Hospitality Provision in the Travel and Tourism Sector: Interrelationships and Integration

This report explores the intricate relationship between the hospitality and travel and tourism sectors, examining the role of hospitality in facilitating tourism experiences. It delves into the implications of integration, specifically vertical and horizontal integration, within the hospitality industry, using the case study of Whitbread Group. The report analyzes the benefits and drawbacks of integration, highlighting its impact on business expansion, market share, and overall industry dynamics. It concludes by emphasizing the importance of collaboration and communication between the hospitality and tourism sectors for achieving mutual success.

Hospitality provision in travel and tourism sector
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Contents
Introduction................................................................................................................................3
Task 1- Written article...............................................................................................................4
1.1 Discuss the interrelationships between hospitality and wider travel and tourism
businesses...............................................................................................................................4
Task 2- written management report...........................................................................................8
Executive summary................................................................................................................8
Introduction............................................................................................................................8
2.1 Analyse the implications of integration to the hospitality industry..................................9
2.2 Discuss how integration has affected a hospitality business..........................................13
Conclusion............................................................................................................................16
Conclusion................................................................................................................................17
References................................................................................................................................18
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Introduction
This assignment is related to the case study of PKF hotel experts which provides a wide range
of hospitality facilities to the customer. The PKF- hotel experts are Austria based firm which
provides numerous goods and services to the customers. The hospitality simply refers to the
relationship among guest and host where the host accepts the guest with kindness, comprising
the welcome and entertainment of visitors, or strangers. The service industries which are
benefit from tourism are transportation services and many more. In the today’s world, the
hospitality sector is rapidly increasing as this is due to the involvement of tourism sector.
Basically, this module is divided into three parts. The first part will present an understanding
of the role of the hospitality sector in the tourism and travel segment. The second task will
discuss the how integration has affected the hospitality business such as PKF- hotel experts.
In this section, the implication of integration to the hospitality sector will be discussed in an
effective and efficient way. In the third task, planning will be made in the context of the
development of the hospitality businesses. It can be seen that with changing times the tourists
are getting attracted towards stay, comfortable and quality of products.
(Source: Global Hospitality Portal, 2018)
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Task 1- Written article
1.1 Discuss the interrelationships between hospitality and wider travel and tourism
businesses.
Topic- Understanding the role of the hospitality industry in the travel and tourism sector
Date- 12 April. 2018
Introduction- This article will present the relationships among hospitality and wider travel
and tourism sector. This article is related to the case study of PKF hotel expert which totally
focuses on hotel, travel and vacation checking. PKF hotel expert is a globally recognised
marketplace front-runner in the field of guesthouse, travel & vacation consulting. Basically, it
is Austria based organisation but it runs in approx. 100 countries. As per the record, this
organisation was founded in the year 1869 by William J Forster who marks the foundation of
the firm's dedicated hospitality advisory actions, maintained by intricate financial surveys and
relevant benchmarking facilities ideal for a globally developing industry. In the current era,
the hospitality sector is growing rapidly day by day. It is simply an extensive group of fields
within the industry that comprises the housing, occasion planning, theme parks, conveyance,
vacation, and supplementary fields in the tourism industry.
(Source: WKO, 2018)
A hospitality sector is an extensive group of industries that helps in providing facilities to the
clients. The main focus of the hospitality sector is to satisfy the needs and demand of
customer and providing specific experiences to them (Walker, 2012). The reason behind the
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uniqueness of hospitality sector is that it relies so deeply on optional revenue and open time.
The PKF hotel experts have mainly three areas which are accommodation, food and beverage
and travel and tourism. The hospitality industries are simply comprised of pubs, bars, catering
and many more (Study.com, 2018).
