Hospitality Provision in Travel and Tourism Sector - TUI

HOSPITALITY PROVISION IN
TRAVEL & TOURISM SECTOR

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
1.1 Interrelationship between hospitality and travel and tourism businesses .............................3
TASK 2.................................................................................................................................................5
2.1 Analysis of implication of integration of hospitality industry...............................................5
2.2 How integration has affected hospitality business.................................................................6
TASK 3.................................................................................................................................................8
3.1 Rationale for project to justify decisions linked to target market..........................................8
3.2 Plan for operational and human resource allocation..............................................................9
CONCLUSION..................................................................................................................................13

INTRODUCTION
Hospitality industry provides various services such as lodging, event planning, theme parks, transportation, travelling etc. there
are various sectors in hospitality services which includes restaurant, hotels, travel etc. hospitality services provided by different
companies are gaining popularity day by day. TUI will form part of this study. TUI is a travel company which provides various
services to its customers such as hotel, food and beverages, retail stores etc. TUI is having 1800 agency. This study will help in
understanding about the role of hospitality in travel and tourism sector. This assignment will also assist in analyzing the implication of
integration to hospitality industry. This study will also explain impact od integration on hospitality business. This task will assist in
developing a plan for hospitality business which will include the operational requirement of organization.
TASK 1
1.1 Interrelationship between hospitality and travel and tourism businesses
Introduction
Hospitality business provides various services to the customer and give their contribution in the national income of the
country. Hospitality business include hotel, restaurant, food and beverage and travel and tourism services to its customers. Tourism
sector plays a great role in the growth of hospitality industry. Now a days, this industry is facing a tough competition from the new
emergence in this industry. Travel and tourism generate more revenue from the other sectors of hospitality industry. This sector
provides various facilities to satisfy demands of customers in order to retain them (Boniface, 2017). Hospitality industry includes
amusement park, hotel, restaurant and travel and tourism sector. Tourism sector provides various travel packages in order to attract
potential customers and retain existing customers.
Main body

Hospitality industry offers services such s accommodation, transportation, food and beverages etc. tourism sector is involved
in providing travel services to some destination were the tourist can experience recreational and leisure activities. There is an
interrelation ship between hospitality and travel and tourism because hospitality industry is the supplier of tourism services. Different
sector of hospitality industry is interrelated due to dependence on the various services provided by each sector. For example, hotel
sector is interrelated with travel and tourism sector because hotel provides accommodation and food services to the tourists and travel
organization provides transportation of tourists from one place to another. TUI group is involved in travel and tourism business and
not it is merges with airline company and assigned a new name of organization as “first choice Airline” to increase its services. TUI
offers various services such as food, accommodation, transport and travel packages etc (Cook, Hsu and Marqua, 2014). This service
assist TUI in increasing their brand name and helps in attracting more customers towards the brand. Intercontinental Hotel group
(IHG) is involved in providing accommodation services in UK. This company is providing services in various countries to increase
their brand image and attract more customers. IHG is having more than 7000 employees. It provides accommodation, food and
beverages services and many more. IHG in order to serve its customers provide better services by providing them quality food to its
customers. IHG in order to increase its customer base create contact with travel agency to fulfill the demand of customers with
reasonable prices in different countries. IHG is a 5-star hotel and provide high quality services at reasonable prices to its customers.
IHG provide catering services for which it hires contractors. World travel market is a global event for the travel industry which meet
industry professionals and conduct business deals. With the helps of World travel market the organization get the information relating
to the various trends emerging in the travel industry. World travel market assist in providing the information to the customers
regarding contacts, contents etc. With the helps of World travel market IHG can gather the information relating to the TUI which
helps in contacting with the TUI to gain more customers by maintaining contacts with the other travel companies through use of
World travel market.
Summary

From the above it has concluded that the above businesses are interrelated as they are depended on each other to offer better
services to its customers. IHG in order to increase its customer base is dependent on TUI to attract tourist to provide them
accommodation and food services. TUI design its travel package by considering the services of IHG , so that customers are provided
with all the facilities relating to their journey. Both the organizations are depended on each other. TUI and intercontinental Hotel
group have to make an agreement in order to merge their resources to provide high quality services to their clients (Cornelissen,
2017). This merger helps them in increasing their profitability. There is a strong relationship between TUI and Intercontinental hotel
group because TUI is providing various services such as pre-booking in hotels and transportation facilities. This merger will assist
TUI and IHG to fulfill the demands of customers by providing them all the facilities relating to their journey.
TASK 2
2.1 Analysis of implication of integration of hospitality industry
Integration assist in increasing organization profitability and also helps in improving the quality of services provided to its
customers. Hospitality industry in order to attract more customers implement integration which assist them in increasing their sources
to attract customers to their brand. Integration between different sectors of hospitality industry assist various sectors in enhancing
their business. Integration between helps in increasing organization knowledge about different tools and techniques for proper
coordination and to provide high quality services to customers. TUI group in order to attract more customers to increase their revenue
integrated with different hotel and airlines organization. Integration consist of Horizontal and vertical integration.
Vertical integration: Vertical integration is a strategy where the firm buy its supplier or buys another company in distribution
channel. Vertical integration assists the firm in increasing their efficiency by minimizing their cost. Vertical integration is helpful for
the organization because it will integrate their distribution channel and reduce the competition for the firm. TUI in order to increase its
profits and reduce the cost adopt vertical integration in which they train people from inside rather than hiring them from outside to
provide its services at different places without reducing the standard of their quality (Iyer, Dey and Chakraborty, 2015). TUI by

