Hospitality Mergers and Business Planning

This assignment delves into the topic of mergers within the hospitality industry. It examines how organizations can utilize horizontal and vertical integration to merge with other entities, outlining the strategies involved. The assignment further explores the consequences of such mergers on businesses. To address common challenges in this sector, a comprehensive business plan is developed as a practical tool for enhancing operational effectiveness.

HOSPITALITY
PROVISION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Discuss the interrelationship between the hospitality entities and wider travel & tourism
businesses....................................................................................................................................1
TASK 2............................................................................................................................................4
2.1 Implications of integration to the hospitality industry..........................................................4
2.2 Impact of integration on a hospitality business.....................................................................5
TASK 3............................................................................................................................................6
3.1 Develop a rationale for the undertaking along with clearly justified decisions....................6
3.2 Develop a business plan for the selected organisation..........................................................7
CONCLUSIONS............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Hospitality businesses serves a major role in the wider travel and tourism industry. There
are different types of hotel depending upon various parameters. Further, these entities links with
the travel and tourism industry in aesthetic ways (Stephenson, 2014). In the present report,
some methods in which hospitality companies integrates the other firms are explained. Besides
this, impact of these integrations will also be examined in the assignment. Further, the
interrelationship between the hospitality entities and wider travel and tourism business will be
identified. Moreover, for obtaining desired outcomes an effective plan is developed for the
chosen company.
The organisation which is selected for the present undertaking is PKF hotelexperts. The
cited firm is a renowned name in the sector. This entity is located at 300 different locations in
over 100 countries. The expanded global business needs superior techniques to manage the
business. Further, the selected firm has integration with other companies belonging to travel and
tourism sector. Thus, in order to manage such a large sized firm, effective planning is required.
Present work will be undertaken as Junior Consultant of the company.
TASK 1
1.1 Discuss the interrelationship between the hospitality entities and wider travel & tourism
businesses.
There exists various hospitality service which can be availed by the consumers. On the
basis of different criteria, this sector can be categorised as follows:
Size of Hotel:In this categorisation, the hotels are segregated on the basis of their size. In
narrower context, they can be divided on the basis of the number of rooms present in the hotel.
For instance: The size can lie between these categories: <200 rooms, 200 to 400 rooms, 401 to
700 rooms, >700 rooms. In addition to this, it should be recognised that the two hotels lying in
same category can compare their strategies of operations and statistics (Lugosi, and et. al.,
2016).
Target Markets: This segregation of the sector covers a wide range of options. According to this,
hotel target many markets to attract large number of customer figures. Some major among them
are explained below:
 Business Hotels: These type of hotels contributes the major of all the units. Business
hotels are primarily catered by the business travellers such as part-time remote workers,
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full-time remote workers of field workers. These companies also rendered some free
services suitable for their guests such as free local telephone calls, breakfasts, etc.
 Airport Hotels: Such type of hospitality companies are majorly opened with an aim to
serve the airline passengers. These people take accommodation from airport hotels
because of overnight travel layovers, cancelled flights and other staff and crew members
of the airline itself.
 Suite Hotels: According to the recent trends and developments, such type of hotels are
being widely used by the people. Such hotels have bedrooms along with living areas
where consumers can entertain themselves (Lashley, C. and Morrison, A., 2013).
 Extended stay hotels: These type of hotels are quite similar to the suite hotels. In this
hotel, there is also Kitchener attached with the living room and bedroom. This is because
the guests stays for a longer pored of time and does not want to spend on food and
beverage facilities of the hotels.
 Serviced Apartments: Such type of hotels renders a long time or permanent
accommodations to the guests. Proper agreement and other documentation is done in the
procedure of such deals. All the facilities are provided in these hotels such as loving
room, bedroom, kitchen, private balcony, etc.
 Resort Hotels: Resort hotels are mainly located on some attractive tourist locations such
as mountains, islands, etc. They are far from the cities and have recreational facilities for
the guests. These hospitality companies renders memorable experiences to the
consumers.