(Source: E-invoicing platform, 2017)
The travel and tourism sector is one of the largest industries in the world. In the current era,
large numbers of tourist are getting familiar with the tourism sector for business or leisure
purpose. Tourism is simply a major economic and social significance that has been
recognised in both developing and developed countries. The positive outcome of tourism on a
country’s budget includes the development and growth of numerous businesses which are
straightforward with the hospitality sector such as hotel bookings or others. The tourism
sector has evolved a number of innovative occupations and income from the foreign
exchange and expenses of goods and facilities delivered. Although developments in the living
standard of citizens in deeply visited tourist destinations are typically slight, increase of the
values of supplies, due to visiting sightseers, is a constant feature of these ranges.
Interrelationships between hospitality and wider travel and tourism businesses
The tourism industry is playing a significant role in improving the growth of the hospitality
sector. Many of the hospitality industry such as PKF hotel and experts are totally dependent
on the tourism sector. It helps in providing an effective number of customers who are
traveling within the respective package. In the recent time period, many of the hospitality
sectors are getting collaborated with the tourism sector for the booking and other services of
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the customer. They used to provide effective services within the same leisure package to the
visitors.
Business travel- Many of the business travel is provided by the tourism sector at low cost.
For an effective space for meeting and other purposes, the hospitality sector such as PKF
hotel and experts are used to provide new hotel services to the customers. This helps in
attracting a large number of customers from all over the world. The satisfaction level of
customer is totally depending on the services provided by the hospitality sector. The business
travels help visitors in analysing the products and services of the firm.
Holiday and travel packages- The collaboration of hospitality sector and tourism sector is a
growing market which provides a wide range of services to the customer. In the UK, many of
the travel company are used to provide a number of holiday packages to the customer by
adding different components i.e. as per the demand and desire of customers. For the success
of the hospitality sector, the tourism industry is playing a tremendous role. While booking of
holiday packages, the tourism sector is used to provide offers and discount on hotel booking
for attracting customers towards the hospitality sector effectively. In the current era, it can be
seen that many of the tour operators are providing hotel booking and food services to the
visitors. This simply shows the collaboration of the tourism and hospitality sector effectively
(Barrows, 2011).
Communication- Communication plays an important role in the interaction between two
persons. It is also known as the core of the hospitality sector because it helps in
communicating with the customers. Through effective communication with the visitors, the
hospitality sector will be able to know their needs and wants. This will be helpful in the
production of goods and services in an effective way. The management of PKF hotel expert
believes in effective communication skills with the visitors and for this, they used to organise
different seminars and activities within the organisation premises. The communication among
hospitality and tourism sector helps in knowing the number of tourists who booked their
holiday packages. This helps in providing effective hotel services, food and beverage to the
customers.
Conferences and exhibition- a Large number of visitors are used to come to the different
conferences and other programs. For staying purpose, they choose various hospitality sectors
such as PKF hotel experts and others. With its trendy Art Deco tradition, this luxury hotel
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offers an outstanding site for social events, and all the modern technological equipment to
make business events a resounding success (Kotler, et. al., 2010).
Theme parks- Theme parks offer hospitality services to the wider travel and tourism sector.
The leisure traveller use lodging, cafes (food and beverages), bars and pubs, fast foods
restaurants as their tourism product. This helps in making an effective relationship with
hospitality and tourism sector. The theme parks are included in the tourism package of the
customers. Within the theme park, many of the hospitality sectors have collaboration with the
tourism sector in which they used to provide food and another facility to the visitors
effectively. This helps in satisfying the needs and demand of the customers within the same
area.
Conclusion-
By considering the case study of PKF hotel expert, it can be easily said that interrelationships
among tourism business and hospitality sector are important because it helps in improving the
current organisational structure in an effective and efficient way. The management of PKF
hotel expert is fulfilling the needs and demand of customers. They are simply considering the
desire of customers first and in secondly they prefer the products and services. They are also
collaborating with the various tour operators for holiday and travels packages.
Communication is one of the best methods used by the management of PKF hotel expert for
communicating with the tourism sector. This will be helpful in enhancing the relationship
between organisation and tourism sector effectively.
