Travel and Tourism Industry Analysis

This assignment delves into the multifaceted world of the travel and tourism industry. It requires an in-depth analysis of the industry's historical evolution, current challenges, and emerging opportunities. Students are expected to evaluate key factors influencing the sector, such as global tourism patterns, sustainability concerns, technological advancements, and economic trends. Furthermore, the assignment prompts critical thinking about the future trajectory of the travel and tourism industry, identifying potential innovations and addressing crucial issues for long-term growth and sustainability.

HOSPITALITY PROVISION
IN TRAVEL & TOURISM
SECTOR

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Interrelationship between travel & tourism sector and hospitality industry.........................1
TASK 2............................................................................................................................................5
2.1 The implications of integration
to the hospitality industry...........................................................................................................5
2.2 Impact of such integration on hospitality business...............................................................7
TASK 3............................................................................................................................................9
3.1 Develop hospitality business and its decision-making..........................................................9
3.2 Development of hospitality business plan...........................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Hospitality industry includes lodging business, hotel services, accommodation facilities,
bars, restaurants, entertainment, amusement park, theatres, cafes and food and beverages
department. The employees engaged perform all these services which enhance experience of
travellers and visitors by taking proper care of cleaning and hygiene, room services, laundry
facilities etc. Travel and tourism is completely dependent on the hospitality services provided at
different stages. Tourism industry is a major source of employment in UK which has a
significant effect on the growth of its economy.
PKF hotelexperts are a leading business providers in the field of leisure, tours and travels,
parent company being PKF International directed by Adam Maclennan in UK. The firm operates
in more than 100 countries facilitating services of hospitality and leisure to travellers from all
over the world.
TASK 1
1.1 Interrelationship between travel & tourism sector and hospitality industry.
The hospitality industry is growing at an alarming rate that includes services such as
providing leisure facilities, accommodation, restaurants, event planning and theme parks at a
reasonable price. Tourism plays a vital role in enhancing hospitality services of any region, place
or hotel. With the advancement of technology, communication, awareness and information flow,
it has become easier for the tour operators to widen their services overseas (Kotler, Bowen and
Makens, 2010). PKF travel and tourism sector has open doors for people to have a magnificent
leisure time by experiencing hospitality services provided by different hotels and at other places.
Many tour organisations have been in partnership with airline companies, 1-5 star hotels, food
and beverages department as well as amusement park companies to provide a great experience to
customers travelling through their organisation. The recent trends have evolved people to spend
more of their time going out on holidays and vacations which has enhanced the tour operators
business in coming years (Fernandes, 2015).
The integration of hospitality industry within travel and tourism sector has provided so
many amenities to travellers either business persons, family on vacations or college going friends
planning for a trip. The PKF has designed various training programs for grooming their
employees so as to render quality services to visitors. Being a global leader in hospitality
services it has prepared various channels of learning so as to retain competitive advantage by
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improving various services required at hotel, restaurants, casinos etc. Hospitality industry plays a
crucial role in travel and tourism sector by rendering exclusive services to various customers.
The objective of company is to bring in awareness about travel and tourism and its benefit to
economic conditions as well as bridging gaps between markets so as to work in harmony by
sustainable use of environmental resources (Davidson, McPhail and Barry, 2011).
(Source: The travel and tourism industry, 2018)
The PKF facilitates services such as lodging, food, clubs, disco-pubs, entertainment and
bars in their holiday bundle which provides magnificent experience to travellers (Walker, 2012).
The hospitality services of PKF incorporate business travel, aviation, conferences and
exhibitions, visitor attractions, theme parks for children etc. It is considered to be one of the best
standard amongst competitors in providing hospitality services to each and every person without
any discrimination. PKF carter to functions such as taking care of needs and requirements of
travellers by making them feel comfortable at their stay. The company take full care about
cleanliness and hygiene inside the rooms and around the hotels provided (Baum, 2006). Good
quality food and safe environment is also taken care off. Thus, prime motive of the company is
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Illustration 1: Travel and Tourism Industry

to make experience of visitors significant and comfortable as much as possible by rendering
quality services in terms of food, drinks, entertainment, transportation as well as any other
services needed by the guests (Alonso and O’Neill, 2010).
