Hospitality Provisions in Travel and Tourism Sector

HOSPITALITY
PROVISIONS IN
TRAVEL AND TOURISM
SECTOR

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Interrelation between hospitality and travel and tourism sector.......................................4
TASK 2............................................................................................................................................5
2.1 Analysis of implications and effects of integration to hospitality sector.........................5
2.2 Impacts of integration.......................................................................................................6
TASK 3............................................................................................................................................8
3.1 Rational for a new hospitality business/project................................................................8
3.2 Project proposal................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Hospitality and travel tourism sector are interrelated and plays an essential role in the
development of an economy. Both of these sectors are growing at a fast speed in UK. Travel and
tourism sector provides the travelling services to the customers who visit a particular country for
their vacations or business purpose (Hospitality Provisions, 2018). The hospitality sector
provides accommodation, food and transportation facilities to these people so that their
comfortable journey can be ensured which will also satisfy their needs and requirements.
Hospitality sector provides the quality based essential services to the people to whom travel and
tourism sector provide opportunities to travel the world. This report will cover the interrelation
between hospitality sector and travel and tourism sector along with the implications and impacts
of the horizontal and vertical integration of hospitality sector in the travel and tourism sector. In
this report, a project proposal will also be developed in which target market, location, operating
model including staff, and design etc. will be included. Further, a rationale will be developed for
a new project for determining the concept of new project.
TASK 1
Introduction of company
The taken firm in this assessment report is the TUI group of UK. TUI group is a Anglo-
German travel and tourism company having headquarter in Hannover, Germany. This group is
the largest travel and tourism company in the world which is operating travel agencies, hotels,
airlines, cruise ships etc. The group is providing services such as accommodation, travel, food
and other facilities to customers from United Kingdom to the nation they wants to visit. The
group is operating more than 300 hotels and 1800 travel agencies through the world. The group
is employing more than 70,000 employees throughout their hotels and agencies. The
commitment of the group is to provide highest quality based accommodation services, travelling
services, for the comfort and satisfaction of their customers (About TUI group, 2019). The
mission and vision of the hotel is provide a good experience to the visitors through their various
types of services such as accommodation, food and transportation for ensuring their satisfaction
and comfortable journey while travelling. The revenue of the company in 2018 was €19,523.9
million, operating income for 2018 was €971.5 million and net income in 2018 was €780.2
million. The group has six European airlines which is the largest holiday fleet in the Europe.

1.1 Interrelation between hospitality and travel and tourism sector
Scope refers to the combined objectives and requirements which are essential for
executing a project. By using the scope, managers can determine the estimated costs and the time
which is required for completing the project (Scope, 2019). Whereas Size in business refers to
the area or location in which company is operating its business functions. The scope and size of
the TUI is very wide as it is operating its business operations in various countries. Also the group
is operating more than one business under the brand name of TUI group. There are various travel
providers in the UK who are providing their services to the customers ranging from travel to the
accommodation, food etc. Due to these services, a large number of customers are attracting
towards the UK and as a result the travel industry is growing at a fast pace. Hospitality and travel
and tourism sector are interconnected due to which the scope and scale of development of these
two sectors is high. A large number of travel firms are collaborating with the hospitality firms so
that better services can be provided to the travellers for ensuring their satisfaction (Abubakar and
Ilkan, 2016). Also by this collaboration, there are good chances that both of these sectors can
meet the expectations and needs of their customers for gaining their trust and loyalty.
Relationship between hospitality industry and tourism sector
There is strong and better relationship between tourism and hospitality organisations.
Hospitality sector is a major part of travel sector as hospitality sector provides quality based
accommodation and food facilities to travellers for spending their quality time during the
journey. These both needs help from each other in order to gain high growth and success at the
market place. Hospitality sector covers hotels, villas and restaurants who provides services such
as transportation, beverages, food, staying, conduct the few activities for relaxation and many
other to the customers. The travellers search the local restaurants and hotels for staying in a
particular location which are provided by hospitality sector. These both sector are contributing
their efforts in developing the economy of UK. Their interrelation is as discussed below:
Package Holidays: In this world, hotels and restaurants are partnering with the tour
agencies in order to provide the combined facilities to customers in their chosen tour package. In
return, hotels owners charge a fixed amount of share in the profit earned by the tour agency. For
example: When customers choose economic budget then they does not require a five star
accommodation. The managers of the Tour agencies needs to ensure that the hotels are providing

