Hospitality Industry: Interrelationships, Integration, and Development Plan

This assignment explores the intricate relationships between the hospitality and travel and tourism industries in the UK. It delves into the composition of both sectors, highlighting key businesses and services. The impact of integration, particularly through mergers and acquisitions, on the hospitality industry is analyzed, examining its effects on quality, economies of scale, standardization, and globalization. Finally, a comprehensive development plan for a coffee shop and restaurant is presented, encompassing market research, target market identification, location selection, funding strategies, product and service offerings, licensing requirements, design considerations, and operational strategies.

Contents
INTRODUCTION................................................................................................................................2
TASK 1..............................................................................................................................................3
THE INTERRELATIONSHIPS BETWEEN HOSPITALITY AND WIDER TRAVEL AND TOURISM
BUSINESSES..................................................................................................................................3
TASK 2..............................................................................................................................................8
UNDERSTAND THE IMPACT OF INTEGRATION ON THE HOSPITALITY INDUSTRY........................8
TASK 3............................................................................................................................................11
DEVELOPMENT PLAN FOR THE HOSPITALITY INDUSTRY INCLUDING RATIONALE STUDY........11
STAGE 1 – DEVELOPMENT.....................................................................................................11
STAGE 2 – DESIGN..................................................................................................................13
STAGE 3 – OPERATIONS.........................................................................................................14
CONCLUSION.................................................................................................................................15
REFERENCES...................................................................................................................................16
1

INTRODUCTION
Many of the industries are contributing to the revenue generation for the UK's economy and
hospitality industry is playing an important role in this along with the travel and tourism
industry. The hospitality industry is offering many services like house-catering, accommodation,
food services, camping etc. that all are playing important role in serving the international and
domestic guests that are visiting in the UK for different purposes.
In this assignment, a discussion has been made on the different services that are offered to the
customers under the hospitality sector and tourism sector, as both of them are playing an
important role in serving the people (Mok, Sparks and Kadampully, 2013). Business travel,
Visitor’s attraction, Exhibition and educational conferences etc. are some of the services that
are common in both the industries. Integration plays a very important role in the hospitality
industry can this topic has also taken into consideration in this assignment, with the help of
some big merges and impacts of them on the hospitality industries like Marriot International.
The company's rationale has also been discussed in this assignment while choosing a business
project and the entire operational structure of the company is also been discussed while
completing the business projects.
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TASK 1
THE INTERRELATIONSHIPS BETWEEN HOSPITALITY AND WIDER TRAVEL AND
TOURISM BUSINESSES
Role of the hospitality industry within the travel and tourism sector
Several businesses are served by the hospitality industry that is playing the same role in that of
the travel and tourism industry in the UK. Exponential growth has been registered by the
hospitality industry in the past few years that results in the rise of many advantageous factors
in the country. This is because both the domestic and international companies are dedicated to
investing money in the hospitality industry due to the identification of profits that can be
obtained in the industry.
Approximately, there are 127,000 businesses in the UK that are working in this industry and
also providing job opportunities to 3 million individuals of the country. This information is
stated from a report that has been made by the British Hospitality Association (Nickson, 2013).
Hospitality industry’s composition
Following are some of the businesses that come under the hospitality industry and contributing
to the economic development of the UK (Walker, 2016):
Hotels
As per the maintained records and analysis of the UK’s statistics, there are approximately
22,000 large and small hotels that are offering their services to the customers. As per these
services, they are rated on a scale of 1 to 5 stars, which also shows the standard and position of
these hotels in the UK’s business market. The hotels that are listed in the category below 3-star
are serving customers with the decent type of food at minimal and affordable prices and hence
average accommodation facilities are provided to the customers by these hotels. On the other
hand, the hotels that are listed above 3-star are providing high-quality services to its customers
and here premium pricing is focused because of the luxury services and facilities.
According to the observation, it is concluded that the visitors who prefer spending time outside
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as in visiting the places of the country; prefer 1 to 3-star hotels, on the other hand, the tourists
that are spending more time in the hotel prefer high-class hotels that are rated on the scale of 4
or 5-star.
Breakfast, room-cleaning services, proper accommodation etc. are some of the amenities of all
4 and 5-star hotels that are fully utilized by the customers.
Restaurants
As per the British Hospitality Association, there are around 16,000 restaurants in the UK that
include different types of services to the customers. Coffee shops, food establishments, cafes,
dining halls etc. are some of the types that come under this category (Cooper, 2013). A variety
of food services are provided by these restaurants that cover Italian, Chinese, Indian food items
on the priority list. Musical performances by different artists are the main attraction at these
restaurants that comes under the leisure activities that are offered by them. Different types of
coffee houses with innovative concepts are found at every single turn of the city and affordable
snacks are provided at very affordable prices (Brookes and Altinay, 2015).
