Strategic Plan for Hilton Hotel's New Venture in China

Hilton hotel will face staffing issues during peak and off-peak seasons, requiring more staff to entertain guests. To comply with legislation, the hotel must follow employment laws, antitrust laws, health and safety laws, etc. The hotel will use various promotional tools and techniques, including advertisements on TV, newspapers, and social media. Initially, the hotel will adopt a low-price strategy to attract customers. Once it attracts sufficient Chinese customers, it can increase prices for its tourism services.

Hospitality provision in travel and
tourism
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INTRODUCTION
Travel and tourism is the largest service industry worldwide in terms of earning gross
revenues. Hospitality is seen to be an important element of travel and tourism sector. This industry
includes businesses that deal in providing accommodation to tourists and travellers at the time of
visiting various destinations. For satisfying the accommodation and catering needs of visitors,
tourism industry depends totally on the hospitality sector. Here, hospitality provision includes
various rules as well as regulation that support the operational performance of travel and tourism
industry. However, provisions of hospitality are mainly focused towards offering better
accommodation services as well as food and beverages (Charles, 2007). With the help of
hospitality provisions, growth in travel and tourism sector can be attained. The present report
explains the interrelationship between hospitality and wider travel and tourism businesses.
Therefore, two leading hospitality organizations are selected namely Hilton Hotel and Marriott
international hotel. Furthermore, implications of such integration to the hospitality industry and its
effects on hospitality business are also described. Relationships between travel, tourism and
hospitality is going to be described in this unit while defining the role of integration within
hospitality business. At last a plan for hospitality business is designed along with operational
requirements and human resource allocation.
TASK 1
P 1.1 Interrelationships between hospitality and wider travel and tourism businesses 1000
Composition of the hospitality industry:
Hospitality is a crucial service provider in travels and tourism industry in terms of
providing accommodation to people and satisfying their needs related to food and beverages. The
mentioned industry is a composite of various hotels (1 star to 5 star, budget hotels, bed and
breakfast) as well as restaurants including fast food, cafes, coffee shops, mainstream, fine dining,
pubs and bars (Najeeb, 2013). It also includes nightclubs, contract food service providers
membership clubs; as so on.
Hotels provides accommodation services to the tourist when they are arrived at the final
destination. There are two major hotels in United Kingdom i.e Hilton Hotel and Marriott
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International that provide better quality of accommodation services to the customers as well as
visitors. Hotel rating from 1-5 star depends on different factors such as quality, scale, number of
comforts and services. In relation to the tourism industry, accommodation is considered as a
fundamental factor at the time of designing package holidays. Further, accommodation services
are planned to be provided as per the preference of tourists as well as their budget.
Identification of the best restaurant is based on various factors including menu, music,
ambience and price. Restaurants cater different requirements of visitors as it is an integral part of
tourist’s holiday (Hadjikhani, 2005). Experience provided by restaurant decides the frequency of
guest for coming days. Management of restaurant provides financial security to tourists. For
example: McDonalds is the famous restaurant in United Kingdom which provides better services
to the clients. Tourists prefer to visit restaurants that are recommended by the staff of their hotel,
from locals, or Trip advisers.
Cafes are specialise in offering hot beverages like as teas and coffees. At present, cafes are
also providing variety of snacks and fast food. As per an illustration, McDonald's has its own
McCafe which is recommended by trip advisor to their clients (Barron, 2008). Adding to this,
caterers of hospitality industry are being provided great importance for major events including
conferences, parties and exhibitions as the organizers are fully devoted to provide unforgettable
and unparalleled experience to the clients. Tourists are now a days, focusing towards the event
halls that keep better balance between the quality and price.
Travel and tourism sector:
Travel and tourism sector mostly focuses on designing holiday packages for the visitors
which include services such as accommodation, food and beverages as well as transportation (Im,
2014). For example: Thomas Cook is a leading travel and tour operator in UK which deals in
providing services such as air transport, tour packages, etc. Scope of travel and tourism is wide in
the business context as it leads to design tour packages as per the customer’s needs.
Conferences and events: The tour packages for corporates and designed at major location
and preferences of customers to conduct conferences and events (Manente and Montaguti, 2006).
All the services related to travel and tourism industry are included to select a better place for
corporate events.
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Visitor attractions: Travel and tour industry arranges holiday packages with the
destination that is liked mostly by the clients. Most of the areas of visitor’s attraction are included
in the travel and tourism services (Mamaghani, 2009). The trip advisor focus on cleanliness
feature for deciding accommodation place as well as the location, rooms, sleep quality and value
for money is also being considered.
Passenger transport : Passenger transport is one of the major services included in travel
and tourism business in which passengers are transported to the desired location where addition
services related to hospitality industry are also provided (Hjalager, 2010). Now a days, people are
seen travelling to various places for the purpose of business or personal or entertainment.