good quality based services to the customers on a continuous basis in order to ensure their
satisfaction.
Business travel: A large number of hotels in UK are providing suitable facilities to the
people who are travelling for their business purpose such as Wi-Fi facility, business centres,
internet, conference and meeting halls etc. so that these travellers can work comfortably. Also
the business persons has proper budget while travelling due to which they can grab the services
even at high prices for their good experience.
Aviation: The airlines industry heavily depends upon the accommodation services for
ensuring their success and development in the market. If the hotels does not have space for new
visitors then it can leads to the failure of this industry in providing effective services to the
customers. The business firms of aviation industry needs to ensure that the hotels are
coordinating with the aviation firms in order to provide proper accommodation services to the
travellers. Also the type of airlines provides different types of services. For example: Budget
airline provides beverages and food at additional charge whereas top class airlines provides these
beverages and food included in the flight budget. There are also luxurious flights which provides
luxurious seats, bar facilities and silver dining to the customers for enjoying their journey.
TASK 2
2.1 Analysis of implications and effects of integration to hospitality sector
Integration with other firms is essential for the hospitality firms in order to share their
customers and resources for enhancing the productivity. The shared goals of both integrated
firms can be accomplished by adopting the updated technology and tools which also assist in the
better coordination. The taken firm i.e. TUI group has also integrated with several hotels and
travel firms for using their resources in enhancing the productivity and performance. Integration
is also helpful for the firms in expanding their business and for achieving their shared goals
effectively. Usually vertical and horizontal integration is used by the organisation such as TUI
group which is given below along with the examples:
Horizontal integration: It is the procedure of integration among the two organisations in
order to develop a bigger organisation. After such integration, the products and services provided
by both firms becomes same for enhancing the customer base and profitability. For example:
TUI group has integrated with the first choice airways in order to offer high quality of travel

services to the customers so that they would not face any transportation issues (Boella and Goss-
Turner, 2013). Through this integration, the company can expand its operations for increasing
the revenue and profit. Also TUI can merge with other good hotels so that they can provide
proper and improved accommodation services to customers. This type of integration is useful for
the firms in improving their brand image. The effect of such integration is that the economies of
scale can be enhanced by providing same types of services in maximum quantity. The
international trading cost can be reduced by using this integration. But there are several negative
impacts also of this integration such as reduced productivity, lack of control, less authentication
for taking proper decision etc. (Brotherton, 2012).
Vertical integration: It is an effective method in which a firm purchases another firm
which exists in their distribution chain. This merger is usually beneficial in lowering the costs of
services for improving the profit. Firms can gain competitive advantage by using this type of
integration as the market share and the profit of the firm will improve due to providing unique
and distinguishable services from their competitors (Boniface, Cooper and Cooper, 2016). For
example: TUI has taken over the Magic life hotels for providing high quality based services to
the customers of this hotel for attracting more customers. It will Improve the customers base and
profit of the firm. This integration needs updated technology to be implemented into the supply
chain for getting the improvements. The effect of such type of integration is that the TUI can
control or end their supply chain for seizing the competitive advantages and to provide new and
effective services to customers for enhancing their satisfaction (Sigala, Christou and Gretzel,
2012).
BY using the integration, TUI group can provide their effective services to the customers
which will enhance the customer satisfaction and loyalty (Dei Mensah and Mensah, 2013). BY
providing the effective services, company can retain their customers for a long period of time in
order to sustain in the market. Also competitive advantage can be gained which will improve the
brand image of the firm. Whereas negative impact is that the employees needs to modify their
working style and needs to adopt the new culture which will create dissatisfaction among them.
2.2 Impacts of integration
Horizontal and vertical integration has both positively and negatively impacted the
business operations of TUI group. These impacts are discussed below:
Impact of horizontal integration