Pubs, Bars and Nightclubs
These are very popular among the young generation people they are the one who is engaged at
a high rate. There is a rush in all the pubs and nightclubs at every weekend. Cocktails, alcoholic
beverages, snakes etc. are in UK’s bars and clubs along with music and dancing facilities. There
is a great increase in a number of pubs and clubs in the few years as the demand is high and
many of the entrepreneurs are investing in this area as per their interest and concern.
Contract food service providers
They are used and preferred by the people of a particular location and at a particular event.
Food serving agencies, home-catering etc. is some of the examples that can be considered
under this category that are providing food items to a selected party at a special event and
according to their choices. These events can be a conference, small house parties, birthday
celebration etc. in which a small number of guests have to be served. These service providers
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are using mobile catering services in which food is prepared at their place and then delivered to
at the place of the event.
Tourism sector’s composition
Thomas Cook, Trailfinders, Insight vacations, Cost Saver etc. are some of the tour operating
companies that are serving in the tourism sector. All the facilities like, accommodation, food
services, transportation etc. are offered to the customers in a combined tour package, which
also covers the sigh-seeing facilities (Orchiston, Prayag and Brown, 2016). Following are the
services that are provided in the travel and tourism sector are listed below:
Accommodation services
It is the base of travel and tourism industry as many of the customers are visiting various places
and the need to provide them proper accommodation facilities is very important. All the tour
operators and travel agencies are having a contract with the different hotels for providing
better services to the visitors (Suhartanto, 2015). The visitors who have to spend less time in
the hotels then they can prefer budget and bed-breakfast hotels in the UK. Other than that,
there are many 5-star hotels that are offering luxury accommodation services and proper food
to the customers who want to stay in hotels for a long period of time.
Sightseeing
It includes the sight-seeing of various cultural, historical and interesting places and the tour bus
operators are the one that is responsible for providing these services to the international and
domestic customers. Big bus tours and City sightseeing are some of the examples under this
category. Pre-recorded or live commentaries are offered to the visitors that is helpful for them
to clear the purpose of the visit to the pace during the trip. Hop on-Hop off kind of services are
provided to the visitors that will make them able to leave and catch the bus from any of the
buses stops as a pas has already being provided to them at the time of registration.
Travel services
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Bus, taxes, cars, cabs etc. are some of the facilities that are provided to the tourists in order to
travel from airport to hotels and to some other locations also. Tourist operators are also
providing car rental services to the tourists in which they have to pay according to the hours
they need the car (Swarbrooke and Horner, 2012). These services are provided at the airports,
and tiring city areas, apart from this, the people can also book their cars on the online sites and
applications.
Travel guides
Guides are offered to different tourists as many of the international tourists are visiting the UK
for the first time and they need proper and detailed information about the places. These tour
guides are offered by many of the travel agencies and hotels in order to serve their customers
with live commentary of the guide that will make their visit more interesting (Eriksson, 2014).
Interrelationships between hospitality and travel and tourism
All the above composition of hospitality and tourism industry are overlapping at a high rate and
from the above observation, it can be stated that the hospitality industry is providing support to
the travel industry in meeting its demands and services. Following are some of the services that
show their interrelation with each other (Cook, Hsu and Marqua, 2014):
Figure 1: Interrelationships between hospitality and travel and tourism
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[Source: Ignite Economics, 2017]
Visitor’s attraction
They are popular places where the tourists are visiting at the time of their travel to the UK.
Sight-seeing services, restaurants etc. are some of the services that are provided under this
category. Tourist guides and travel services are also offered to the visitors in order to visit
different places in the UK.
Aviation
These services belong to the tourist sector, as all the big travel operators such as TUI groups
possess their own airline services. Online bookings can be done by the customers while
travelling to different countries on their personal mobile applications and at the websites also.
Theme parks
Entertainment activities such as adventurous rides, water rides etc. are offered by the theme
parks under the tour packages by the tour operators. These are the additional services and
attract the travelling group the most (Law, Buhalis and Cobanoglu, 2014). Alton Towers,
Warwick castle etc. are some of the theme parks in the UK.
Business travel
Conferences, official meetings, get-togethers etc. are planned by the corporate companies and
then contract services providers are providing services to them. These business meetings and
conferences are held at different hotels and big restaurants according to the choice of the
people (Everett and Slocum, 2013).
In this way, it can be concluded that both hospitality and tourism industries are linked with
each other and helpful in providing services to the customers.
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TASK 2
UNDERSTAND THE IMPACT OF INTEGRATION ON THE HOSPITALITY
INDUSTRY
Introduction
The main aim of this report is to analyze the implications of integration to the hospitality
industry and a discussion on the effects that it has made on the hospitality industry in the last
few years (Veal, 2017).