Interrelationships between hospitality and travel and tourism
Success of travel and tourism industry depends on the interrelation in between tourism and
hospitality sector. After reaching to the desired destination, first need of travellers is related to
accommodation as well as food and beverage (Ateljevic and Page, 2009). Main role of hospitality
sector is that it is crucial for different types of travel and tourism businesses. Below points define
the link between hospitality as well as travel and tourism sector. These are as follows:
Business travel
Business people are often seen looking for the hotels which are equipped with the
necessary facilities so as they can work in a comfortable environment (Law, Leung and Wong,
2004). The business organization specific search for the business centres attracted with Wifi or
cable internet access meeting rooms and conference areas. However, due to the nature of business
travel this is not always possible.
Conferences and exhibitions
Conferences and exhibitions are essential for national and international travel and tourism
industries. There are various internationals conferences held in UK itself whereby the role of
tourism and hospitality is witnessed to a greatest level (Briedenhann and Wickens, 2004). The
transportation and accommodation cost are witnessed where outside caterers are invited to prepare
food for delegates.
Within the exhibitions, the consumers are provided opportunities to view products or
services prior to purchasing them. For an example : International Tourism Bourse (ITB) an
international exhibition aims at attracting exhibitors from other countries. Such kind of exhibitions
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attracts various of people from around the globe and provides numerous benefits to hotel
companies (Uriely, 2005). The success of such conferences and events is based on the integration
of hospitality and tourism sector.
Visitor attractions
The term visitors attraction is related to get people talking about the places and grab
tourists attention towards services and places. The tourism organization can grab the attractions of
visitors from man-made creations i.e. museums, theme parks, or natural parks and other natural
attraction (Chhabra, 2010). The tourism company shows the attractive destination on their
websites so as to attract the tourist. In addition to that, theme parks are seen with number of
visitors attractions as million of visitors are witnessed at such places. For an example : Disneyland
is evident as the most famous place around the world. Most of theme parks owns their own
restaurants and cafes, that provides a good experience to the visitors for having fun with their
families. The integration between hospitality and tourism is seen in this sector whereby hotels at
the resort have some feature in package holidays.
Aviation
The best example successful integration between travel and tourism sector is aviation
industry. The success of this industry is more dependent on accommodation availability that are
provided by hospitality business (Hospitality provision in travel and tourism. nt.d.). For a fact, the
business of aviation industry might loss due to sufficient capabilities of hotels to satisfy
accommodation needs of individuals. This is the most important for airlines industry to analyse
situations in regard with bed availability for offering flight times and days accordingly.
TASK 2
P2.1- Implications of integration to the hospitality industry 600
Concept and history of integration
The concept of integration was firstly introduction in 1900's, when businesses was focused
towards attain economies of scale that could lead to reduce the operating costs. This was the time
when companies started to provide own products or services by making in house efforts and there
was no outsourcing required at all (Im, 2014). The main motive of integration was to save the
money in house countries however, it restricts companies to increase global presence as well as
market share. Following are the major type of business integrations.
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Vertical integration
Vertical integration refereed to the process in which a company owns other company in
terms of distribution chain and comes in a merger agreement. This is done so as to maximise the
profitability of business as well as to lower down the operating costs. The vertical integration is
characterised with forward, backwards and lateral integration. However, in the countries where
barriers to entry is observed there can be seen a limiting competition in the marketplace
(Hospitality provision in travel and tourism. 2010). Through the vertical integration tourism and
hospitality business can have proper control over suppliers i.e. accommodation and transportation
providers that will limit the competition. The monopolistic behaviour of industry may restrict
through making wide scale integration and by setting government restrictions as competition is
required to improve improving quality within services sectors.
Forward vertical integration allows company to merge its business with another company
in term of distribution chain. For an example: Hotel chain can be decide on purchasing their own
travel agency or tour operator for expanding business. On the other hand, in backward vertical
integration, companies purchases their own suppliers sop as to make proper use of inputs for
organizational effectiveness. For example: tour operator may purchase on own airline industry
and hotels (Charles, 2007). TUI AG come with TUI branded hotel for specificity targeting
business people. Whereas, lateral integration is a process in which merger of two organisations
that must provide direct competition to each other.