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Task 2- written management report
Executive summary
This report is summarising the implications of integration to the hospitality sector. Different
examples are discussed in this report for analysing the effect of incorporation within the
organisation. It can be seen that the integration helps in increasing the global presence and
improving the market share of the firm in an effective and efficient way.
Introduction
This part of the reported study will explain the consequences of the integration or
collaboration within the organisation. For the completion of this task, secondary data has
been chosen such as books, journals or others. In simple words, integration can be defined as
a combination of two or more sector for improving their current market value and structure in
an active and operative way. This report will explain the role of mergers and acquisition
within the organisation. The organisation chosen for this task is Whitbread group which is
UK based multinational hotel and restaurant. The net income of the organisation is £415.9
million (2017). The key people of the organisation are Richard Baker (Chairman) and Alison
Brittain.
(Source: Click Travel, 2018)
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2.1 Analyse the implications of integration to the hospitality industry.
Integration: history and development of horizontal and vertical integration, integration
via major organisations (ownership)
Integration occurs when an organisation controls more than one part of the distribution
process. In general, it can be seen that for achieving the market value and a large number of
customers the hospitality and tourism sector are collaborating in an effective and efficient
way. Hospitality business can be able to improve its business on a global level by using the
characteristics of integration. It also helps in improving the revenues along with the brand
improvement of the hospitality business. Integration is important for each and every business
because it helps in decreasing the operational cost effectively. This will be helpful in
improving the current status of the organisation. The saved amount of the organisation can be
used for the growth and development of the organisation (Hon and Lui, 2016).
Example- Marriot International has taken over the Starwood Hotels & Resorts by, at the
value of 12,2 billion US$, which is also known as the largest transaction in the hospitality
industry. In 2015, France’s Accor Hotels accepted luxury Fairmont located in Canada,
Raffles and Swissotel brands in $2.7 billion; the Intercontinental Hotels Group assimilated
Kimpton Hotels and Restaurants for $430 million.
The integration has positive as well as negative effect on the organisation. When the
integration will be done among big hospitality sectors such as Whitbread and Marriott hotel
then it can be responsible for affecting the local people. It can also be responsible for creating
a problem for the local people or organisation which is running on small funds. The
employment rate of the country will also be affected when the small hospitality sector will be
thrown out due to merging or integration of big hospitality sector.
The integration within the hospitality sector can be defined in two types which are as follows:
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(Source: Author)
Vertical Integration- In the vertical integration, the organisation such as Whitbread will buy
another company within the distribution chain of the services. It can have a significant impact
on the unit position of the organisation with respect to the cost, differentiation, and issues. It
is simply a degree in which the organisation can be able to own its upstream suppliers and
downstream buyer. The vertical integration is also segmented into two types that are forward
and backward integration. In the forward integration is done when the fir will control the
supply chain in the initial stage. On the other hand, the backward integration is simply done
when the business at the end of the supply of the product can take activities.
Implications
The implication of vertical integration within the working environment of Whitbread is that it
gives a competitive advantage for improving the growth and expansion rate of the firm. In
this type of integration, the organisation is not required to rely on their suppliers. This will be
helpful in avoiding the frequent strikes and disputes in an effective and efficient way. The
organisation benefits from vertical integration when the dealers have a share of market
control and can command terms. That can be serious if one of the dealers is a monopoly. It is
important that the organisation needs to go around this type of suppliers as this will be helpful
in gaining many benefits to the organisation. This will assist in improving the growth and
revenue rate of the firm in an effective and efficient way (Amadeo, 2018).
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Vertical Integration
Horizontal Integration

The vertical integration also provides economies of scale to the organisation. It allows in
cutting unit per cost by buying in bulk. In vertically integrated organisation
eliminate overhead by consolidating management. In the last few years, it can be seen that the
many of the hospitality sectors are using vertical integration. In this, the organisation such as
Whitbread group can own their hotel ownership and the various areas of the management.