integrating with Magic life which is now known as TUI magic life which have increased their customers base and provide high quality
services to its customers. Vertical integration between organization make them a single unit which have their common goals to
increase their profitability. Integration require use of high technology to improve supply chain management. With the help of vertical
integration TUI is entering into new market segment. Integration between TUI and magic life will increase their reputation in the
market and also assist in increasing their profitability.
Horizontal integration: Horizontal integration means two organization integrate to make a bigger organization. Horizontal
integration takes place when the two firm are involved in business of identical product and services. Horizontal integration lays
emphasis developing a new organization by combining two business. TUI group in order to make a bigger organization has merged
with First choice Airways to increase their productivity and gain a competitive advantage. Horizontal integration is needed for those
firm which want to increase their size and productivity. Horizontal integration helps in providing various outcomes such as work
efficiency, profitability etc. TUI by implementing Horizontal integrations have increased their brand name in different countries.
Integration is needed to grow the business and attract more customers towards the business. Integration assist organization in
increasing brand image by providing best quality products using high technology. Integration is useful to grab opportunities for
enhancing the business growth. Integration helps in achieving the economies of scale which means that as the scale of operation
increases cost of operations decreases which result in increase in the profit margins.
2.2 How integration has affected hospitality business
Integration have affected hospitality business by providing them competitive advantage by integrating the business. Integration
is much needed to attract more customers towards the brand. It lays emphasis on utilizing the resources in the best ways to increase
their revenue. The Impact of integration on TUI group are as follows:

 Cost integration: Horizontal and vertical integration assist the organization in spending their money to improve their service
quality. Cost integration assist the firm in investing in latest technologies. They set prices for holiday packages and various
other services offered by company. Cost integration affect the hospitality services to improve their functioning in order to
provide high quality services to customers to increase their brand image. Organization main focus is to reduce the cost of
operation to increase their profit margins. Cost integration has affected hospitality industry as it involves high amount of
investment to perform various functions regarding development of business.
 Technology use: Technology integration has affected the business of hospitality industry as it provides new ways to enhance
the operation of organization. Technology integration assist organization in adopting new technologies to increase their
productivity. Technology integration provide various benefits to TUI such as increase communication with end – users by
providing them information about their packages and travel using latest technology (Xiang and et.al., 2017). Technology assist
in coordinating the activity of integrated organization which assist them in decision – making.
 Globalization: Integration have assisted the organization in increasing their global presence by enhancing their brand image.
Globalization helps the firm in removing trade barrier which affect the hospitality industry in increasing their business over
different countries. There are various factors which affect the organization in increasing their global presence such as culture,
rules and regulation.
 Lack of knowledge: Lack of knowledge about market and consumer affect the hospitality industry due to integration of
companies. Integrated companies need to make new strategies in order to attract more customers to buy their products and
services. TUI after integration horizontally and vertically have to develop new strategies to know about market and their
competitors in order to have knowledge about their customer demands. TUI business got affected due to integration of
organization because the employees of TUI were having lack of knowledge about new customers due to that they were having

complication in handling the new customers. Management of TUI also provide training to its employees in order to improve
communication between them to influence the customers to buy their travel packages.
 Economies of scale: Integration of organization in hospitality industry helps in attaining economies of scale. Economies of
scale assist the firm in reducing the operating cost which will increase the overall profitability of organization (Rogerson,
2017). This will provide assistance to enterprise in increasing their market share.
 Quality: Providing quality products to customers is the main motive for the integration in order to increase their customer base
which assist in improving overall profitability of firm. It is possible that after integration there is no improvement in the quality
due to which overall profitability of firm reduces. In vertical integration it has been identified that workers are not able to
understand new strategies due to which operations of organization get affected.
TASK 3
3.1 Rationale for project to justify decisions linked to target market
Hilton is having many restaurants and now it is going to start a new restaurant in which it will provide those dishes which are
not served by its other restaurant. It will provide dishes such as continental, north Indian, Chinese , Italian etc. It will provide famous
dishes of various countries. This restaurant will be opened at a new location in London which is place of attraction for many
foreigners. The target market for opening a new restaurant by Hilton will improve their brand image and provide them competitive
advantage to increase their profitability by attracting customers which for various food services offered by the organization. Project
rationale are identified by analyzing the target market. Target market assist the organization in providing various services to that
market in order to attract more customers. Hospitality industry in order to attract more customers provide their customers with
accommodation and food services. Hotel for providing Accommodation and food services must be identifies which provide cost
benefit and is made available to customers. Hilton in order to increase their customer base is planning to increase their services such
as it is opening a new restaurant to attract more customers (Öz, 2015). Hilton in order to attract customers have increased their global