 Bed and Breakfast Hotels: Bed and breakfast hotels are the houses with the rooms which
are converted into overnight facilities.
 Timeshare Hotels: These hotels are also known a s 'vacation-interval" hotels. In this the
guests purchase the ownership for a specified time-period.
 Casino Hotels: These hotels are well equipped with the gambling facilities. In addition to
this, food and beverage services rendered by such entities are recommendable (Lugosi
and et. al., 2016).
Levels of Services: This is the most important and common method of categorising the
hospitality sector. This is based on the financial segregation. They are as follows:
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 World class service: These type of hotels are also known as five-star and renders
luxurious services to the guests. These organisations mainly focuses on the high and rich-
class people as target audience. They provide upscale restaurants, attractive pools, valets
and private dining facilities.
 Mid-range services: These are the 3 or 4 star hotels. Mind-range accommodation services
are availed by the maximum people. This sector attracts the largest segments of the
consumers (CoCkburn-Wootten, Mcintosh, and PhiPPs, 2014). Budget/Limited services: Such hotels renders safe, clean and inexpensive rooms to the
guests. These hospitality industries ensures the providence of basic needs to the
travellers. People can stay here without paying additional cost associated with
unnecessary activities.
Ownership and Affiliations:
 Independent/Single Owners: In this type of businesses, the ownership of the hotels is held
by an individual or it's family. Further, there are no corporate policies or procedures
which are followed by the owners.
 Chain Hotels: These type of hotels are present at various locations. All these branches are
operated by a managers. Further, in combined manner they are managed by board of
directors. Nowadays, the hospitality industries are moving towards this kind of
development.
Besides this, there exists some other components of the wider travel and tourism which are
highly related to the hospitality sector. Some of them are as follows:
 Aviation Companies: There are many companies belonging to aviation sector that have
tie-ups with the companies working under hospitality department. This is the way which
is used by them in rendering packaged services to the consumers. This is helpful for both
the sectors in increasing profitability (Barry O'Mahony and Clark, 2013).
 Business Travel: Nowadays, the increased level of internationalisation has raised the
needs and demand for the businesses to travel across the world. This need is however
beneficial for the hospitality sector. Various business entities have tie-ups wit the chain
hotels where they fix meetings.
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 Conference and Convention centres: The present era of globalisation has increased the
travelling for the business purposes. Such meeting are nowadays performed in the hotels
that the business people can be served with after services.
 Visitor Attractions: Hospitality sector generally grow their roots at the places which can
attract large number of customer size. For the selected company, it has been observed that
it locates at several places which highly draws the attention of consumers. Hence, it is
suggested to the firm to increase their relations with the local visitors attraction centres.
This will help in their promotion thus, increasing profitability of the firm (Lugosi,
Lambie-Mumford, and Tonner, 2014).
The selected organisation, PKF hotelexperts also have relations with some food and
beverages, spa and bar companies for attracting large range of customers that can account in
more profit. In addition to this. it also possess effective relations with the regional visitors
information centres that helps the promotion of the organisation.
TASK 2
2.1 Implications of integration to the hospitality industry.
In order to achieve the business objectives, there exists an effective method which is
integration with other companies that shares same business goals and objectives. There are
basically two types of integration methods that can be used by the PKF hotelexperts. They are
explained in detail as further:
 Vertical Integration: It is the process undertaken by an organisation in which it buys the
other entities in the distribution chain. It is also known as integration by merger
agreement. The rationale behind conduction this is to increase the profitability by
reducing the cost associated with the business operations. In this type of integration
method all the activities that forms the form are solely controlled in an effective manner.
Out of all these actions, the major attention is given to the agenda of economies of scale.
Besides this, it further aims on rendering effective training to the employees so that
internal factors can be controlled (Wijesinghe, 2014).
 As per the vertical integration, the selected organisation can merge with the other
companies on a distribution chain. Further, there are two method in which vertical
integration can be performed, namely forward and backward. In forward integration
organisations do merges with the other companies. For instance: PKF hotelexperts can
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merge with the aviation, tour agents, etc. companies. On the other hand, backward
integration involves the purchasing of the suppliers of the establishment. In context to
the present firm, the suppliers that can be merged are the food and beverages, etc.