The impact of horizontal integration is that the working efficiency, meet economic of
scale and benefits of global trade has increased. For example: The merger of TUI and first choice
airways is beneficial for the TUI in providing the proper travelling services to their customers.
Due to this integration, the productivity and profitability of the firm is improving which is also
positively impacting the sales. This merger is also beneficial for TUI in expanding its operations
to the domain untouched markets in easy manner (Evans, Stonehouse and Campbell, 2012).
Sharing of optimum resources among the firms has leads to the reduced wastage of the resources.
Whereas negative impact is that the TUI needs to provide the profit share to the partner i.e. first
choice airways. Also the employees can feel dissatisfied due to working in a new working
culture which can also impact their performance and efficiency. TUI needs to motivate such
dissatisfied workers so that they can serve the customers in proper manner for ensuring their
satisfaction. However, this type of integration positively impact the business firms having little
negative impact. Through this integration, the company can improve its market share as well as
customer base by collaborating with other firms. The firm can face the challenge of investing
more funds in improving the services provided by the first choice airlines which is a drawback of
this integration (Smith and Puczkó, 2014).
Impact of vertical integration
The impact of this integration on TUI is that the business can provide better and new
services to the customers which is helpful in enhancing the market share and profitability ratio.
Also the quality of services provided by the other hotel can be enhanced due to the control of
TUI on their operations. The merger of TUI with the magic life is useful for firm in enhancing
their customer base and quality of services. Negative impact is that the capacity may not balance
which will create the dependency on the magic life in meeting their goals and objectives. The
flexibility can be reduced along with the effectiveness in the operations of TUI group. This type
of integration is useful for the firms in improving their supply chain of the services provided to
the customers. Apart from this, market share of the TUI group can improve by using this
integration as with the help from TUI group, magic life can effectively provides its services to
the customers under the brand name of TUI which will improve the brand image of hotel in the
mindset of customers. Also the management needs to hire new workers for providing the
services through Magic life which is costly for the company (Aynalem, Birhanu and Tesefay,
2016).

Action taken by TUI for eliminating the impact
TUI has taken several actions for eliminating the negative impact of integration on the
First is the standardization of entire facilities in the partner firm. Through this, TUI can handle
the issues of magic life and first choice airways for running the business smoothly (Guttentag,
2015). The company has also maintained capacities, flexibility and capabilities, opening of new
villas, club etc. These has reduced the dependency of TUI on other firms for attaining their
predetermined objectives. TUI has taken several other actions for strengthening the brand image
as discussed below:
Control and manipulation of market: Various tour operators such as Trail finder,
Thomas cook etc. do not try to purchase the other hotels in international market for maximising
their global presence. Due to this, TUI can provide their services and tour packages in more
economical and affordable prices for achieving an upper competitive advantage for competing
with the rivals in effective manner.
Branding: Through this tool, TUI can improve their brand image in the market which is
helpful in attracting a large number of customers and for gaining their trust and loyalty. Through
this, the hotel can respond towards the negative impact of integration so that the impact can be
eliminated or reduced on the business operations of firm (Dei Mensah and Mensah, 2013).
Market research: TUI is also conducting the market research so as to determine the
impact of integration on the business so that the strategies can be developed accordingly.
Through the market research, company is also determining the requirements of the customers so
that the brand image of the company can improve by providing them services accordingly.
TASK 3
3.1 Rationale for a new hospitality business/project
Hospitality industry is one of the fastest growing sector having a wide scope due to its
services. and has a wide scope. It is very beneficial for the entrepreneurs to start a business in
this sector as it is very profitable. Entrepreneur get the opportunities to explore various other
options for setting up their new ventures such as restaurant, pubs, hotels, clubs etc. when entered
in the hospitality sector (Jaafar and et. al., 2011). The rationale for the development of new
Royalistic hotel is discussed below:
Phase 1: Development

