Hospitality Industry Integration and Impacts

This assignment delves into the hospitality industry, focusing on its interconnectedness with travel and tourism. It examines various aspects of integration within this sector, such as horizontal and vertical integration, and analyzes their effects on market share, economies of scale, and the emergence of global brands. Students are also tasked with creating a business plan for a selected company, incorporating innovative product concepts to attract consumers.

Hospitality Provision in the
Travel and Tourism Sector

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
A. Scope and scale of hospitality industry with travel and tourism sector and its
interrelationship and role of hospitality function .......................................................................1
TASK 2............................................................................................................................................3
A. Integration in hospitality sector organizations and horizontal and vertical integration in the
industry .......................................................................................................................................3
B. Impacts of integration and ways of deciding to respond to consequences of integration .....4
TASK 3 ...........................................................................................................................................5
A. Develop rational for new hospitality business outlining the products and services concept 5
B. Develop and produce project proposal ..................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCES .............................................................................................................................10

INTRODUCTION
Hospitality industry is active business with numberless categories but consumer service is
the integrative element shared by all segments of the industry. Hotels, events, travel and tourism,
food services etc (Baum, ed., 2016). Travel and tourism industry is one of the largest and fastest
growing businesses in the UK. This sector is the biggest contributions to the world economy.
This study is based on the TUI. It is UK based tour operator and subsidiary of TUI Group.
Report will explain scope and scale of hospitality industry with travel and tourism sector, its
interrelationship and role of hospitality industry. It will assess the integration in hospitality
sector organizations. It will analysis the impacts of integration and ways of deciding to respond
to consequences of integration within travel and tourism sector.
TASK 1
A. Scope and scale of hospitality industry with travel and tourism sector and its interrelationship
and role of hospitality function
Hospitality industries includes accommodation and lodging, hotels, restaurants etc.
Tourism organizations require consulting famous hospitality services in relation to satisfy their
consumers and visitors. The hospitality industry is the portion of bigger business called as travel
and tourism industry (Law and et.al,, 2015). Travel and tourism is wider group of businesses
with one common goal is to give necessary and desired goods and services to the traveller.
Accommodation: This sector of hospitality industry features scope from luxurious hotels
and to lavish resorts and camp ground. Accommodation is the wider sector of hospitality
business which is ranging from bed and breakfast enterprises as well as hotels to other services
that offer lodging facilities. Also, consumer service is necessary in giving accommodation
facilities (Baum and et.al., 2016). There are three things that people needs when they are
travelling that is accommodation, food and transportation. There are high level focus on
improving the lodging experience of people travelling around the world. In relation to that, travel
and tourism like TUI also provide accommodation to their consumers.
Hotels: Hotels are referred to by hotel type or category. The kind of hotel is defined
mainly by the size and location of the building structure then by operation, target market, service
level, amenity and industry standards. There are various types of hotels such as 1 star to 5 star,
budget, bed and breakfast. The hotel size is based on number of guest rooms. The sizes of hotels
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can range from small boutique hotel with lesser than 50 rooms to large resort hotel with more
than 1000 rooms. Therefore, hotel sector business play wider role in the travel and tourism
sector. This help to increase the attraction of guests towards the company. In this context, budget
hotels is challenging determining the most budget places have standardised visual aspects and
offer basic services with limited food and beverage services (Gretzel and et.al., 2015.).
Restaurants: Restaurants are classified in different ways. The main factors are normally
the food itself that is vegetarian, seafood, steak. Beyond this, restaurants can differentiate
themselves on elements involving speed that is fast food, formality, location, cost, service etc.
Fast food restaurants are also considered as restaurant. The travelling consumer has long been
served for with ship's messes which are effect travelling restaurants. In modern time, cafes,
coffee shops, mainstream, fine dining are also considered as restaurants. In this context, travel
and tourism companies also provided the food and beverages services to their consumer for
increased their attraction.
Interrelationship between travel and hospitality industry:
Tourism is an action where multiple people from all over the world visit nation. The aim
of tourism is to attract visitors from other portions of the world. It is to learn more about the
custom and activity which have been playing an essential role to sustain the socio-economic
status of host. When it comes to the hospitality, the difference is the warm treatment to the
localised in the file which they are visiting (Salvioni, 2016). Hospitality is the ability to localised
to give warm accommodation to any travellers who want to experience the opportunity of their
lifetime through visiting area. It can generate memorable issues to their life. Hospitality is the
main component for establishing effective tourism business that is TUI in certain nation. It is
important because travellers want localized to experience custom and tradition of nation. Also,
they need international visitor's experience tradition and custom on daily basis. In this, company
use the model of competitiveness in which they determine the competition where less number of
tourists come in. therefore, there is lower competition in that places. Through this, company can
be identify the interrelationship between travel and hospitality industry.
