Impact of Tourism Development on Local Economy

The assignment discusses the impact of tourism development on local economies, highlighting both positive and negative effects. It reviews various studies and research papers on the topic, including books, journals, and online resources. The document also touches on the integration of hospitality firms, employment opportunities, and customer support in the tourism sector.

HOSPITALITY PROVISION IN
TRAVEL & TOURISM SECTOR

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1.1 Interrelationship between hospitality and wider travel and tourism businesses...............3
TASK 2............................................................................................................................................6
2.1 Implications of integration to Hospitality Industry..........................................................6
2.2 Effect of integration on hospitality business....................................................................8
TASK 3............................................................................................................................................9
3.1 Rationale for a selected project clearly justifying the decision linked to target market...9
3.2 Plan for hospitality business ..........................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Hospitality industry is an important part of economy which has provided support in
achieving high revenues and brand equity among international visitors. They together provide
wide variety of services and amenities to attract large number of travellers from overseas nations.
Hospitality industry provides facilities such as transportation, accommodation, food and other
important facilities in order to meet continuous changing requirements of customers. Present
report is based on the analysis of interrelationship between hospitality and broad travel and
tourism businesses. Case study has been considered to determine the implications of integration
between organizations in the hospitality industry. Further, various effects of merger and
acquisition have also been discussed with an aim to provide clear understanding of impact of this
integration. In addition to this, rationale for establishment of new small size hospitality business
has also been discussed. At last, operational requirement for establishment of new hotel and
restaurant has also been discussed in this report.
1.1 Interrelationship between hospitality and wider travel and tourism businesses
Hospitality business is considered as the most important service providers to travel and
tourism sector. High growth and revenue has provided a major influence on the business. In
present competitive scenario, an enterprise is likely to achieve high growth and recognition
across countries. For this, they are making continuous efforts to identify and meet continuous
changing requirements of customers. In case of hospitality industry, clients are continuously
spending their major time at their hotels especially when they considered it to be as guests
which would like reaping the beneficial aspects which are being provided at the hotel where
they are staying, especially in accordance with they are staying especially in regard to the
premium prices they are paying. In this context, as junior consultant there are various service
have been discussed which clearly determine relationship between hospitality and wider business
of travel and tourism sector.
Globalization implies to dependency of different hospitality and travel sector companies
regulating their business operations in different countries. In present scenario, companies are
widely dependent upon each other fort getting clients. Travelling to other countries has also
become strength of company that affects their business. Companies are more emphasised
towards improvement of amenities to influence tourist because travelling to other countries has
3

become a trend that people needs to follow and achieve their objectives. Travellers are more
likely to take experience of luxurious and attractive amenities which attract tour operators and
achievement of business objectives. High growth and recognition between organisations have
provided a major impact of business opportunities.
There are various important services provided by hospitality companies which are mentioned
above:
 Packaged holidays: In accordance with this, functions of hospitality industry is very
important because hotels that have their inclusion within various holiday plans are
finally based on prices which have been paid by customers in accordance with packages.
When a visitor has opted for low budget package, then it will not likely to take
experience of 5 star accommodation or other services. Further, hotel is also having
special contracts with the individual travel agents which are providing exclusive rates for
their establishment in return of effective and confirmed flow of customers from the side
travel agents. In UK, hotels have their coordination and integration with tour operators
which provides proper and low rates according to choice of customers.
 Tour packages are designed by travel companies by coordinating with hotels which
provide them accommodation service for their customers on low prices. For example:
Make my trip has a wide connection with hotels and other service providers in overseas
nations. TUI group is also an international tour operator regulating its business in
different countries. They are also associated with different hospitality companies. These
attractive packages will allow company to attract wide customers from overseas nations.
 Aviation: Findings states that the success of aviation industry is also widely based upon
the availability of accommodation in hotels. When there are no accommodation facilities
in hotels then there are wide chance aviation companies for facing losses in their business
operations. It is considered be a effective and systematic scenario, with respect to airline
companies which fly to some specific small destinations such as Malta, where are chance
of occurring some circumstances in respect of availability of accommodation and other
services. Hotels also have their inter link with Aviation companies and they always focus
on providing attractive service as per requirements of their customers.
 Business travel: Business class people who used to travel in different countries often
selected those hotels which provides various facilities such as internet facility, luxurious
4

