Although fuel prices have been frozen, they are still hitting record highs. Of course, this is not only true for fuel prices, but is a general economic factor. The rise is not only affecting our country, but is a fact of life almost everywhere in the world. It is not worth going into the reasons, as it is the result of a complex, geopolitical and economic movement of factors. What is certain is that it affects everything and everyone.
The tourism industry
Exploring the world is a natural part of tourism. To go to new places, to experience new experiences. Obviously, this requires travel, one form of which is road transport. Moving around by car is essentially an economic activity, as fuel prices and tolls have a major impact on costs. The price of fuel is a key element in the financing of travel, and this has now shifted in an unpleasant way. People who have been freed from the grip of the pandemic do not seem to be making decisions on this basis, for the time being. The trip they want, the to have experiences is a stronger demand in society than economic austerity. On this basis, tourism will not be greatly affected by a sustained rise in fuel prices, either for foreign or domestic tourism.
Economic impacts
The demand for fuel has certainly put some sectors in an exceptional situation. Businesses are also heavily affected by prices. On the one hand, there has been an increase in foreign demand for fuel and, on the other hand, government measures have been taken. The transport sector, which is the engine of the domestic economy, is also being forced to take action. According to simple economic calculations, if costs rise, expenditure rises. So the obvious step for everyone is to raise prices in these sectors. If this has not been done and they stick to the old price levels, it will not be sustainable in the long term. They will be forced to raise the prices of services, which will be an inevitable step in the period ahead.
What happens to hospitality
The above facts suggest that costs will rise. The fact that the increase in raw material prices is already global is a fact. However, it is also based on economic calculations that a raw material, how the product gets from the producer to the end user. It is a long list. Producer, breeder, processor, distributor, tourist or catering unit. The inescapable link in this chain is the transport of raw materials and products, which is a cost on all sides. So to put it simply, and to explore what can happen to the catering and tourism industry as a result of rising or even stagnating fuel prices, is nothing other than price increases.
Why is this happening?
They simply cannot do anything else to maintain the profitability of their businesses. The price rises will reach the consumer. So it is inevitable that they will end up paying the price. It is only the rate of price rises, the psychological limits of price rises, that determine how long an equilibrium can be maintained. Hospitality and tourism are all dependent on the people who use their services. Breaking this down, and the opportunities that the market currently has, the situation is clear. The relatively high level of fuel prices maintained over the long term can have a major impact on prices. How this is handled by the consuming market, in this case the tourism and hospitality public, can only be seen in individual terms. It is impossible to generalise in this situation.#