Horizontal integration
Horizontal integration is crucial for organizations which want to expand their customer
base, increasing profitability and attaining economies of scale. The horizontal integration comes
into existence at the time when companies merges themselves with a other organization at a same
stage of distribution chain. For an example: Hilton hotels international purchased a other hotel at
Walt Disney World Resort for a consideration of approx €9.2 billion (Najeeb, 2013). This is to be
bring into notice that horizontal integration often complementary in nature and always opposed to
competition. The airlines companies are always seen working with hotel chains and also reap the
benefits of mergers while viewing actual risks. Such kind of integration between airlines and
hotels are seen in airline miles schemes. In addition to that, most of the airline companies search
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for the available accommodation in hotels before secluding their flight, Nonetheless, it is quite
difficult to see due to dynamism and complexity within hospitality and travel industries.
Implications of integration to the hospitality industry
Branding
The success of tourism industry is significantly depends on branding techniques that are
adopted by the leading players as well as the ways in which a message is delivered to target
markets. The clients need to be associated with the brand name of company. For a hospitality or
tourism company brand name is used in order to make loyal customers by offering them a product
or service which matches to their personality. For an example, in case the customers check in to
Hilton hotel,London then they also expect the same check-in procedures in any luxuries hotel of
Hilton, anywhere (Hadjikhani, 2005). The hotels brand name denotes its quality and luxurious
accommodation. Branding is the most famous criteria of integration of hospitality industry in
which the companies focus on making integration with other suppliers so as to increase the brand
image. The group of Hilton Hotel is famous for offering the best facilities of accommodation and
food therefore many tourism companies seeks for making collaboration with such hotels. From the
point of check-in to check out , the company makes the customers feel happy and satisfied so they
will be interested in check-in repetitively. These are are the integral part of branding strategy of
Hilton hotels. The loyal customers create word-of mouth for Hilton Hotel among other people so
they will be influenced to visit same hotel time and time again.
Market control and integration between larger organisations
From the recent time, it has been witnessed that major tour operators of UK have
purchased hotels from all around the world with an aim of increasing global presence and
profitability. With the help of such integrations, these company have become able to control over
the rates of such hotels and are possibly offering many of affordable packages to potential visitors
(Barron, 2008). This has brought tremendous sales increase for tour operates as well as major
hotels. Such kind of activities are also seen beneficial for the hotel companies and seen detrimental
to smaller companies in tourism and hospitality industry.
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The smaller companies always felt threatened at the time of making integrations with the
larger companies in terms of losing their business simultaneously, there is a threats for employees
of smaller companies to loss jobs as larger companies generally take over businesses (Manente
and Montaguti, 2006). However, it could be quite said that the growth of information technology
is limiting the potential of forward integration when talking about holiday packages. This factors
has placed some travel agents from out of business because they are not having sufficient funds
for shifting the physical operations into virtual platforms.
The designing of dynamic packaging was also seen as a major threats for the companies as
many of UK tour operators can be seen in the processes of a closing their retail outlets and
became more focused towards online selling (Uriely, 2005). In addition to that the clients are also
seen benefiting from such technology in terms of lowering the costs over the internet. However, it
is a grave threat to employment opportunity as there will no longer jobs for society.
The activity of direct selling is mostly used by the hotels as these are having own online
booking systems. This direct selling activity has made the hotel reservations process as simple,
inexpensive, and less time consuming. The potential guests and hotels are now becoming more
comfortable in making online bookings for hotels (Chhabra, 2010). However, there is also a
requirement of reservation team within the bookings areas.
Increased globalisation
The integration between the hospitality and tourism industry, there can be seen increase in
globalisation as many more companies re expanding their business within international locations.
The internal globalization can be seen between the employees as they can interact with other
employees who are hired around the world (Ateljevic and Page, 2009). In addition to that the
external globalisation means that clients interact with each other from all over the world. It can be
said that globalisation has made drastic reduction in trade barriers within European Union as a
result EU countries benefited with lower priced products and services.
P2.2- Explaining how integration has affected a hospitality business
Economies of scale and market share: With an affect of integration between hospitality
and tourism industry , there can be seen benefits of economises to scale as the companies
operating in this region are going to have reduction in operating costs due to combined efforts
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(Hjalager, 2010). In case a tour operator takes over a hotel, the cost of investment will be reduced
and the hotel can also attract the number of customers. In addition to that the tour operators may
reduce the cost of designing holiday packages that offers customers benefits.
Standardisation: The integration between the hospitality and tourism industry lead to
standardisation into services (Charles, 2007). However, this is very had to maintain the same level
of standardisation.
Quality :Within the travel industry and hospitality industry, the companies which are
having the best balance between quality of services and value for money, are witnessed as long
time survival (Hospitality provision in travel and tourism. 2010). The integration between the
hospitality and tourism industry leads to provide high quality of services to the customers.
TASK 3
P 3.1 Rationale for a selected project clearly justifying decisions linked to target market
The target market is customers of United kingdom for whom a new hotel is going to be
designed by Hilton hotel. From a intense market research, this is quite important to identify that
there is a need of accommodation facility to satisfy the needs of visitors and local people.