environment, Board rooms and 24 hours services. These individual would also likely to
indulge in some attractive and leisure activities such as spending their time in getting
relaxation within pool and Spa services. Findings state that business travel in many
countries has become affordable for individual in accordance with various business
enterprises due to availability of low budget airlines. Apart from this, there are some
organisations which provide more focus on increasing their status in market and for this
they would likely to provide their business class facilities to their employees. Therefore,
hotel and aviation companies have also provided focus on development of business class
service their hotels and flights. For example: growing tourism countries like India and
China are considered as widely popular destinations for business travel. Therefore,
growing hospitality industry organisation has provided their more focus on expansion of
business in these countries. There is wide growth within hospitality and other industries
at these two emerging destinations, which is why international enterprise does not want to
lose the opportunities for business expansion.
 Conferences: These exhibitions and conferences are usually having wide importance on
the domestic and international level in tourism sectors. There are large number of
organisation who prefers to organise their business conferences and seminars in hotel
where they will get food and accommodation facilities to their employees and guests. In
order to attract these companies, Hotel always provides their focus on development of
various facilities in their premises and tends to attract qualified employees which are able
to provide quality service to their customers.
 Visitor’s attraction: Hospitality sector also plays an important role in attracting wide
range of customers from different parts of the world. These played an important role in
attracting customers in order to provide super relaxing and comfortable business
environment which has been considered as necessity for every accommodation service
providers. There are many factors of this industry such as luxury hotels, resorts and
cottages attract various business class people and their family as they require spending
their holidays at a comforting place to relax from their daily life. This trend led to an
increase in travellers and their demands for tourism. Further, it will help hospitality
industry enterprise to attain ample profits and achievement high growth.
5

TASK 2
2.1 Implications of integration to Hospitality Industry
As per the given scenario, various integrations have been taken place within hospitality
industry between international hotel as well as tour operators. These tour operators have
achieved high growth in market due to economic development of country.
There are various implications which have been taken place within the hospitality industry and
are mentioned below:
 Branding: It is analysed as a process which is involved in the creation of unique name
and image for product in the mind of consumer's perception mainly through
advertisement campaigns. This is essential that service provided by company will remain
same at all other places, anything less would not be acceptable and provide influence on
reputation (Law, Buhalis and Cobanoglu, 2014).
Integration of hospitality business enterprise have summoned their brand name in
market and provided influence on overseas nations to purchase products and services of
organisation. It is also essential that customers will possess the capabilities in order to
relate themselves with other brands and be able to identify target customers. For example,
while booking of accommodation within Hilton Hotel or Marriott Hotel, client will
always have a perception of getting luxurious services and will not accept anything
different provided by hotel other than expected services.
These are considered to be posh brands that cater which are recognized in market for
their luxurious or lavish accommodations (Smith and Puczkó, 2014). Further, Sheraton
Hotel has been part of Starwood Hotel and Resorts. They also aim to build customers
loyalty by providing quality of service after acquisition of hotel in different countries. For
example, when Marriott International made an acquisition over Starwood Hotel and
Resorts in other countries; it is really important that the services provided in that hotel
should be same as in any Marriott International. This is considered as the power of brand
name and values which has been earned by Hilton Hotel. In order to maintain brand
image they need to ensure that people will feel and experience similar service like any
other unit of Marriott hotel.
 Market Control and Integration: Some specific tour operators of UK have also
purchased hotels in overseas nations for increasing their presence globally as well as
6

productivity. Through this, they control their hotel rates that will assist them to generate
more effective and low prices holiday packages for their clients while having an increase
in their sales.
These kinds of activities tend to raise benefits of an organisation in market. Further, it
will also create adverse effects on small business enterprises in this sector (Gursoy and
Sandstrom, 2016). Through this acquisition, small size enterprise faced challenges in
carrying out business operations. It is also avoidable that staffs and their families will
face sufferings because bigger organisation will take control. In major circumstances,
continuous growth of internet has limited the profitability of forward integration
especially in respect to holiday packages. Further, rise of active business packaging
provided an important threat to these types of organisations and tour operators within
UK are closer down their retail outlets and focusing upon selling of their products and
services through internet. Further, clients are also benefiting from significant risks to
society from the lower costs over the internet; this will pose a significant risk to the
society as people facing unemployment problem.
 Increased Globalisation: After some profitable expansion of business in its home
country, hospitality organisation often needs to capture international markets. Further,
globalisation has created wide dependency of organisation towards each other for getting
customers and revenue generation (Lu and Stepchenkova, 2015). For example: In UK,
hotel is highly dependent upon international tour operators for getting international
visitors through which they will also generate profitability. Various features of tourist
destinations have attracted people towards travelling to different countries. For example
Hilton Hotel has also expanded their business in other countries after removal of trade
barriers and getting wide recognition from customers.
Some important benefits are also associated with process of integration which is as mentioned
below:
 Cost of transportation has been reduced which minimized the risk associated with
tourism.
 It also provides support in identification of overall obstacles to influence in the path of
growth.
7