The organisation totally focuses on the construction of the entire property of the hotel rather
than focusing on improving the brand presence. The vertical integration helps in controlling
the entire business effectively. It assists in the consolidation of the complete business chain
(Amadeo, 2018).
Horizontal integration- In the horizontal integration, the two organisations from different
industry combine together for a new and innovative firm. In the context of Whitbread group,
it helps in expanding the number of customers and increasing the productivity and
profitability rate of the firm in an effective and efficient way. It simply focuses on improving
the skills of their old workers rather than the hiring of external workers. This is because the
old employees are familiar with the organisational policies and working scenario. The cost of
training and development session will be reduced effectively. The horizontal growth can be
attained by the internal expansion of via merger or acquisition of the firm by offering similar
products and services to the customers. The hospitality sector such as Marriott hotel,
Whitbread group or others uses this type of integration for merging with the other
organisation. The customer base can be improved when the firm will build a new property at
the new place. This will be helpful in attracting a large number of customers from all over the
world. It is important that the organisation needs to purchase the business which already
exists. This assists in saving the construction and branding cost of the firm. Many of the
hospitality organisation such as Marriott, Whitbread or others collaborates with the airline of
the tourism sector in a systematic manner. The effective coordination among the tourism and
hospitality sector helps in creating a positive image for the customers. It is important that
both the combined companies need to work in an active manner. The revenue rate of the
organisation as well the economy rate of the country will be enhanced.
Implications
The effect of horizontal integration within the organisation is that it helps in reducing the cost
of international trade by operating factories in foreign markets. It also helps in developing the
core competencies and skills of the firm in an effective and efficient way. In this, the working
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of two different organisation will be helpful in yielding more goods and services effectively.
The low purchasing cost of the raw materials assists in starting another work or production in
an active way. Participating horizontally supports the business to arrive external businesses
openly. This decreases the expenditure of worldwide trade by permitting the business to
handle and offering the invention in the distant market. The horizontal integration combines
the industry and creates trust within the firm. This aids the businesses to increase control in
the market, and to control provisions and other associates in context of cost and quality. New
marketplaces and delivery networks can be opened by participating in a business which
yields the same properties but runs in various regions or assists dissimilar market segment
(Singh, 2017).
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2.2 Discuss how integration has affected a hospitality business.
Integration within the hospitality commercial has positive as well as negative impact on their
current business structure and market value. Following are the pros and cons of integration
within the hospitality business such as Whitbread Group or others:
Vertical integration
Positive impact
According to Kokemuller (2018), the vertical integration offers numerous of positive impact
on the hospitality business. It helps in the regional and global expansion of the firm
effectively. The global expansion can only be done when the organisation merges with the
businesses for attaining the foothold in the marketplace. The vertical integration helps in
aligning of the values, skills, and competencies in an effective and efficient way. The
organisation with a proper standard will be helpful in improving the service quality of the
product and services. By using this type of integration the organisation will be able to control
the competition and the market. They can be able to develop new and effective tactics for
improving the growth and development rate of the firm in an effective and efficient way. The
organisation controls more of its supply chain; they can have specific benefits which are
needed by the local people. This permits the firm to obtain a larger market share because this
will be helpful in creating a value proposition that will be better than the competition offered.
When the vertical integration will be done in an effective way then the organisation will
focus on the quality assurance of the firm. The market share of the organisation such as
Whitbread group will be increased all over the world. When the organisation uses this type of
integration as in forwarding or backward way then the process will open a new market for the
business. When this will occur, more incomes can be attained by the firm due to having a
bigger base of leads to follow (Kokemuller, 2018).