Role of hospitality in business travel:
Hospitality industry is playing the best and effective role in the travel and tour. In this
hospitality industry paying impressive and best facilities to the business, budget, private tour,
adventure tour and any other kind of travel. In order to that, travel and tourism also provide
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conferences, events for increasing the more attraction of visitors (Airey, Dredge and Gross,
2015). In that, TUI group's hospitality plays an essential role by paying extra care to people. All
the people are attended for the aim of learning and discussing on the topic that related to the
development and growth of business. Therefore, TUI needs to provide the affordable products
and services to consumers for increasing the attraction and experience during utilization of
services of firm.
TASK 2
A. Integration in hospitality sector organizations and horizontal and vertical integration in the
industry
Integration is the strategy which refers to companies become large enough and have
adequate capital by which they frequently decide to acquire other businesses. Basically, there are
two kinds of integration such as horizontal and vertical (Sigala, 2017). The chain of distribution
aids understanding ways horizontal and vertical integration works.
Horizontal Integration:
It includes decreasing competition and raising the market share through buying
competing businesses. Organizations seek to buy firms in the similar industry that can offer
many benefits involving such as raising the size, growing their product offering, decreasing
competition and accessing the new consumers. If the tour operator purchases at the same level in
the chain of distribution, so that it called as horizontal integration (Boella, 2017). For example:
the acquisition of Marriott and Starwood hotels & resorts worldwide in the hospitality industry
in 2016. If tour operator mergers with another tour operators so that it is horizontal integration
because they are on same level.
Vertical Integration:
This integration happen when firm buy entities engaged in different steps of the value
chain. Importantly, this refers which one company buy another included in the production of the
similar good but at the different level of supply chain. It is making the procedure of creating
good and getting it to market cheaper and faster. There are many benefits including strong their
supply chains, decrease production costs, capture more profits and access new distribution
channels. Tour operators have purchased or created airlines, hotels and travel agencies (Mason,
2015). This refers they operate all chain of distribution and able to control the whole operation.
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For example first choice and TUI are travel companies and they merged together. Now Thomson
operate both firms. TUI is the often advertised on Thomson discuss but its in smiley face style. If
the tour operators merged with travel agent or transport providers so that it can vertical
integration.
Implication of Integration
Integration is work and its outcomes is more effective and best way. Hospitality industry
is incorporated with the airline company joining travel provider. Nowadays people are needed to
travel by the air and water because of early and fast reach to destinations. Integration is effected
to business and hospitality industry by making positive changes and growth of business.
Combination and merging is the best and effective portion when firm and business is gain large
growth in their hospitality business (Sigala and Gretzel, eds., 2017). Tourism sector is preformed
the best protection and enlargement of environment. For that, TUI has aided to firm for
becoming market leaders in the travel sector.
B. Impacts of integration and ways of deciding to respond to consequences of integration
Through integration, there are many impacts of an integration of travel and tourism
companies like TUI. Merging and integration is aided to gain success of firm and also develop
presence of business at the marketplace. Impacts are followed such as:
Market share:
It is the essential for companies to create the position within the industry. Therefore,
organizations need to integrate business with another firms. Integration is aided to increase
market share and provide the competitive advantage (Mansour and Ariffin, 2017). For example:
the acquisition between Marriott and Starwood Hotels & Resort. Therefore, this integration is
helped for Starwood hotels in relation to enhance the market share in hotel sector within
hospitality industry.
Economies of Scale:
Integration is helped for increasing the economies of scale in which hospitality
companies are operated. Therefore, most of tour company like TUI. This company is merged
with first choice which can be helped to increase the economies of scale within the hospitality
industry (Fang and Law, 2016).
Reduction of independent business:
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With integration, there are high reduction of independent business within industry.
Through integration, independent establishments joining organizations to compete with large
firms. This help to increase competitive advantages of travel and tourism with in the hospitality
industry. For example, TUI is merged with First Choice which is operated in same sector. This
integration is reduced independent business in the travel and tourism sector in the hospitality
industry.