 Horizontal Integration: It is a process undertaken by an organisation to increase the
production of goods and services at the same part of the supply chain. It is mainly used
by those firms who are willing to increase their customer base. There are various
advantages of undergoing horizontal integration such as increases economies of scope,
maximised profitability, etc. (Tynan, McKechnie and Hartley, 2014). For instance:
aviation sector work most closely with the hotel chain to render effective holiday
packages to the customers.
2.2 Impact of integration on a hospitality business.
Integration of the organisation is not limited upon to the expansion of the business but it
also alters the extremal factors. The integration of the hospitality businesses has various impacts
upon the effectiveness of the operations of the organisations. Some of them are as follows:
Globalisation: There are various advantages of globalisation of the businesses. It allows
exposure to the different cultures. This knowledge thus helps in mingling various people from
various walks of life. Further, it provides a larger market to sale the services which is necessary
to increase the profit. The availability of the products and services at different locations helps in
increasing the economy of the firm. Besides this, it also ensure technological development of the
organisation. This is due to the fact that in order to attract the consumers from different places,
entity tries to develop the business which assists in gaining advancements (Hay, 2015).
There are also some social causes which are fulfilled by globalisation of the business. It
increase the job opportunities to the regional people residing at the hotel locations. Also,
countries in which the market is expanded receives increased GDP due to globalisation.
However, there are also some drawbacks which PKF hotelexperts has to face due to market
expansion. Out of all, the major is of language and cultural barriers. Also, entity may have to
face seasonal employment which can impact the overall effectiveness of the work.
Economies of scale: It has been observed that the integration of the companies helps in reducing
the operational cost. This reduction in the additional amount helps in enhancing the profitability.
For example, merging of tour operation with an accommodation company will reduce the costs
associated with the promotion of the packages, etc. In this operation, reputation of the forms
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which are to be integrated highly matters. A renowned company possessing effective brand
image will help in increasing the market shares. On the other hand, criticism of the merged entity
will bring reductions in the market value.
Quality: Integration of organisation may increase the quality of services. It is because of the fact
that the work load will be segregated and hence, performance in the work can be achieved.
However, it should be recognised that this is the most unpredictable impact. It is not for sure that
the integration of the hotels with the other sectors will improve the quality of the services. PKF
hotelexperts can increase the effectiveness of the products and services by merging with those
companies that are having specialisation in their respective sector (Hospitality, tourism and
leisure consulting, 2017). For instance: PKF hotelexperts can integrate with the food and
beverage, Spa, etc. firms.
Standardisation: Process of standardisation is complex and consumes so much time and cost. In
context to hospitality sector, in which various variables are present, this method become more
convoluted to be achieved. It may be further recognised that the selected sector has limited scope
of standardisation.
TASK 3
3.1 Develop a rationale for the undertaking along with clearly justified decisions.
With the help of outcomes of the analysis that have performed on the entity, it has been
observed that there are some flaws which are restricting the effectiveness of the business
operations. In order to eliminate these issues, PKF hotelexperts is suggested to develop some
relevant plans (Hay, 2015). Below presents the rationale of the study along with the justified
decisions:
Rationale: It has been observed that the competition in the sector has been raised tremendously.
Thus, in order to deal with this PKF hotelexperts is required to develop effective strategies. The
reasons behind developing this plan is to increase the profitability of the firm. In order to achieve
this goals, the objective is as follows:
 To develop effective products and services in the organisation.
 To design effective services.
 To manage the internal operations of the organisation.
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These selected objectives will help in increasing the attraction of consumers. This will
thus allow to cover a large audience size. In addition to this, all the working departments will be
suggested with the role that should be played by them to bring effectiveness in the operations.