Services of care and responsibility makes visitors feel like home. It is one of the biggest
industry in terms of employment thereby securing different cultures and values of people. The
provisions of hospitality define various regulations in respect of providing services to travel and
tourism sector. The hospitality industry is interrelated to tourism sector in many ways such as
employees providing room services, hotel accommodation, restaurant services, etc. to visiting
customers. However, the company start its services from the point of travelling to what
customers are keen about as well as food habits and activities are taken care off in an extreme
manner (Barrows, 2011). Only by providing quality cordial services, they can flourish their
business in a well groom and stable condition which will earn those profits in future. The travel
and tourism industry comprises of many segments which include planning for lodging,
transportation facilities, shopping destinations, relaxing activities such as water sports and
restaurant facilities for the travellers. The hospitality service is ever changing from recent times
as demand for holidays are growing and many people are spending for vacations to domestic
places or international destinations (Brotherton and Wood, 2008).
The services of hospitality sector provide huge scope for travel and tourism industry as it
attracts and retain customers from various regions and thus ensures higher economic growth of
country by sustainable use of resources and increasing magnitude of foreign exchange. Varieties
of services to enhance customers experience is a vital task and duty of firms providing tourism
business. The company is working on many areas to provide better facilities and services to
customers travelling through their organisation (vertical and horizontal integration, 2011). It
focuses on creating a unique time scale by focusing on various stages and enhancing the price
package by customising it according to customers.
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(Source: The travel and tourism industry, 2018)
There is a chain of distribution in travel and tourism sector which links consumer to
hotels and other facilities includes intermediaries in form of tour operators and travel agencies
which facilitates the meeting of end results (Barrows, Powers and Reynolds, 2012). The in turn
increases economies of scale which allow them to offer better tour packages and prices fitting
customers budget. As now tourism is one of the fastest growing segment of economy which is
bringing in foreign exchange for country and expanding opportunities in form of job
employment and thus, raises standard of living of people in UK. In 2014 there were 1 billion
international tourists traveling to UK which has raised economic conditions and added to GDP of
the country. This social and cultural concept of traveling to other countries in order to explore
different regions and cultures, food and values have increases tremendously providing
opportunities to various firms engaged in tourism industry.
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Illustration 2: The Traditional chain of distribution in the Travel and Tourism Industry

TASK 2
2.1 The implications of integration
to the hospitality industry.
Integrating is a wider term which includes combining activities of various divisions of an
organization so as to achieve better results (Fernandes, 2015). It is a step used to increase
economies of scale and reduce operational cost which will increase the overall profit margin of
organizations. Integration strategy of companies helps to grab a large market share as all
activities are performed inside the business unit cordially which enhances their global image.
Travel and tourism sector is responsible for integrating hospitality services which will increase
its overall image and significance in the market. Hospitality industry and tourism sector; both
require integration of divisions as there are various sectors and sub-sectors working in the
industry which needs to be segregated so as to become a one single unit.
(Source: Hospitality and Tourism, 2016)
Integration of hospitality industry into tourism sector is becoming of immense important
now a days. Big hotels and multinational chains are expanding through merging and acquisitions
of various hotels and resorts thereby enlarging businesses and enhancing services (Barrows,
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Illustration 3: Impact of Global Tourism

Powers and Reynolds, 2012). Various types of integration are seen in hospitality industry
ranging from horizontally and vertically expansion by either merging or by acquiring other
companies.
Marriott International bought Starwood Hotels and Resort in 2016 becoming world's
largest hotel chain comprising of approximately 5000 properties all over the globe. This
integration is horizontal type as one company acquired other working in the consecutive sector
(Hayton, 2012). Another instance which emphasized on vertical integration refers to the
acquisition of Punch Taverns by Heineken UK established itself at third position in country
providing pub business. It believes pubs are an integral part of British culture and proficient and
impelled people will get success in future. Both type of integration are discussed in detail:
(source: vertical and horizontal integration, 2011)
Horizontal Integration:
Integration of organizations horizontally implies union of two different industry to form a
larger organization. Horizontal integration helps in expanding companies customer base and
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Illustration 4: Horizontal and Vertical Integration

market share (Lussier, 2011). Mergers takes place when one organizations distribution chain is in
line with another organizations working.
Hotel Hilton merged with Walt Disney by purchasing its resort. This integration usually
takes place to enhance services provided by two different companies by merging in one single
organization such as airline company merging with hotel business (Frydman, 2013).