presence and providing their services such as food, accommodation transportation etc. in different countries. Hilton to gain a
competitive advantage is implementing various new marketing strategies to attract their potential customers and retain their existing
customers. The Target market for the new restaurant will the people of all age group as there is increased in demands for customers
towards the different kinds of food. The target market of the new restaurant will help Hilton in increasing their brand image and will
increase its profitability.
Hilton is providing various discounts and offers in order to attract more customers towards the brand. It involved in hotel
business are increasing their product line make food products according to the demand of customers. New restaurant is located at a
place where they can attract their target market to increase their profitability. Location of the hotel is an important factor to attract the
target market for providing the product and services of organization. The Hotel has decided to open a new restaurant as it will help to
gain more market share by increasing their level of services and providing the customers with better services.
There are many ways to attract the target audience towards the products and services of firm. Target market is essential to
know about the organization potential customer in order to fulfill their demand to retain them in business ( Law and et.al., 2015).
Target market can be analyzed by understanding about demographic factors along with socio- cultural factors. New restaurant which
is opened by Hilton will provide various facilities to the customers such as fine dining etc.
This project will provide information regarding the new restaurant plan of Hilton which will operate in the hospitality industry
and will dish such as north Indian, continental, Romanian etc which is not provided by its other restaurant. The target market for this
restaurant will be the people of all age group that is men , women, old people and young people and mainly the tourist which are
coming from all over the world. The new restaurant by Hilton will provide dishes of various counties in order to attract more tourists.
The restaurant will be located new place in London , UK as there is high demand for the restaurant. The restaurant will conduct the
market research in order to identify the demand of the food products which thee restaurant will provide. The restaurant will conduct
the primary and secondary research for the gathering the information relating to the taste and preferences of the customers. The

reason for selecting this project is due to increasing demand of the customers relating to the various hospitality services. The
customers are getting more demanding towards the hospitality industry. The restaurant will be profitable by staring its operations due
to the growing demands of the customers.
3.2 Plan for operational and human resource allocation
Development of plan for hospitality business the operational requirement of the business and organizational structure along
with human resource allocation include three stages in development plan that consist of development, design and operation. Hilton
Hotel is going to open anew restaurant to provide attract more customers towards the organization. The new restaurant name will be
“Cravityzone”
Stage 1: development
Concept of business: The concept of new restaurant will include its vision, mission and objective in order to achieve the
objective of organization. The general idea behind new project is expansion of business. The vision of new restaurant is to gain high
market share and have more customers. Objectives of Cravityzone opened by Hilton will be to provide their customers with high
quality food to gain their loyalty for the hotel. Mission of the new restaurant is to achieve more market share and increase their
customer base to grow their business by increasing their profitability. The business will be operating in the hospitality industry and
will provide the food services to the customers.
Market research: Project development needs market research in order to have understanding about various factors of market.
The market research includes factors within the location of hotel, current GDP of the location, income level etc. market research also
includes the competitors’ products and services in order to identify the level of competition (Xiang, Magnini and Fesenmaier, 2015).
The market research conducted by the Hilton hotel for opening a new restaurant will help the organization in identifying about trend
of restaurant sector in the market. Market research will include primary research and secondary research for gathering the information
about the market and trend existing in the market for restaurant.

Target market: organization in order to develop a plan must identify the target market which is needed to provide the products
and services of business. Target market can be identified by the use segmentation such as psychological segmentation, behavioral
segmentation, geographic segmentation etc. demographic segmentation include income, family size, purpose of purchasing, lifestyle
etc. The target market for Cravityzone which is going to open by Hilton hotel will be the people which are able to spend money on
food and mostly those that are willing to spend money on food.
Location: Cravityzone of Hilton hotel in order to attract more customers will provide its services in UK and will provide the
food services according to the demands and requirements of customers. The new restaurant will be situated in London ,UK as there is
more demand for this sector and ton gain more market share and attract customers Cravityzone will be opened there.
Scale: The restaurant will be open at a large level because of strong brand image of Hilton hotel the new restaurant will
operate at large level and will provide its customers with different styles of food with various facilities.
Funding: The Hilton hotel for opening a new restaurant at London will require funding to open a restaurant at large scale. It
will use different source of funding such as retained earning and bank loan to get funds for opening a new restaurant. Retained earning
which will be used by Hilton includes the earning from the profit earned by the organization. Bank loan will be used by Hilton to open
a new restaurant as it have fixed rate of interest.
Products and services: The products and services which will be offered by the restaurant will include food products and
various services such as complementary services for those customers which are having a bill amount more than the specified limit.
The restaurant will provide home delivery of the food ordered from restaurant. Cravityzone will provide mobile food services to the
customers to attract more customers towards the restaurant.
Licensing: There are various license which Hilton hotel have to acquire for opening a new restaurant. It includes food service
license, business license etc (Kim and Law, 2015). this licenses Hotel have ton acquire in the name of new restaurant for starting its
operation and providing the food services to customers.