Branding:
It is frequently believed of consumers and helped to gain success of the travel business. It
is useful and best for handling the growth of the organization. For example: TUI is merged with
the first choice for increase branding within hospitality industry. This have every effective and
valuable brand image in the marketplace and also consumers are trusts to them (Airey, Dredge
and Gross, 2015 ). Selected travel company is integrated and merged with first choice, investing
in another company at same sector which can help to make powerful brand image in the market
at localised and global areas. This group is maintained old consumers and ensuring same quality
of services in different sector.
Increased in globalization:
It is essential to increase in globalization through integration. The managing market is
essential for firms to generate important revenue and help to give international exposure to the
firm. TUI tour is integrated with first choice which is aided to grow their international presences
and image (Sigala, 2017). Globalization is decreased trade barrier which can assist to attract
consumer towards it. These have benefits from their goods and services trade relation to same
occurs.
Market control:
Integration is helped to control the market and this provide cost advantages to company
as well. TUI is merging with first choice for improve their market effectively. This can help to
increase market share. This travel sector is aided to maintain the effective and valuable control to
the marketplace. Therefore, integration is beneficial for controlling the travel and tourism
market.
Therefore, integration is essential for low and small company for expanding the
operations and functions in the marketplace. It is also called as merger and acquisition which
means combination between two companies (Boella, 2017). This help to increase market share,
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branding and market control by firm. With the help of it, increase brand image and equity of
travel companies in the tour sector. This also help to create the higher position in terns of
competitive advantages within the hospitality industry.
TASK 3
A. Develop rational for new hospitality business outlining the products and services concept
Travel and tourism is served key to make memorable experience for travellers. This
experience is marvellous for their outing. Most of the people go outside for changes which is
more effective. TUI is the largest travel and tour operators in the UK. Now they want to
developed new and innovative business plan for opening new restaurant which named TUI
restaurant. It is the given best experience to the people in unique and innovative manner. This
business plan is increased experience such as niche and unique. This decision is wholly
connected to the target market and consumers as well (Gretzel and et.al., 2015). This innovative
and unique business help to increase market share, revenues and profits of TUI. Company is
introduced the Wearable device in the market. This device will be utilised by each and every
travellers during the travel. This kind of product concept is highly attractive to consumers for
their increase experience towards the selected company. Through this device, tour operator are
easily tracking actual time and location of traveller during the travel. This product help to reduce
waiting time of the customers.
New and unique product help to increase profits and productivity of TUI as compared to
their competitors in the travel and tourism sector. Attractive product concept increase number of
consumers which help to enhance the sales and market share of the firm. Also, this can aid to
make higher position within the hospitality industry.
B. Develop and produce project proposal
Executive Summary
This business plan involve the company background, target market, range of products and
services and SWOT analysis of the new business. It has covered that operating model, cost and
prices strategy as well as financial analysis of TUI. The purpose of this business is to transform
quality to people and other. Selected company is introduced the unique and innovative business
idea opening new restaurant which named TUI restaurant. This kind of product concept help to
increase consumer attraction and experience towards the company.
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Company Background
TUI travel Plc is UK based travel and tour operator and subsidiary of TUI Group.
Thomson Travel Group was owned by the Thomson Corporation. Selected travel group operates
their own cruises line, Marella which offers travels around Europe and beyond with 5 ships in
the fleet. TUI is expanding their business in terms of introduce new products and services
concept across the world. Nowadays, they want to business idea opening new restaurant which
named TUI restaurant. for their each and every consumers during the travel (Gretzel and et.al.,
2015). This unique and innovative product help to increase attraction and experience towards the
goods.
Target Market
TUI want to business idea opening new restaurant which named TUI restaurant for
attracting the more consumers. For that, company is targeted those consumers who have special
holidays package. This kind of product help to track time and location of traveller during the
travel, so that it reduce the waiting time of further consumers. For targeting consumers, company
needs to adopt different promotional activities like social media ads for new products and
services to increase attraction of consumers towards the new product.
Product and Services
TUI offers different range of products and services such as charter and scheduled,
passenger airlines, holidays packages, cruise lines, hotels and resorts. In this context, they are
also diversified the range of goods and services in relation to business idea opening new
restaurant which named TUI restaurant for attracting the more consumers. (Baum and et.al.,
2016). This kind of product development is the best and effective way to expand their business
within the travel sector as well as hospitality industry. It is the new, unique and innovative
product will help to growth and development of business in the travel and tourism sector.