Intercontinental Hotels Group
acquired Kimpton Hotels and Restaurants for serving larger groups of customers and enhancing
their experience by rendering quality services. The acquisition by IHG has leveraged its position
in the UK market of boutique and lifestyle.
Vertical Integration:
Vertical integration refers to purchasing of its own suppliers in the distribution chain
which increases productivity and profit margin of the company. Vertical integration could be
done in three ways such as lateral, forward and backward integration. This integration helps in
lowering the overall cost of operations thereby creating barriers for new firms to enter into the
industry (Davidson, McPhail and Barry, 2011).
An instance accompanying Hotel Hilton and London Heathrow airport in collaboration
provides 350 room facilities to guests of Hilton at the airport premises. Since both companies are
different and performs unrelated activities it is known as vertical relationship between the two.
2.2 Impact of such integration on hospitality business.
Integration of business brings in advancement which increases core competencies, newer
technology, and competitiveness which attract customers. Integration helps business achieves
competitive advantage by combining good qualities of two different business units (Baum,
2006). Collaboration of companies create monopoly in industry which renders exclusive services
by dominating the market. It helps in decreasing cost and increasing profits by diversifying firms
activities.
Marriott International by integrating with Starwood Hotels & Resorts in 12.2 billion US$
has impacted the total revenue and brand image company has obtained by such an acquisition.
All the loyal members of Starwood will now be holding elite membership in Marriott. The
acquisition by Marriott has leveraged its position in market with other travel groups which
provides room facilities to hotel guests at a reasonable price in order to earn commission
(Barrows, Powers and Reynolds, 2012).
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A range of sources of information has been used in analyzing the effects of integration in the
hospitality sector. These are:
Quality:
Quality is an important factor whether its services, operations, employee behavior, food,
pubs, bar etc. This is one such factor which needs to be evolved each time. At times with
acquisitions and mergers the quality degrades as new management takes time to gel up in another
organization (Lussier, 2011).
In Marriott the quality has improved as Starwood is a premium brand having elite
customers and management team. The acquisition has resulted in upgrading of status of Marriott
in business market as well as raised its overall profit market.
Standardization:
This aspect comes when integration of businesses takes place. Standard format of
greeting on calls and personally is the prime motive of hospitality provided by hotel industries.
Standard operations needs to be performed so that no guest feels uncomfortable. Performing
standardly is a crucial tasks which takes time and involves cost.
Marriott has various training programs to train new employees and acquired workers
about hoe to perform handling of services (Kotler, Bowen and Makens, 2010). The acquisition
has led company to incur substantial cost on training of Starwood employees so as to perform
services based on standard.
Economies of Scale:
Integration of business helps to raise economies of scale which brings decrements in
operating cost and intensify profitability of organizations. Collaboration generally increases
economies of scale as expansion of companies leads to reduction of cost of daily operations.
Starwood incorporating with Marriott leads to rise in economies of scale as now Marriott
customers have advantage of other accommodation facilities with same hospitality treatment.
Globalization:
The companies are growing with globalization by either acquiring, merging or buying
parts of other firms globally. It has forced organizations to keep up to date with changes so as to
achieve competitive advantage (Fernandes, 2015). At times organizations fail due to lack of
coordination between customers and employees within. It poses threats for companies to make
holiday packages for customers from different countries, culture or religion.
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Marriott's integration with different organizations for providing quality hospitality
services to its customers present worldwide. The integration with Starwood globally has resulted
in increasing its overall position both financially and in terms of customers.
TASK 3
3.1 Develop hospitality business and its decision-making.
The hospitality sector is growing tremendously by incorporating travel and tourism sector
and other basic industries as well. While developing a hospitality business we should ponder
onto various criteria which enhances the leisure time and staying experience of customers. Every
organization is planning to integrate others into it or either merge with big businesses in order to
survive successfully (Walker, 2012).
At this step it is important to evaluate as how integration of a sector will lead to success
for an organization regardless of any field the company goes in. To develop a plan for starting a
new business inside Hotel Hilton for providing facilities such as bars, pubs and night club to all
the guests. It needs to be evaluated in terms of total investment, designing, business size and
location and other crucial factors. Legal procedure needs to be followed by Hilton before
commencing the new business. The hotel needs to take an additional license for serving alcoholic
beverages and other food products which requires government approval prior to its selling to
general public and hotel guests (Chen, Chen and Okumus, 2013).