 Cost that is needed for management of whole travel activities has also been minimized
which leads to creation of high interest towards hospitality industry (Litvin, Goldsmith
and Pan, 2018).
From this integration of hospitality industry, company have achieved an ability to grow
and also effectively manages its working in order to deliver complete and luxurious experience
to every customers and developing strategies to attract more customers.
2.2 Effect of integration on hospitality business
Integration is the process of attaining close and seamless coordination between several
organisations, groups and departments. It is also considered as merger of companies resulting
into a new legal entity. As per given case scenario, there are various merger and acquisition that
took place within travel and tourism sector in UK which is considered as reliable and effective
for economy in order to attain growth. .
Mainly there are two kinds of integration between hospitality industries such as:
 Horizontal Expansion: when the business enterprises will gain high competitive
position in market, they tend to expand their operation in other countries for expansion of
business (Buhalis and Foerste, 2015). They are also having desire of diversify their
services and various essential products by suing different measures such as removal of
competitors from market, economies of scale and achievement of wide accessibility
towards new customers.
 Vertical Integration: It is also considered as important strategy where the organisation
will acquire business operations within same amount of production. In hospitality sector,
companies used this strategy to reduce their cost of production and hence it will increase
the efficiency of organisation.
Some of key influence of integration of hospitality business is mentioned below:
 Economies of Scale: when integration between international hotels occurs, then it will
result in significant reduction of operating cost. When any hotel will be acquired by
Travel Company, there will be increased cost associated with investment (Battour and
Ismail, 2016).
In this scenario, integration has allowed tour operators to reduce their reliability
on other accommodation service providers because the functional aspect will be taken
care within parameters of any enterprise. Moreover, having appropriate strategies will
8

enhance the market share of enterprise and provide competencies to attain expected
profitability.
 Standardization: It is considered as a methodology which tends to consume time,
especially within hospitality industry having number of variables. Moreover, business
processes that completely transformed can most specifically be normalized, but it has
been considered as very challenging for standardization of human elements even when it
is not possible (Walker and Walker, 2016). In this, standardization can also be
accomplished by hotels but there are some limitations. Further, there will be always an
existence of concern which is associated with transformation. Since different departments
within enterprise are carried forwards by various individuals who will posses their own
standards.
 Quality: Further, there is no confirmation that integration of this hospitality business will
tend improve quality. For example, Intercontinental Group has acquired Kimpton Hotel
and Restaurant for 430 million. After acquisition, quality and service in hotel would be
similar with products and services which are served in any Intercontinental Hotel. It has
also been made assess towards the effective downstream channel of distribution.
TASK 3
3.1 Rationale for a selected project clearly justifying the decision linked to target market.
Project Plan has been made for establishment of new hotel and restaurant business.
Rationale is analysed as structure that clearly determine the steps which are taken by individuals
for establishment of new business. In this context, rationale for new restaurant and hotel business
has been developed and mentioned above:
Idea: Plan has been generated for establishment of hotel cum restaurant business. It will be a
small-scale enterprise and provide service for the people of home country and tourist. (Yüksel,
2017).
Further, it will be located prominent tourist destinations within UK and there will be high
demand for business from continuously growing number of customers which are continuous
visiting to country. Purpose behind this is likely to explore and deliver services at low cost for
attracting more and more customers. Further, this will intend to determine the customers at low
cost for attracting more number of customers.
9

 Market Research: In order to understand the requirement of customers and current
trends in market for hospitality business, individuals needs to carry out market research.
It involves taking feedback from particular target population in country. In this context,
targeted customers for hotel and restaurant business will be middle class customers who
tend to buy budgeted packages and products at competitive prices. For carrying out
market research, both qualitative and quantitative method will be used to gain services
across countries (Schuckert, Liu and Law, 2015). Effective planning related to business
will also be accomplished properly. Interviews will be done from respondents to gather
information about their requirements. It provides influence on decisions on amenities
and facilities that needs to be included in services of hotel and restaurant.
 Target Market: For new hotel and restaurant business, middle class customers and their
family have been targeted who purchase high quality products at optimum prices. Middle
class customer usually have perception of buying price services to fulfil their
requirements. They tend to compromise with quality but provide more important prices
charged by hotel for providing services.
 Target Business Location: Prominent tourist destinations in London will be selected for
establishing new business so that international visitors get attracted towards countries.
Products and services also promoted at tourist destination to influence visitors so that
they will get influenced to make booking in hotel (Remington and Kitterlin-Lynch,
2018).
 Financial Resources: These are major requirement for establishment of business and
needs to attain through various sources. For new business, financial resources will be
achieved from sources such as angel investors, financial institution and bank loans.
Further, personal capital will also be used to establish and regulate business operations.
 Licensing: Every new business requires license for regulation of national and
international business operations. Licences will be taken from food inspector or authority
in order to carry out business operations ethically after providing them information about
business plan.
10