1. Concept
General Idea: The idea behind to starting this hotel is to establish a medium sized hotel
for providing the accommodation services to the customers or guests in an royal or heritage
manner. This idea was chosen due to the heavy demand of hospitality firms in the market as well
as customers or visitors of the other countries are having good paying capacity. This hotel can be
founded at any famous location in UK. This location must be famous among the people due to
rich culture, marvellous scenes, exotic locations etc. where a large number of people wants to
visit every year. This hotel is advantageous for the entrepreneur as the hospitality sector in UK
is growing at a fast speed (Morrison, 2013). This 3 star hotel will provide effective and best
quality services to the people for fulfilling their needs and demands so that their journey stays
pleasant and comfortable.
Objectives: The main objective of Royalistic hotel is to provide a good and unforgettable
experience to the people by serving them with the best class services.
Vision: “To become a well known hotel in the world by creating values for the
employees, owners and guests.”
2. Market Research
Importance: Market research is useful for the Royalistic hotel for determining the
ongoing trends in the market and customers so that the services can be provided accordingly.
Through this, the hotel can determines the needs, requirements, demands and taste of customers
for meeting these through their services (Rao, 2014). By providing the services according to the
needs and demands of the customers, the hotel can meet the expectations and satisfaction of the
customers which is beneficial for hotel in sustaining in the market for a long period of time.
Stages: Market research includes 5 continuous stages which are definition of the
problem, strategy development for resolving the issues, development of research design,
collection of the data and report presentation.
Area of research: The area of research is to determine the expectations of customers
from the services of hotel so that the hotel can develop their strategies and plans accordingly.
Research tools and methods: The data for the research will be gathered by using the
secondary data sources such as censuses, internet, media sources etc. because the hotel is new in
market.
3. Target Market

The target market of the Royalistic hotel is the middle and higher class people who visits
the UK frequently for their business or personal purposes. So the target customers of the hotel
are the people who wants to get affordable packages with high class facilities such as travellers,
college groups, newly wedded couples, firms for meetings and conferences.
3.2 Project proposal
Stage 1: Development
Location: The chosen location for this hotel is the central London near the London eye
which is visited by a large number of visitors. This place is chosen because it is easily accessible
by the visitors due to having central location (Teng, 2011).
Scale: This hotel is a medium sized hotel having 50 rooms. The rooms are air
conditioned with attached bath room. The hotel is providing several other facilities in the rooms
such as Wifi, LED TV, mini fridge, double bed etc. In some of the Balcony view is there in
which the London eye can be seen (Smith and Puczkó, 2014). The hotel is providing tourist
guide facilities, high quality food and conveyance to guests etc.
Funding: The Royalistic hotel is new in business due to which the funds are collected
through the external sources such as creditors, bank, Mortgage loans providers etc. Some of the
funds are gathered from the bank whereas remaining funds are provided by the entrepreneurs.
The ratio of the funds is 80:20 which means, 80% of money is collected from bank and 20% is
from the entrepreneur (Boniface, Cooper and Cooper, 2016).
Products and services: The hotel is providing mainly accommodation services and food
products to the customers. Other services includes, Wifi, LED TV's, laundry, spa, swimming
pool etc.
Stage 2: Design
Ambience: The hotel is decorated and the ambience is luxury so that the customesr get
automatically attracted towards the hotel. The hotel is equipped with colourful lights, soft music
is plyed in the premises along with the fragrant environment in the conference hall, reception and
dinning area (Nunkoo, Gursoy and Ramkissoon, 2013). The ambience is classic and simple for
providing a royal experience to customers.
Culture: The hotel needs to have a rich and healthy culture so that the customers gets a
good experience. Management needs to determine the culture of people who visit the hotel for
serving them better.

Brand: The Royalistic hotel will provide the high quality based services to the customers
so that the brand image of the hotel can improve among the customers.
Interior and exterior: The intrinsic and extrinsic design of hotel is essential thing which
is noticed by the people during their visit. The interior and exterior must be well furnished which
can provides a good and royal experience to the customers.
Sustainability: For sustaining long term position and reputation, hotel needs to provide
discounts and offers to the customers so that customers can save their money on next visit.
Stage 3: Operation
Staffing: It is the major function of managers of a firm in which they select the potential
and knowledgeable candidates according to the requirements of functions and organisation. It is
necessary for the Royalistic hotel in determining the suitable job profile of the suitable
candidates (Roberts, Hall and Morag, 2017). Further the hotel will provide the workshop and
suitable training program for improving the capabilities and skills of candidates. The staff will be
recruited based on their skills such as communication, problem solving, interpersonal skills etc.
Also the workers will be recruited for the position of chef, waiters, room service and manager.
Compliance with legislation: The hotel is following the laws and regulations
implemented by the government of United Kingdom so that any penalty or punishment can be
avoided in smoothly running of operations of hotel.
Promotional activities: The hotel is using various promotional methods such as social
networking sites, advertisement, print media etc. for attracting the customers. These methods are
selected because the customers can be easily attracted towards the products if attractive content
and images are used in promotions which is possible through these methods. The promotion is
necessary for raising the awareness regarding the hotel and the product and service provided in
the market and to the customers.
Pricing strategies: The hotel is using the economy and premium pricing strategy for
selling the best class services to the customers at affordable prices as the targetted customers are
middle class people.
CONCLUSION
It has been concluded from the above report that the hospitality and travel tourism sector
plays a major role in the development of the UK. These two sectors are interconnected and needs
to provide the services together for enhancing the satisfaction and trust of the customers.