3.2 Develop a business plan for the selected organisation.
In order to achieve the above mentioned goals and objectives, a plan is developed for the
PKF hotelexperts which will help in increasing it's This plan is further categorised into three
stages which will be attained one by one. This segregation will simplify the task in stipulated
time frame. Further, it will help in assigning the respective work to the different departments of
the PKF hotelexperts on the basis of their skills and abilities. The business plan is as follows:
Stage 1: Development In order to assure effective development of the products and services,
PKF hotelexperts is suggested to implement the following development plan: Concept: Concept behind the development of this plan is to increase the profitability of
the PKF hotelexperts by achieving business goals and objectives in an effective manner. Market research: This is the most important phase of the business plan. The outcomes
generated from this stage are one son which the overall designing of the services do lies.
In this, the research team is required to identify the current trends and development along
with the needs and demands of customers from the services of the company. Research
tools that will used are benchmarking, surveys, questionnaires, etc. (Tynan, McKechnie
and Hartley, 2014). Target Market: The varied range of people present possess variable perception towards
the development. It is thus duty of the entity to select the market size which are most
beneficial for the company. This is performed so that the development of the service can
be proceeded for the right segment. The audience will be targetted in this stage. For the
selected company, the consumers will be segmented on the basis of the geographic
locations. Location: There are different locations at which PKF hotelexperts operates. However, it
is necessary to identify the most suitable place at Whitlock development can be
implemented. In addition to this, the present technical era also demands for the services
to be accessed online.
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 Scale: It is that parameter on which the it will be decided that at what range the
development in the service swill take place. Funding: In this stage of the plan, the funds for the development of the services will be
collected. Also, budgeting to the different departments will be done as per their
requirements. Products and Services: This is the most crucial area of an organisation that required high
attention. The selected entity should also analyse the effectiveness of the existing services
and product. In case if they are observed to be else or ineffective they should be replaced
with the modified one Also, development of services should be processed timely to match
the rising trends (Lugosi and et. al., 2016).
 Licensing: For authorised use of the various tools that will be used in achieving the
objective it is necessary to get licensed for all the activities.
Stage 2: Design In order to assure effective designing of the products and services, PKF
hotelexperts is suggested to implement the following design plan: Ambiance: In order to increase the effectiveness of the designing operation, it is
necessary for the entity to maintain a healthy ambiance. This effectiveness in the working
environment will help in creation of appropriate designing. Culture: The culture of the entity should be supportive for the employees working there
and to the guest who avail those services from the firm. For this PKF hotelexperts is
required to develop healthy working environment. Brand: For gaining the customer trust, the company should develop an effective brand
image that helps it in making the name recognisable. For this, quality should be
maintained in the operations. Also, all the guests should be treated effectively. Interior: This is the most significant factor for an organisation belonging to the
hospitality sector. This is the first thing on the basis of which consumers buy the services
and hence, interiors should be effective enough to draw their attraction. Exterior: It is the surrounding location of the firm. In context to the chosen company, it
is recommended to them to select those locations which cover maximum number of
visitors attractions (Lugosi and et. al., 2016).
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 Functional areas: PKF hotelexperts should divide the work roles on the basis of the
skills and abilities of the employees. For instance: marketing staff members should have
ability of selling etc. Customer Flows: In order to maintain effectiveness in the development of services and
product designing stages, PKF hotelexperts are suggested to analyse the numbers and
buying patterns of the services. This will help in appropriate development of the services. Link to the target market: The designed strategies should be realistic and should match
with the needs of the target market. For this, PKF hotelexperts are advised to perform
effective market research and development activities. Customers with individual needs: Services should be rendered in a manner that it fulfils
the needs of individual customers.
 Sustainability: It is highly recommended for the entity to develop its sustainability by
managing all rte environmental factors. For this, the firm is suggested to follow all the
legislation regarding this. Also, effective CSR activities should be included . (Lashley, C.
and Morrison, A., 2013).