The management decided to open “Farzan” which will incorporate facilities such as night
club, pub and disco with food and drinks availability. The management has decided several
designs and incorporated it into the hotel lobby which will give an entire different look to the
premises by starting the pub. Another important factor to start the pub inside the hotel refers to
bringing more earnings to hotel as guests will be entertained inside the hotel. Despite of so many
risk the business will lead to profit for the company.
Farzan will have all trendy and innovative design which will influence people to stay
longer and enjoy thereby making themselves comfortable having food and drinks at their table
(Frydman, 2013). The management also needs to acquire different legislations to start a pub
inside hotel which is expensive and time consuming. The pub will influence general public of
UK including the guests at hotel as well since Hilton has a benchmark set in market and Farzan
is its subsidy.
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The management needs to undertake planning of Farzan the pub inside hotel Hilton as it
will evolve various measures to correct deviations. Another thing management should look into
is to research about the recent developments and current trends going around in markets so as to
plan accordingly (The travel and tourism industry, 2018). Hilton is a multifaceted hotel chain
operating globally, a slight dissatisfaction by customers may hamper its overall brand image.
Thus, setting up of pub and night club should be critically evaluated as it will require huge
capital investment as well as involves brand image and goodwill (American Hotel & Lodging
Educational Institute, 2018). Various crucial decisions need to be taken at development stage so
measures could be used to rectify problems. The incorporation of pub will bring in footfalls in
hotel as the recent culture is totally based on night life for refreshing oneself with friends and
relatives. The company needs to position itself within the market so as to grab larger market
share.
3.2 Development of hospitality business plan.
This step includes the allocation of human resources to different segment so as to mange
all operations effectively. The business plan for Hilton hotel at the heart of London requires to
make market research and designing of operating modes as well as development of resources
which will be needed to execute the overall idea. This is an important stage which will decide
overall growth of hotel while enhancing its brand image (Barrows, 2011). The human resources
here plays a crucial role in enhancing the services offered by maintaining quality standards
throughout the hotel chains. The manager needs to recruit personnel who are skilled and
experienced so as to tackle customer demands actively.
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(Source: World Travel & Tourism Council, 2018)
Stage 1 - Development:
•
Concept:
The concept of business needs to be evaluated before starting any other operations. The
idea about developing of pub and night club inside hotel requires to set objective and vision
which needs to be fulfilled by Hilton managers (Barrows, 2011).
•
Market research:
Hilton needs to go into a strategic research about current trends and recent developments
so as to grab market share. It is recommended to carry out research about customers
expectations, market implications and disposable income by hotel managers so as to implement
the overall concept effectively.
•
Target market:
Managers at Hilton are required to identify target customers for night club and pub
“Farzan”, so to determine prices and entry fees which is subject to changes later on (Fernandes,
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Illustration 5: Requirements for developing a Plan

2015). It will mainly comprises localities visiting hotel for either business purpose or for
corporate meetings, families, college friends, newly married couples and hotel guests residing in
the premises of Hilton.
•
Location:
Location will not be a big factor for Hilton as it operates globally but to start new
business it should choose one location around UK which is centre of city so as to enhance its
operations and creates an image of night club and pub (Davidson, McPhail and Barry, 2011).
• Scale:
Scale of operations will depend on the generic location and size of the pub. Hilton needs
to carry out a plan to develop strategies to capture market and specific size to virtually fit the
hotel design.
• Funding:
Fund is a crucial factor to be taken into account before starting a new business. Hilton has
many investors who will invest in for Farzan and loans are available from banks. Though
company had reserves for starting new projects as well (Barrows, 2011).
• Products and services:
The products and services concept for pub and night club will include all essential
elements generally needed. Hilton has a long list of products to be provided which will cater to
the needs of customers ranging from food, beverages, catering services, dance platform,
costumes , party props etc.
• Licensing:
The hotel needs to apply for licence before commencing new business. The hotel needs to
take an additional license for serving alcoholic products and late night operating licence (Lussier,
2011).
Stage 2 - Design:
• Ambiance
:
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Hilton should focus on highly decorative design and less lightening which will soothes
and refreshes customer moods. The generic atmosphere inside pubs should be avoided so as to
give a different image thereby lifting up brand image.