3.2 Plan for hospitality business
For development of new hotel business, a plan has been made which clearly defines
requirements of various aspects. Plan involves some steps that needs to followed for
development of new business such as:
 Development Stage: It is considered as initial stage of establishment of business that
involves introduction of new ideas (Smith and Puczkó, 2014). Restaurant will be located
at tourist destination within UK because there is huge demand for accommodation across
tourist destinations. It involves determination of business market research which was
carried out to gain information about requirements of customers and analyse prices which
are suitable for them to buy products. Middle class people and their family members will
target who have desire to take experience of new and attractive products and services at
low prices. These customers will usually get attracted towards new and innovative
products for getting experience but they usually aim to buy products at low prices. This
will assist in finding demands of products and services that is planned for being offered at
reasonable price.
 Design stage: This stage involves taking strategic decisions and policies that are related
with ambience and designing hotel infrastructure which also tends to raise assumption
which is achieved by managers to attract visitors at workplace. Different departments of
hotel will be analysed that would be established for regulation of business operations
effectively (Gursoy and Sandstrom, 2016). Attractive accommodation design and
preventative stage s have been developed in order to achieve high recognition from
customers. Qualified employees will also be hired through recruitment and selection
procedures which provide support in accomplishment of business objectives. Restaurant
will also be placed at tourist destination for attracting international visitors. Appropriate
quality products with extra services will be offered to customers. For retaining customers,
specific discounts for purchase of products will be provided.
 Operation stage: It involves taking decision related to functions and responsibilities
which are carried out within enterprise(Lu and Stepchenkova, 2015). Qualified chefs will
also be hired to make variety of products from different cuisines. Hiring of appropriate
number of employees will help in management of business operations and maintaining
quality of products and service offered to customers. Appropriate training will be
11

provided staff for completion of different task and ways to maintain effective relationship
with customers.
CONCLUSION
In this report, it is concluded that services of hospitality and tourism sector has been
collaborated with each other. It increased the range of tourism sector and also provided growth.
Due to this, people are now getting more services and benefits. Along with this, high amount of
revenue has been generated by various scholars in order to attract customers. Integration of
various hospitality firms have led to increase in employment opportunities, increase in number of
international visitors. Increase in customers will provide support to companies in analysis of
requirements and improvement of products. Various important amenities have been developed
by hotels to improve business operations.
12

REFERENCES
Books and Journals
Cook, R.A., Hsu, C.H. and Marqua, J.J., 2014. Tourism: the business of hospitality and travel.
Boston, MA: Pearson.
Walker, J.R. and Walker, J.T., 2016. Introduction to hospitality management. Prentice Hall.
Xiang, Z., Magnini, V.P. and Fesenmaier, D.R., 2015. Information technology and consumer
behavior in travel and tourism: Insights from travel planning using the internet. Journal of
Retailing and Consumer Services, 22, pp.244-249.
Yüksel, A., 2017. A critique of “Response Bias” in the tourism, travel and hospitality
research. Tourism Management, 59, pp.376-384.
Schuckert, M., Liu, X. and Law, R., 2015. Hospitality and tourism online reviews: Recent trends
and future directions. Journal of Travel & Tourism Marketing, 32(5), pp.608-621.
Becker, E., 2016. Overbooked: The exploding business of travel and tourism. Simon and
Schuster.
Remington, J. and Kitterlin-Lynch, M., 2018. Still pounding on the glass ceiling: A study of
female leaders in hospitality, travel, and tourism management. Journal of Human
Resources in Hospitality & Tourism, 17(1), pp.22-37.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Law, R., Buhalis, D. and Cobanoglu, C., 2014. Progress on information and communication
technologies in hospitality and tourism. International Journal of Contemporary Hospitality
Management, 26(5), pp.727-750.
Smith, M. and Puczkó, L., 2014. Health, tourism and hospitality: Spas, wellness and medical
travel. Routledge.
13

Gursoy, D. and Sandstrom, J.K., 2016. An updated ranking of hospitality and tourism
journals. Journal of Hospitality & Tourism Research, 40(1), pp.3-18.
Lu, W. and Stepchenkova, S., 2015. User-generated content as a research mode in tourism and
hospitality applications: Topics, methods, and software. Journal of Hospitality Marketing
& Management, 24(2), pp.119-154.
Litvin, S.W., Goldsmith, R.E. and Pan, B., 2018. A retrospective view of electronic word-of-
mouth in hospitality and tourism management. International Journal of Contemporary
Hospitality Management, 30(1), pp.313-325.
Buhalis, D. and Foerste, M., 2015. SoCoMo marketing for travel and tourism: Empowering co-
creation of value. Journal of Destination Marketing & Management, 4(3), pp.151-161.
Battour, M. and Ismail, M.N., 2016. Halal tourism: Concepts, practises, challenges and
future. Tourism management perspectives, 19, pp.150-154.
14