Stage 3: Operation: For the effective operation of the business, below are some tactics that
should be used by the PKF hotelexperts. Staffing by functional areas:Selected firm is required to assign work role son the basis
of the skills and abilities of the individuals. It will help in increasing the work
performance. Specialist qualifications:In order to make the services outstanding and worth
remembering it is necessary for the selected firm to possess such employees who have
specialisation in their respective sector. For instance: Effective knowledge f cooking is
required from the hotel chef, etc. Staffing issues: People of the organisation are its key assets which are require to
managed in an effective manner. For the selected organisation, it is suggested that the
HRM should identify the issues that are being faced by the employees and resolve them. Cultural diversity and ways to deal with conflicts: The selected entity works at 300
location and in 100 different countries. In order to mange the operations effectively, PKF
hotelexperts are required possess effective knowledge of all the cultures so that any
conflicts related to them, can be resolved (Lugosi, and et. al., 2016)
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 Recruitment Policies: PKF hotelexperts are suggested to hire right people at the right
place an don the right time. This policy will help in restricting the entry of undeserving
candidate for irrelevant role and on the time when he/she is not needed. Compliance with legislation: It is necessary for all the business organisation to abide the
legal laws and regulation imposed by the government on trading. For selected firm,
legislations for the travel and tourism sector, employment laws, work health and safety
laws, etc. should be followed. Promotional activities: After effective designing of the products and services, PKF
hotelexperts should perform reliable promotional activities. There are various method
that can be used by the form for the marketing such using various channels, online
marketing,. use of social media tools, etc.
 Pricing: PKF hotelexperts should also pay attention on the development of an effective
pricing structure. Fort this they should consider market segmentation on the basis of
economic class too (Stephenson, 2014). This will help in creation of varied services that
can be availed by consumers from different class.
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Illustration 1: Organisational Chart
Source: Lugosi and et. al., 2016

CONCLUSIONS
From the present report, it can be concluded that the hospitality industry possess strong
relationships with the wider travel and tourism sector. This report further covers the ways in
which the organisations can make use of horizontal and vertical integration methods to merge
with the other entities. Besides this, the impact of this merging is also explained in this work
piece. In order to deal with the business challenges it is necessary to have an effective plan that
can act as a guideline. In this assignment, a business plan has also been developed to bring
effectiveness in the operations.
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REFERENCES
Books and Journals
Stephenson, M. L., 2014. Deciphering ‘Islamic hospitality’: Developments, challenges and
opportunities. Tourism Management, 40, pp.155-164.
Lugosi, P.,and et. al., 2016. The hospitality consumption experiences of parents and carers with
children: A qualitative study of foodservice settings. International Journal of Hospitality
Management, 54, pp.84-94.
Lashley, C. and Morrison, A., 2013. In search of hospitality. Routledge.
Lugosi, P., and et. al., 2016. Experiencing parenthood, care and spaces of hospitality. The
Sociological Review, 64(2), pp.274-293.
CoCkburn-Wootten, C., Mcintosh, A. and PhiPPs, A., 2014. Hospitality as advocacy and
vulnerability. Hospitality & Society, 4(2), pp.111-114.
Barry O'Mahony, G. and Clark, I.D., 2013. From inns to hotels: the evolution of public houses in
Colonial Victoria. International Journal of Contemporary Hospitality
Management, 25(2), pp.172-186.
Lugosi, P., Lambie-Mumford, H. and Tonner, A., 2014. Food, drink and hospitality: Space,
materiality, practice. Hospitality & Society, 4(3), pp.225-230.
Wijesinghe, G., 2014. Reimagining the application of sustainability to the hospitality industry
through a virtue ethics framework. Journal of Sustainable Tourism, 22(1), pp.31-49.
Tynan, C., McKechnie, S. and Hartley, S., 2014. Interpreting value in the customer service
experience using customer-dominant logic. Journal of Marketing Management, 30(9-
10), pp.1058-1081.
Hay, B., 2015. Dark hospitality: Hotels as places for the end of life. Hospitality & Society, 5(2-
3), pp.233-248.
Online
Hospitality, tourism and leisure consulting, 2017. [Online]. Available through:
<http://pkfhotels.com/>
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