Concept: The hotel will be designed on the concept of eco tourism and this hotels will be
based Chinese theme so as to serve the needs of visitors come from China.
Market research: To assess the feasibility of market concept, the company is going to
conduct a market research. For this process, Management of Hilton hotel is going to conduct a
online customer survey in which the random customers will be asked questions ask questions for
their need analysis (Evans, Stonehouse and Campbell, 2012). In addition to that, business entity is
also going to conduct a competitors' analysis with the helps of strategic analysis tools such as
porter five force analysis and diamond model.
Location: The location chosen for the new hotel in Wales in South east of Great Britain.
Scale: Within the initial stages, the new hotel will only focus on the UK market. The
market size is hence seen very small. In the upcoming years, the business entity will focus of
expanding business in emerging markets.
Funding: For opening a new hotel, huge funds are required and Hilton group needs to put
huge funds in new hotel. The organizations is going to use internal sources of finance to open a
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new hotel in Wales. The retained earnings of hotel will be used to invest in the project, However,
Bank loan will also be used for the purpose of opening new hotel under Hilton group.
Products and services : The new Hilton Hotel which is based on Chinese theme is going
to offer range of hotel products and improved services. As the hotel is mainly n based on Chinese
them, the maximum Chinese dishes in menu will be offered. In addition the services includes
quality accommodation, food and beverages, conference halls, dining hall , rooms, spa, and so on.
Design: The new hotel is more focused towards eco tourism. The more features of new
restaurant includes the following features :
Interior and exterior: The new hotel is focused towards eco based interior and exterior of
the new hotel. The green surroundings will be used all around the hotels and wooden furnitures
will be placed.
Functional area: The major function of new hotel will be to provide the best services to
the customers while offering them improved accommodation facilities as well as fresh Chinese
food so as to improve the experience of customers (Travel, Tourism and Hospitality Operations
Management. 2011).
Brand: The new hotel is going to be designed under the brand name of Hilton Group. The
hotel group is known for its quality of services and improved customers experiences. As the
customers are already known with the brand but company is going to focus on communication
channels to connect people with the brand such as social media and emails.
Customers needs: From the investigation, a high frequency of Chinese customers is found
in Wales and this new hotel will satisfy the needs of customers. The eco friendly environment will
satisfy the needs if customers and fulfil their needs of having a luxurious place to spent their
holidays and conducting business meeting.
P3.2 Develop a plan for hospitality business including the operational requirements of the
business’ organisational structure in relation to human resource allocation.
The development plan for Hilton hotel's new business is mentioned below as:
 Staffing- Every functional department of Hilton hotel will consist of one manager and few
subordinates working under him. At the time of hiring staff the hotel will make sure that
people which are proficiency in speaking English and Chinese are hired. The new hotel will be
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provide services related to Eco tourism and thus only those people will ve hired which are
having adequate knowledge regrading the same.
 Specialities and qualification- while hiring human resources for its new venture, Hilton will
make sure that it hires people which are skilled and qualified (Briedenhann and Wickens,
2004). In terms of education, people which have an diploma or degree in hospitality or hotel
management will be considered. Other than this the target customers will be Chinese which
means staff members needs to have knowledge about Chinese.
 Staffing issues- Hilton may face some issues related to staffing as in seasons it will require
more staff to entertain guests whereas in off season less number of hotel staff will be needed.
The hotel will make sure that adequate staff is available during season.
 Compliance with legislation- The new venture of Hilton hotel will make sure that it easily gets
compile with the laws and legislation which has been framed by government (Law, Leung and
Wong, 2004). It will be required to strictly follow employment law, antitrust law health and
safety laws etc.
 Promotional activities- Hilton hotel will use various kind of tools and techniques of promotion.
Advertisement will be done on television, newspapers and events will be also carried out. The
organization will also provides its new services related to eco- tourism on social media sites
such as Facebook and Twitter. During the initial stage, heavy amount of human and financial
resources will be invested on promotion for new plan.
 Price- During the initial stage, low prices strategy will be adopted by Hilton hotel. This will
help in attracting more and more customers for the new venture. Even if the concept and
services are unique, the hotel will not charge high prices. As soon as the organization will be
able to attract adequate Chinese customers, it will increase prices of all its tourism services.
Conclusion
Form the above report, it can be concluded that the hospitality industry and tour operators
are required to integrate with each other in effective manner. This integration will benefit both
these businesses to a great extent. In addition to this, it can be concluded that at the time of
introducing new services, Hilton hotel will be required to make sure that it implements the
operation plan in best possible manner. From the above report it can be recommended that at the
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time operating for Chinese market, Hilton will be required to make sure that it hires staff that are
capable of speaking Chinese and English.
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