Through new concept of product, it creates the higher position in travel sector within the
hospitality industry. Product and services of the business plan are aided to develop the brand
image, profits and attract towards it.
Design
It is the necessary to create unique and innovative business idea opening new restaurant
which named TUI restaurant for attracting the more consumers. by TUI so that each and every
customers highly attracted on it as well as utilization at the large level. Attractive, unique and
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innovative product design help to increase the consumer experience towards the goods (Law and
et.al,, 2015). Therefore, it is needed to create the innovative design of “Wearable device” and
using the advance technology in it. With the help of it, tour operator easily track location and
time of traveller during the travel. This can help to reduce the waiting time. This unique and
innovative product help to increase attraction and experience towards the goods.
SWOT Analysis
It is the necessary to identify the weakness and threats of business idea opening new
restaurant which named TUI restaurant for attracting the more consumers than company needs to
explore the strengths and opportunities which help to reduce the weakness and threats of new
products as business plan.
Strength
 Innovative Concept.
 High income to out target market.
 Larger market share.
Weakness
 Adopting by competitors.
 Large amount of money on technology.
Opportunities
 Ability to attract consumers.
 Build brand image.
 The ability to appeal to various target
market.
Threats
 Changing market taste and preference.
 High technology expenditure.
 No understand by staff members.
Operating Model
TUI offers the unique and innovative business idea opening new restaurant which named
TUI restaurant for attracting the more consumers. For that, it is necessary to understand
utilization of device by staff or employees, so that they are giving the guidance and offering to
each and every consumers (Baum, ed., 2016). This can help to track actual time and location of
traveller during the travel. If the employees do not understand the utilization of product, so that
they do not provide proper guidance to consumers during their travelling.
Cost and Prices Strategy
Particular Amount (£)
Technology Expenditure £60,897.00
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Advertisement Expense £6000.00
Design £8000.00
Price per unit £30.00
Profits Margin £687.00
CONCLUSION
This report has summarised that scope and scale of hospitality industry which involves
accommodation, hotels, restaurants that have also interrelated to the travel and tourism sector. It
can be concluded that integration in hospitality sector organizations which involves two kinds of
integration like horizontal and vertical that have used in the travel and tourism. It can be
discussed that Impacts of integration which includes market share, economies of scale, reduction
of independent business, branding, increased in globalization within the hospitality sector.
Furthermore, create business plan in terms of selected company introduce unique and innovative
product concept to attract the consumers.
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REFERENCES
Books and Journals
Airey, D., Dredge, D. and Gross, M. J., 2015. Tourism, hospitality and events education in an
age of change (Doctoral dissertation, Routledge).
Baum and et.al., 2016. Sustainability and the tourism and hospitality workforce: A thematic
analysis. Sustainability. 8(8). p.809.
Baum, T. ed., 2016. Human resource issues in international tourism. Elsevier.
Boella, M., 2017. Human resource management in the hotel and catering industry. Routledge.
Fang, Ye, Q. and Law, R., 2016. Effect of sharing economy on tourism industry
employment. Annals of Tourism Research. 57(3). pp.264-267.
Gretzel, U. and et.al., 2015. Smart tourism: foundations and developments. Electronic Markets.
25(3). pp.179-188.
Law and et.al,, 2015. Distribution channel in hospitality and tourism: revisiting disintermediation
from the perspectives of hotels and travel agencies. International Journal of
Contemporary Hospitality Management. 27(3). pp.431-452.
Mansour, J. S. and Ariffin, A. A. M., 2017. The effects of local hospitality, commercial
hospitality and experience quality on behavioral intention in cultural heritage
tourism. Journal of Quality Assurance in Hospitality & Tourism. 18(2). pp.149-172.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
Salvioni, D., 2016. Hotel Chains and the Sharing Economy in Global Tourism. SYMPHONYA
Emerging Issues in Management, (1).
Sigala, M. and Gretzel, U. eds., 2017. Advances in social media for travel, tourism and
hospitality: New perspectives, practice and cases. Routledge.
Sigala, M., 2017. Collaborative commerce in tourism: implications for research and
industry. Current Issues in Tourism. 20(4). pp.346-355.
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