Advanced PAPER 1: Markets and how they work

Please check the examination details below before entering your candidate information Centre Number Candidate Number Pearson Edexcel Level 3 GCE Wednesday 15 May 2024 Morning (Time: 2 hours) Economics B Paper reference 9EB0/01 Total Marks Instructions • Use black ink or ball-point pen. centre number and candidate number. Answer the questions in the spaces provided – there may be more space than you need. Information • The total mark for this paper is 100. – use this as a guide as to how much time to spend on each question. Calculators may be used. Advice • Read each question carefully before you start to answer it. • Check your answers if you have time at the end. Turn over P80957A ©2024 Pearson Education Ltd. F:1/1/1/1/ Extract A Answer ALL questions. SECTION A Read the following extracts (A–E) before answering Question 1. Write your answers in the spaces provided. TUI Group lose market share to Jet2holidays The TUI Group (TUI) has finally responded to being overtaken by Jet2holidays as the UK’s largest tour operator. TUI Chief Executive Sebastian Ebel said: “We want to be the market leader not only in numbers but also in quality. We want to grow stronger than our competitors.” 5 The firm aims to take market share from rivals by broadening its product offering and looking beyond its traditional core package-holiday customers. It is targeting the larger and higher growth segments of the leisure market, such as accommodation only, flight only, car hire, tours and experiences. Sebastian Ebel referred to these potential new customers as ‘energised adventurers’ and 10 ‘travelistas’. Energised adventurers are older, confident, more affluent and adventurous holidaymakers interested in culture and exploration. Travelistas are younger, independent and adventurous travellers who spend less on a holiday but travel more often. TUI reported record holiday bookings for summer 2023 and 2024 now that global travel restrictions have been lifted for consumers. 15 (Source: adapted from gap-thomas-cook-left-says-tui-chief) Extract B Statement of comprehensive income of TUI Group Q3 2023 and Q3 2022 Q3 2023 (€m) Q3 2022 (€m) Revenue 5 286.0 4 433.2 Cost of sales 5 018.4 4 313.4 Gross profit 267.6 119.8 Operating profit/(loss) 52.5 (331.2) (Source: adapted from: ir-news/) Extract C TUI hails return to profit but warns of €25m additional costs from Rhodes’ wildfires The package holiday operator TUI has enjoyed its first profitable April to June since before the global health crisis but warned that it expects €25m additional costs from last month’s wildfires in Rhodes. TUI had to evacuate 8,000 customers which represented 20% of its customers on the island. 5 “The financial impact of the wildfires in recent weeks covering cancellations, customer compensation, repatriation flights and welfare costs has added €25m additional costs to our full year 2023 results,” the company said. TUI said that Rhodes accounted for about 5% of its summer holiday offering this year, and while bookings had been affected straight after the wildfires in Rhodes and southern 10 Europe, they had recovered quickly. It predicted summer bookings would still be 6% higher than last year. (Source adapted from: Extract D (%) 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 UK Interest (base) Rate (%) January 2022 – August 2023 Base Rate 5.25% Jan Mar May Jul Sep Nov Jan Mar May Jul 2022 2023 (Source: adapted from bank-rate) Extract E UK travel and tourism to create 700,000 jobs over next decade The UK travel and tourism sector is highly fragmented and firms within this sector range from large tour operators such as TUI and Jet2holidays to smaller independent hotels, bed and breakfasts, travel consultants and leisure activities. According to the World Travel and Tourism Council, the UK’s travel and tourism 5 contribution to GDP is forecast to grow at an average annual rate of 3% between 2022–2032. It is set to reach more than £286 bn or 10.1% of the total economy in 2032. The UK travel and tourism sector is expected to create nearly 700,000 new jobs over the next decade and is a major employer in the UK. The most popular tourist destination in the UK is the capital, London. In 2022, there were 10 15.6 million international visitors to London who spent around £14.2 bn. In England, Manchester is the second most visited city after London. Manchester has amazing cuisine, an assortment of museums and incredible nightlife. Its number of overseas tourists is rising by 10% a year. (Source: adapted from: 70000-jobs-a-year-over-next-decade) 1 (a) Explain one reason why an increase in market share might be an important business objective for TUI.