Integration in the Hospitality industry
The concept of integration in the hospitality industry can be defined as when one company is
buying the products and services of another company or trying to buy the other company which
is small in size when compared to them (Kasiri et al., 2017). There are two types of the
implication that is possible in the hospitality industry:
Horizontal integration
In this type of integration, one company acquires the other within the same type. It is simple to
merge up with the other companies as they employees are already aware of the operations and
their roles and thus need of special training is less. The main purpose here is to diversify the
products and services, to limit the competition and to increase the customer base while
reducing the cost of services and by offering a high rate of products to them (Gordon and
Maurice, 2015).
For example, in the year 2016, the Marriott hotel has an acquisition with Sheraton. McDonald's
has also acquainted the Burger Kings which is one of the popular examples of horizontal
integration.
Vertical integration
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In this type of integration, only the main focus is to have control over the manufacture, delivery
and supply chain of a particular company. The main purpose here is to enhance the new
distribution services, to limit the cost production ad to reinforce the stock chain of a company
(Gordon and Maurice, 2015).
Apple can be considered as the best example of this integration as it is responsible for all the
operations that are taking place in the company. Amazon announced to buy organic grocery
chain Whole that worth $13.7 billion, in the year 2017.
Impacts of integration in the hospitality industry
Quality improvement
With the help of integration and mergers, the quality of products and services are increased at
a high rate. This is because the employees of the small hotels are gaining knowledge and their
skills are also improved while working with the bigger hotels of the same type. On the other
hand, in vertical integration, the customer base of the bigger hotels is increased as the small
businesses are having large customers range (Molina-Azorín et al. 2015). Different training and
development programs are held at the Marriott hotels in order to motivate their employee to
work with changing the environment.
Economies of scale
This can be achieved by integration as the hotel or retardants are now able to reduce the cost
of its products and services because it had already acquired the hotel which is in competition
with it. As a result, the operational cost can be easily limited as both the companies have
already merge-up with each other.
Standardization
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Services of the hotels are easily standardized by merging and acquiring with the other hotels,
hence better customer services can be provided by the hotels at nominal rates and a
professional working environment can be developed at the workplace (Molina-Azorín et al.
2015). The tourist greeting services are also introduced due to the acquisition process and
better customer dealing can also be achieved at the working place, which increases the
standard of the hotels and restaurants.
Increased globalization
Marriott hotels are providing services in the world at high quality as many mergers and
acquisitions are held at the hotels, due to which a large amount of capital is generated by the
hotel. This is only possible with the help of integrations that the hotel have made with the small
hotels and restaurants all around the world (Bernardo et al. 2015). On the other hand, with
increasing globalization, the barriers of business are also reducing to a great extent. There is a
reduction in the independent businesses as the benefits are integration have been identified by
many of the hotels and restaurants in the UK’s hospitality industry.
Conclusion
The merging, acquisition and integration helped the big hotels like the Marriott Hotel to
increase its production scale, a number of customers, to become independent and to provide
the best services to the customers by providing the best services.
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TASK 3
DEVELOPMENT PLAN FOR THE HOSPITALITY INDUSTRY INCLUDING
RATIONALE STUDY
STAGE 1 – DEVELOPMENT
CONCEPT
The current development plan will be going to highlight a coffee shop and restaurant. The
coffee shops are always seen as the best place for spending some free and special time with the
friends, colleagues and family members. This plan is created to develop a place where one can
comfortably sit, enjoy and even do their work at laptops with the best-made coffee and snacks
from exclusively selected roasted coffee beans from Africa.
This business of hospitality sector for serving the world which will enhance the standard of the
coffee shops and serve people with the best place to sit. For this coffee shop, all the
infrastructure, designs and sitting arrangement will be developed by a high-class interior
designer with many trendy things and a very nice ambience. In addition to this, the products
and services were going to be little automatic so that tasks can be made easier and beneficial
for the management and owners of the coffee shop (Storey, 2016).
MARKET RESEARCH
Establishment of a business requires knowledge of the whole industry, market conditions and
business environments and the factors which influence the business management. Market
research for this coffee shop is conducted through Porter's five forces analysis and is described
below:
SUPPLIERS POWER – in the markets the major issues is regarding the powers of suppliers of the
raw products which are brought from the best farmers of coffee beans and has been roasted
with the high-tech machines to roast them evenly and take best aroma and taste from it. Sine
the business is completely dependent on the coffee from the different suppliers and hence this
should be maintained with proper business deals to reduce the costs for the restaurant.
THREATS OF SUBSTITUTES – in the markets generally there are variety of coffee shops for the
people to serve them and hence this threat is also a major threat to the coffee shop business
but this can be significantly reduced with more effective hospitality and catering service with
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little low-cost products and services and hence after gaining a good customer base can increase
the costs again to gain some profits (Dobbs, 2014).