Horizontal and vertical integration is necessary for firms in order to enhance the customer base
and profit. The negative impact of the integration must be reduced by the firms by taking proper
measures and actions. For development of new business, entrepreneur should develop a rationale
first so that the activities can go accordingly.

REFERENCES
Books and Journals
Abubakar, A. M. and Ilkan, M., 2016. Impact of online WOM on destination trust and intention
to travel: A medical tourism perspective. Journal of Destination Marketing &
Management. 5(3). pp.192-201.
Aynalem, S., Birhanu, K. and Tesefay, S., 2016. Employment opportunities and challenges in
tourism and hospitality sectors. Journal of Tourism & Hospitality. 5(6). pp.1-5.
Bharwani, S. and Butt, N., 2012. Challenges for the global hospitality industry: an HR
perspective. Worldwide Hospitality and Tourism Themes. 4(2). pp.150-162.
Boella, M. and Goss-Turner, S., 2013. Human resource management in the hospitality industry:
A guide to best practice. Routledge.
Boniface, B., Cooper, R. and Cooper, C., 2016. Worldwide destinations: The geography of travel
and tourism. Routledge.
Boniface, B., Cooper, R. and Cooper, C., 2016. Worldwide destinations: The geography of travel
and tourism. Routledge.
Brotherton, B. ed., 2012. International hospitality industry. Routledge.
Dei Mensah, R. and Mensah, I., 2013. Management of tourism and hospitality services. Xlibris
Corporation.
Dei Mensah, R. and Mensah, I., 2013. Management of tourism and hospitality services. Xlibris
Corporation.
Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and
tourism. Taylor & Francis.
Guttentag, D., 2015. Airbnb: disruptive innovation and the rise of an informal tourism
accommodation sector. Current issues in Tourism. 18(12). pp.1192-1217.
Jaafar, M., and et. al., 2011. Entrepreneurship in the tourism industry: Issues in developing
countries. International Journal of Hospitality Management. 30(4). pp.827-835.
Morrison, A.M., 2013. Marketing and managing tourism destinations. Routledge.
Nunkoo, R., Gursoy, D. and Ramkissoon, H., 2013. Developments in hospitality marketing and
management: Social network analysis and research themes. Journal of Hospitality
Marketing & Management. 22(3). pp.269-288.
Rao, R.S., 2014. Emerging trends in hospitality and tourism. International Journal of Research–
Granthaalayah. 1(1). pp.1-8.
Roberts, L., Hall, D. and Morag, M., 2017. New directions in rural tourism. Routledge.
Sigala, M., Christou, E. and Gretzel, U. eds., 2012. Social media in travel, tourism and
hospitality: Theory, practice and cases. Ashgate Publishing, Ltd.
Smith, M. and Puczkó, L., 2014. Health, tourism and hospitality: Spas, wellness and medical
travel. Routledge.
Smith, M. and Puczkó, L., 2014. Health, tourism and hospitality: Spas, wellness and medical
travel. Routledge.
Teng, C.C., 2011. Commercial hospitality in restaurants and tourist accommodation:
Perspectives from international consumer experience in Scotland. International Journal
of Hospitality Management. 30(4). pp.866-874.
Online

Hospitality Provisions. 2018. [Online]. Available Through: <http://www.nshm.com/career-in-
travel-tourism-management/>.
About TUI group. 2019. [Online]. Available Through: <https://www.tuigroup.com/en-en/about-
us/about-tui-group>.
Scope. 2019. [Online]. Available Through: <https://www.investopedia.com/terms/s/scope.asp>.