Staff : the restaurant will require the following person for operating its activities. It consists of dishwashers, chef, cooks,
serving staff, bus-washer, manager etc.
Stage 2 : design
Ambiance: Ambiance is related to the inner environment of Hospitality business. The restaurant interior will be designed in
attractive manner to gain attraction of customers towards the restaurant. The restaurant will make the interior of attractive by
implementing creative ideas to decor the restaurant.
Culture: Culture of organization is reflected through the services. The restaurant will provide importance to the values and
belief of the customers by providing them services according to their requirement. The restaurant will have positive culture which will
provide satisfaction to the customers. The restaurant will be providing occasional changes in the interior according to different
function or festivals to provide understanding to the customers about culture and traditions.
Brand: Brand name is an important factor for attracting customers towards the organization. Hilton hotel have a strong brand
image which will help the new restaurant in attracting customers towards the organization. The brand image of Hilton will assist in
Cravityzone in increasing their profitability and market share.
Interior: The interior of the restaurant will be designed in the attractive way and will have various arrangements for its
customers such as reception designed will be attractive to gain the attention of customers. Also, the restaurant will have customized
tables and chairs etc.
Exterior: it includes surrounding area of Hospitality business. It includes parking, garden area etc. The restaurant which will
be opened by Hilton will have exclusive parking areas for the vehicles. The exterior walls of the restaurant will be designed to
provide attractive look for gaining attention of customers.

Sustainability: sustainability of hospitality business is measured by identifying the abilities of business. It includes changes
within the current trends and perspective of customers. The Cravityzone which will be opened by Hilton Hotel will provide
sustainability by reducing the food wastage. Also, it will ensure that the water reduction is less at restaurant by providing customers
with tissue paper or sanitizer for hand wash.
Stage 3 Operations:
Staffing by functional areas: it includes different functions areas of hospitality business such as finance, management team,
transport system housekeeping staff etc. The restaurant that will be opened by Hilton will have different staff for its different activities
as it will be opened at larger scale. The restaurant will have account department, kitchen department, management team etc. for
performing various activities.
Pricing: pricing strategy is developed by organization on the basis of current market prices. Penetration pricing strategy will
be beneficial for Cravityzone to attract more customers with low prices. The restaurant will be opened by Hilton which will enter the
market with low prices to gain competitive advantage by offering customers with low prices.
Specialist qualification: There are different qualification needed for working in the restaurant. Cravityzone by Hilton hire the
employees on the basis of qualification which will enable the person to work for a particular job role at hotel. The restaurant will hire
the chef on the basis of expertise present in making the food. The employees will be hired on the basis of minimum qualification
required for the particular job role.
Compliance with policies: There are various rules and regulation which must be followed by restaurant. Rules and legislation
are made in order to provide health safety to customers, food and hygiene policies etc. The restaurant which will be opened by Hilton
must ensure that it comply with various laws and legislation relating to employment and consumer protection laws to protect
customers from various harmful diseases.

Operational needs : It will include the cooking equipment , sanitation needs , refrigerator, system and software for recording
sales, tables and chairs etc.
Budget for New restaurant
Particulars Year 1 Year 2 Year 3
Cash inflows
Opening cash balance 10000 25000 42700
Revenue 45000 51750 56925
other income 2000 2000 2000
Sum of cash inflows 57000 78750 101625
Cash outflows
Administration expenses 15750 18113 19924
Selling expenses 11250 12938 14231
Promotional expenses 5000 5000 5000
Sum of cash outflows 32000 36050 39155
Cash deficit / surplus 25000 42700 62470

CONCLUSION
From the above study it has concluded about interrelationship between hospitality and travel and tourism business which has
included different sectors of hospitality industry such as tourism sector and hotel are interrelated to provide various services to
customers. This study has provided with understanding of integration which has included vertical and horizontal integration and also
their impact on hospitality business. This task has provided with rationale for selected project. Furthermore, this assignment has
provided with development of plan regarding operational requirement and human resource allocation which has included three stages
consist of development, design and operation.

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