This chapter explores the business environment in which tourism and hospitality marketers and their organisations operate. It begins with a review of the internal environment. Here tourism and hospitality organisations have a much stronger degree of influence. The internal environment consists of the company itself as well as its resources, its processes, and the policies it uses to achieve its goals. Next the chapter examines the performance environment, which concerns the consumers, suppliers, intermediaries, and competitors. Further, this chapter covers the external environment that affects all individual tourism and hospitality organisations. These include the political, economic, socio-demographic, technological, ecological (natural), and legal factors. The main national, regional, and global tourist flows are then analysed. Finally, the environmental scanning as a method for responding to these factors is considered.