Negative impact
As per the words of Pettinger (2015), the vertical integration has positive as the well negative
impact on the Whitbread group. It affects the firm by reducing the independent business. The
established distribution channel may be affected due to this. The unprofitable outcome will be
responsible for affecting the overall growth and development rate of the firm. Due to this, the
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organisation can face capacity-balance problems. It can be seen that the vertical mergers have
fewer economies of scale at the different level of the firm. The manufacturing business that
has control over the access of raw materials or resources can get scared because the vertical
integration can be responsible for creating a barrier to the market entry. This will be
responsible for affecting the market value of the firm. Due to this, Whitbread group will not
be able to get known with the latest market trends and tactics. It can also cause confusion
within the organisation. Retail and product development are different businesses, and doing
both could require more time and effort to be done. In vertical integration, Whitbread is able
to control the competition and perhaps create a durable marketplace and permit the safety of
the organisational customer base. Yet, this can lead to anti-trust when controllers think that
unions change market absorption. It can be responsible for reducing the flexibility of the
organisation. Basically, it can be seen that the vertically integrated company do not follow the
trends and demand of customers. They can’t be able to change their manufacturing plant at a
lower cost. This can affect the overall financial rate of Whitbread group in a negative way
(Pettinger, 2015)
Horizontal integration
Positive impact
In the context of Whitbread group, the potential impact of horizontal integration is that it
exploits the internal economies of scale. As the scope of the business will upsurge the price
of each unit of production for the product will decrease. It is easier for the upper organisation
of the Whitbread group to achieve the main company which is running in the similar
business. One of the advantages of horizontal integration is that it helps in reducing the
competition level by decreasing the number of businesses which are in the manufacturing.
The horizontal integration helps the organisation in gaining control in the marketplace as well
as dominating the supplies in terms of cost and quality of the services. It provides a wide
range of products to the organisation which creates opportunities for the markets of scope.
Horizontal integration brings the advantage of the economies of scale as it provides the
advantage of the cost to the companies by adopting the way of expansion. The cost is reduced
when the large quantity of the goods are produced which in turn helps in increasing the
profits of White Bread. With this, the market power of the Whitbread will also increase as the
channel members will increase in terms of the quantity and the cost. Economies of scope are
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also one of the advantages as resources can be shared to different products which help in
reducing the cost (Tutor 2 u, 2015).
Negative impact
With the advantages, the horizontal integration also carries various disadvantages. The major
disadvantage is that it may impact the power of the opponent company, as the Blackstone
wills have the monopoly of powers over the Hilton. This impact of the powers will exploit
the customers of the Hilton as higher prices will be charged. Another negative part is that
with the merging it will be difficult to integrate the belief, norms and the cultures of the two
integrated companies. Therefore, through horizontal integration, there will be lack of
diversification if in case the government policies and the technologies changes. This can be
responsible for creating investment in the organisation. For knowing the reviews and
feedbacks of the customers, the organisation is required to invest money in organising survey
and interview session with the customers (Tutor 2 u, 2015).
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Conclusion
The above discussion concludes that the globalisation is playing a tremendous role in
improving the exchange and revenue of the region. The merger and acquisition are important
because it helps in the collaboration of the organisation in which they can combine their skills
and talent for achieving a common goal. In the above task, it can be seen that the quality of
services and number of employees will be improved. The sharing of ideas and information
from one to another sector will be helpful in improving the current tactics of the firm in an
effective way.
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Conclusion
At the end of the module, it has been concluded that the relationship among hospitality and
tourism sector is playing an essential role in contributing towards the GDP rate of the region.
Integration is one of the major factors which are important for tourism as well as hospitality
sector. The hospitality and tourism sector needs to coordinate with each other. This will be
helpful in improving the market and moving the organisation on the verge of success. For an
effective collaboration of tourism and hospitality sector, communication is important because
it helps in the sharing of ideas and information from one sector to another. They can also
exchange the number of visitors who have booked their tickets for a respective vacation. The
integration business will be helpful in providing quality products and services to the
customers. Any kind of effect on one sector will be responsible for affecting the growth of
the sector in either negative or positive way. This report helps in the execution of all the ideas
related to the hospitality and tourism sector. From the above discussion, it can be understood
that for satisfying the needs and demand of visitors the hospitality and tourism sector are
required to work in the same manner.
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References
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