BUYERS POWER – in case of opening a new coffee shop in the markets where there are already
several other business units to attract people, hence there should be some better strategies,
business development and the marketing strategies to reduce the buyer's power.
THREATS OF NEW ENTRY – this is a moderate power of the markets which affect the business of
present business in the restaurant industry of coffee shops at a place. Since there is a great
craze of the coffee shops and hence there is always a risk of having a new establishment which
attracts people.
RIVALRY – the development of the business is going to be a simple coffee and with the same
notion there are several businesses which compete with each other and hence creates rivalry
among each other. For this, there are some factors which can help in reducing the cases of
intense rivalry among different businesses.
TARGET MARKET
Here for the restaurant, significant development can be attained through another aspect which
is proper segmentation and targeting of the potential population so that the resources of the
management can only be implemented on the desired market segment and hence create a
better brand image in the markets. For the coffee shop, the major target segment is under the
age category of 18 – 40 years of age because these are the people who are likely to adopt new
things and get attracted towards the new units in the market. In addition to this, effective
management of the target audience and implied business resources will help in gaining better
profit margins.
LOCATION
The location of the coffee shop will be suitable if it is established in the areas of a city where
there is large office working population or near the offices so that people can come at their
lunch timings and enjoy the best coffee.
SCALE
This coffee restaurant is going to be a small-medium scale business with comparatively low
prices that the other coffee shops in the same market area. In addition to this, the suppliers and
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resource availability scales will only be according to the demand in the coffee shop and the
sales procurements.
FUNDING
The overall funding of the business will be brought from two areas where 50 percent share will
be given by owners and another half part by the bank as a loan which will help in maintaining
the costs and implement better strategies.
PRODUCTS AND SERVICES
Creating a menu for a new business should include some attractive dishes/snacks which can be
served with a hot and cold range of coffees. The major products are based on coffee with its
snacks and services will be provided to the customers in the form of catering and fine dining at
the coffee shop till late night every day.
LICENSING
For starting a business in the food and beverage industry there is a need to take the licensing
from the food governing authority of country so that all the products will be healthy and safe
for the people (Grunert, et al. 2010).
STAGE 2 – DESIGN
The development of the coffee shop in the areas where there are people who want to spend
the time and enjoy a great coffee will require a great ambience so that more people get
attracted towards the coffee shop. In addition to this, the coffee shop will have some extra and
separate zones for playing small indoor games. While the need to start a business will also
require a great and friendly culture to make loyal customers and a significant customer base.
This will also help in making a great brand in the city and hence the restaurant can grow further
and maintain the successful making of the brand (Chesbrough, 2010).
The coffee shop will be more effective and attractive if the designs in the interior and exterior
are more attractive and give a local feel to the people which is an essential aspect to give better
hospitality feel to the people. All the functions of the coffee shop would be effectively managed
by the business owner and there should be at least 5 skilled people who know how to operate
the coffee machines, handle people and ethically force them to experience different coffee and
snacks at the shop. This all the tasks will efficiently help in gaining a good name in the market,
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remove the customer flaws if any, support better market positioning skills with individual
customer service facilities for the sustainability of the business.
STAGE 3 – OPERATIONS
Recruiting the people with best skills will help in proper development of the business with their
personal share in the business making and hence the business owner should hire people with
completely ethical process and give a better job opportunity to the capable people. Here, for
this functional area, there will be no HR department like other bigger firms, but these tasks are
directly conducted by the business owner and the associated management. Generally, for
working in a coffee shop there is a requirement of better communication, customer handling,
hospitality and catering skills so that the coffee shop will be effective in their business for long
and a significant sustainable term.
In addition to this, the coffee shop will also have some more vacancy for around two or three
people at the season time so that services can be provided effectively without degrading the
management of the shop to reduce the staffing related issues at the time of seasonality.
Moreover, this is not it there is a need of handling different cultures in the shop among both
the management and the customers to avoid any case of conflict among them. For this, they
can impose some effective policies and procedures for staffing and management and maintain
customer social responsibility at the place (Storey, 2016). At last, the promotional and
marketing strategies should be implemented in such a way that most of the aspects involved in
the marketing mix can be explored and henceforth amended in better ways. Since the
marketing mix also includes one of the most important factors which is the price of the
products and services. In addition to this, the pricing strategies should be developed for a
sustainable development of the coffee shop rather than just for gaining profits from the
business.
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CONCLUSION
The hospitality industry is one of the fastest growing industries of the economies which is
serving people all around the world. The assignment has highlighted the relation of the
hospitality industry and the travel and tourism industry first and it has been evaluated that the
roles both play in growing the economies to create a better presence and value of the whole
nation in the globe. In addition to this, it has been found that the impact of the integration of
the hospitality industry with the other business is very vital for the development of the
countries. At last a development plan is generated for a coffee shop which is going to establish
soon and wants to attain better and sustainable growth in the markets successfully.
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