rate decreased in the US, and in January 2015 significantly increased in Colombia. The unemployment rate affects the industry of tourism, because people have more work and has more income that could use it in tourism or otherwise.
Taken from: http://www.tradingeconomics.com/united-states/unemployment-rate
http://www.investincolombia.com.co/Adjuntos/086_Tourism%20Sector.pdf
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4.5 Colombian workers are needed to produce what one American worker.
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It affects the Colombia industry of tourism because foreign companies, have large tour operators and hotels very efficient compared with other establishments with very low productivity in the country. With low productivity can be considered as a non- competitive destination for aspects such as innovation, lack of infrastructure (as shown in the graph), security, research, advocacy, environmental care, quality water supply, and basic sanitation.
http://www.dinero.com/pais/articulo/productividad-competitividad-colombia/202863
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$ 3,053.6521 de Agosto del 2015
http://dolar.wilkinsonpc.com.co/
When there is a dollar rise, foreigners as Americans will find cheaper packages and travel, and would choose to spend more on tourism because it increases the value of its currency, otherwise if there is a dollar decrease.
http://www.bbc.com/mundo/noticias/2014/10/140930_dolar_recuperacion_moneda_lider_lf
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Is necessary to maximize the share price to a stable economy, on the other hand it requires investment to improve productivity allowing an improvement in the tourism industry.
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United States has the world's largest economy
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In the first quarter of 2015, total GDP of the country closed at $ 131,573 billion; with outstanding participation of the financial, social services (19.8%); the large branch trade repair Hotels and restaurants participated with 12.1% of total GDP distributed as follows way: Commerce (8.3%), Repair (1.1%) and Hotels, restaurants, bars and similar (2.8%). If the economic condition of the country is not good there can be no investment in tourism, either Colombia nor United States, therefore there will be no consumption in the industry of tourism
Considering that the US rates for debt are lower than Colombian debt rates, it is better to ask for a credit in the USA,this could help a lot our bussines because it helps amercans take more credits that could be invested in a our bussines..
•The colombian debt is about 100 000 000 USDs, composed by the public debt and the private debt.
•Both debts together represented the 35,75% of the GPD in the year 2013.
•Colombian public dept has been increasing and now it is expected to be 19.7% of the gross domestic product proyected for 2015.
•“Only the external public debt of Colombia totaled 63.532 million dollars representing an increase of 17.8 percent over the same month of 2014”
*Banco de la Republica
Importance: This brings macroeconomic inestability, which increases interests rates as risk increases, the country is exposed to the Exchange rate. This could cause devaluation of the coin. Our bussiness can be indirectly affect by this variable
Despite the downward trend of the 2011, the Colombian economy has been increasing in the last 4 years.
This fact is very important for any bussinees within Colombia beacuse it reflects macroeconomic stability
From: http://www.bloomberg.com/markets/rates-bonds/government-bonds/us
After analyzing several sources national and international, we have defined the following patterns to be the most important to our organization,which can be considered as opportunities:
•Green trend: Consumers are shoping for brands that care about their environment and to mitigate any negative impact of their goods or services on the environment .(1,3)
•Ecoturism: Consumers are looking for new experiences related with nature, is considered the new trend toward sustainability (1)
•Health and welfare: having a healthy lifestyle is a priority for consumers and will rely on technology, through applications , to stay healthy. Topics such as food and exercise are very important. (2)
•The milenials: Consumers are looking for the latest technological item, they are always searching for an item that can optimize as many tasks as possible.(1,3)
•Influential people: Social networks are the most efficient platform for marketing strategies and bloggers the most important promotion tool. (4)
•Connectivity:According to PhoCusWright , almost 30 % of US travelers vacation reserved through a mobile device during 2015 , " a trend that Europeans are willing to go.“ (4)
1. http://www.dinero.com/internacional/articulo/tendencias-globales-consumo-2015/204820
2 .http://www.portafolio.co/portafolio-plus/tendencias-consumo-colombia
3. http://www.labioguia.com/notas/ecoturismo-la-nueva-tendencia-hacia-la-sustentabilidad
4. http://go.euromonitor.com/white-paper-top-10-global-consumer-trends-2015.html
Because of the devaluation,the idexation and he climate (fenómeno del niño) the inflation is expected to be 4.46% , 46 points over the limits imposed by the central bank.
Core inflation continues to rise in large part by a fruther incresase tradable
Importance: As inflation rises beyond the limits, Colombians’ purchasing power will decrease, causing a decrease in consumption.
Taken from: https://www.davivienda.com/wps/wcm/connect/ and DANE.calculo investigación económicas Banco de Bogota
Refer to the processes or channels, through which monetary policy decisions influence the product (GDP) and inflation. In Colombia the primary objective of monetary policy is to reach and maintain a low and stable inflation rate, and to achieve a long-term GDP growth trend, In the United States, the goals of monetary policy are to promote maximum employment, stable prices and moderate long-term interest rates.
The monetary policies affects the industry of eco-tourism, because every time the inflation rate, the GDP, interest rates and other factors changes, the economy of people is affected, also, their opportunities to travel and spend on tourism.
https://www.federalreserveeducation.org/about-the-fed/structure-and-functions/monetary-policy
The corporate income tax rate is one of many aspects of what makes a country’s tax code and economy attractive for investment. As the rest of the world’s economies mature and their tax rates on corporate income continue to decline, the United States risks losing its competitive edge due to its exceptionally high corporate income tax rate. In Colombia, personal tax rates stays at a 33 percent.
As tax rates vary, the earnings of our industry will vary too. The more taxes we pay to the government, the expensive things become and less consumers will be able to afford it.
http://taxfoundation.org/article/corporate-income-tax-rates-around-world-2014
http://www.doingbusiness.org/data/exploreeconomies/colombia/paying-taxes/
Organization of Petroleum Exporting Countries (OPEC)
The European Economic Community (EEC), the most prominent example of a free trade area, actually is what economists call a customs union. Whereas member nations in a free trade area remove all barriers to trade among themselves, in a customs union they also adopt uniform tariffs on goods and services from outside the union. The EEC is currently attempting to transform itself from a customs union to a true common market in which capital and labor, and not just goods, are allowed to flow freely from one country to another.
The European Economy Community will affect us is some way but not directly. Our main customers will be United States and Colombia population.
http://fee.org/freeman/the-european-economic-community
http://www.econlib.org/library/Enc1/EuropeanEconomicCommunity.html
Fiscal policy is the use of government spending and taxation to influence the economy. When the government decides on the goods and services it purchases, the transfer payments it distributes, or the taxes it collects, it is engaging in fiscal policy.
The fiscal policies affect the industry of eco-tourism, it happens because it influences the demand of good and services, and the level of economic activity. Fiscal policy can be used to stabilize the economy over the course of the business cycle.
http://www.minhacienda.gov.co/HomeMinhacienda/politicafiscal
http://www.banrepcultural.org/blaavirtual/ayudadetareas/economia/econo46.htm
The global economy represented the main risk to the oil market early in the decade, as global macroeconomic uncertainties and heightened risks surrounding the international financial system weighed on economies. Escalating social unrest in many parts of the world affected both supply and demand throughout the first half of the decade, although the market remained relatively balanced.
The Organization of Petroleum Exporting Countries (OPEC) affects economy of all countries, it will affect our organization too in different ways. Actually, exist some places full of raw oil that cannot be either visited or used to remove that oil. As our intustry is specially of ecological tourism, it will also affect us.