• Culture
:
The motive is to render exclusive services to customers while relaxing in their chairs with
light music to enhance their taste and food experience (Kotler, Bowen and Makens, 2010). The
Hotel manager is continuously checking on hygiene and quality of services provided by staff
equipped with special training to maintain standard of food and cleanliness.
• Brand
:
Hilton has its own brand which is multifaceted and thus requires not much positioning of
new business.
• Interior
:
The interior should not be much attractive as night clubs mainly starts in night with
minimum lightening. The dance floor and food area though has to be decorative with light
curtains and flowers (Barrows, 2011).
• Exterior
:
The exterior will remain the same as over all Hilton has so as to create an image in minds
of customers that both are owned and operated by Hilton. Exterior design influences customers
to visit the new establishment. Attractive curtains and basic yet soothing atmosphere attracts
visitors.
• Functional areas:
New methods of functioning should be incorporated. The online banking and payment
should be focused on and modern ways of delivering should be emphasized upon.
• Link to target market
:
Designing is crucial for linking customers with their culture and provides a feeling of
comfort with the hospitality gesture being served (Chen, Chen and Okumus, 2013).
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• Customers with individual needs:
Every person comes for satisfying hiss or her needs and manager should focus on how to
provide services so as make a customer happy. Rendering quality food and services and an
atmosphere of enjoyment will help soothe customers.
Stage 3 - Operation:
• Staffing by functional areas:
Staffing should be done carefully and only skilled and experienced candidate must be
selected (Davidson, McPhail and Barry, 2011).
• Specialist qualifications:
Employees should be holding specific qualification necessary for hotel management at
Hilton so as able to mange new business.
• Staffing issues related to seasonality:
Retention of qualified and skilled employees needs to be taken care off by selecting
genuine candidate who aims to serve the company for longer period (Alonso and O’Neill).
• Cultural diversity and ways to deal with conflicts:
Employees should be able to deal with situations of conflict and work according to values
and ethics thereby maintaining cultural background.
• Recruitment policies and procedures
:
Various rules and policies needs to designed for recruitment and screening process.
• Compliance with legislation:
At Farzan employees are required to work under set legislation by taking care of quality
of raw materials to be procured till delivering of services to customers (Barrows, 2011).
• Pricing:
Hilton needs to identify the pricing strategy it will incorporate into new business. Fair
pricing should be done and promotional activities needs to be undertaken.
• Promotions:
Hilton should follow strict promotional campaign for advertising about new business
through newspapers, radio, magazines and television.
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CONCLUSION
The report shows how hospitality services are vital to travel and tourism sector by
integrating and expanding business globally. The role of hospitality is vital to any industry
especially tourism as it is fast growing and providing large scale employment to people thereby
increasing economic growth. Hilton by acquiring services of others and developing another
business plan has helped build an image in the market.
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REFERENCES
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Barrows, C. W. 2011. Introduction to the hospitality industry. John Wiley and Sons.
Barrows, C. W., Powers, T. and Reynolds, D., 2012. Introduction to Management in the
Hospitality Industry. NJ: Wiley.
Baum, T., 2006. Human resource management for tourism hospitality and leisure. Thomson
Brotherton, B. and Wood, R. C., 2008. The SAGE handbook of Hospitality Management. Sage
Publishing.
Chen, H. J., Chen, P. J. and Okumus, F., 2013. The relationship between travel constraints and
destination image: A case study of Brunei. Tourism Management. 35. pp.198-208.
Davidson, G. C. M., McPhail, R. and Barry, S., 2011. Hospitality HRM: past, present and the
future. International Journal of Contemporary Hospitality Management. 23(4). pp.498-
516.
Fernandes, T. 2015. How can we encourage travel and tourism is ASEAN?. International Trade
Forum. 2. pp. 34.
Frydman, R., 2013. Rethinking Expectations: The Way forward for Macroeconomics. Princeton
University Press.
Hayton, J., 2012. Global Human Resource Management Casebook. Taylor & Francis
Lussier, R., 2011. Management Fundamentals: Concepts, Applications, Skill Development.
CENGAGE Learning
Kotler, P., Bowen, J. T. and Makens, J. C., 2010. Marketing for hospitality and tourism. Pearson.
Walker, J., 2012. Introduction to Hospitality. Prentice Hall.
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