Hospitality Industry Analysis

This assignment delves into the multifaceted realm of the hospitality industry. It analyzes various aspects, including employee conflict resolution, university-industry collaboration, theoretical frameworks of hospitality, its role in cultural and political contexts, and the influence of new-age trends. The analysis draws upon a range of scholarly articles covering diverse subfields within hospitality, from service cost management to tourism development.

Hospitality Provision

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................4
A. Scope and scale of the hospitality industry within travel and tourism sector........................4
TASK 2............................................................................................................................................6
A. Integration in hospitality and travel and tourism businesses..................................................6
B. The impacts of integration......................................................................................................7
TASK 3............................................................................................................................................8
A. Rational for a new hospitality business outlining product-service concept...........................8
B. Produce a project proposal including target market, location, operating model and design
based on a thorough market potential analysis...........................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Hospitality service can be stated as the crucial concept in travel and tourism business as it helps
in delivering best services to people and assists them to gain best travel experience. However, such
services usually connect users through internet. In addition to this, there are varied hospitality services
that are delivered by any service provider i.e. accommodation, food, laundry services, entertainment and
so on (Poulston and Pernecky, 2014). Thus, it can be stated that it is essential for travel and tourism
business to provide the best customer experience which helps in expanding the scope and scale of
hospitality industry. In general, hospitality organization interconnects its functions with travel and
tourism business so that they can work together and attain customer satisfaction. However, travelers are
spending their vacations through visiting different destinations that requires the best knowledge.
Therefore travel and tourism business is required to provide them high advantage by rendering peoper
knowledge and information.
In the present study, Thomas Cook Plc has been undertaken which is a British multinational
travel and tourism organization. It is also listed in London Stock Exchange. It contains varied hospitality
operations that help in attracting tourists and satisfying their needs. For instance, it involves varied
holiday packages, cruise and bookings for hotels and resorts as per the clients' requirement so that they
can attain maximum satisfaction. Company also owns the scheduled airline Condor and booking website
such as Hotels4u. Hence, it helps in delivering a vast range of products and services to the clients so that
they can attain quality travel package (Katz and LaVan, 2012).
Moreover, it is essential for organization to possess different products and services related to
travel and tourism business so that tourists select the same company whenever they travel. In 2007,
Thomas Cook was merged with My Travel Group Plc and expected to make savings of around 75 million
Pound a year. However, such integration helped Thomas Cook to gain relatively high percentage of
clients using travel and tourism services. Further, the study undertakes varied tasks such as scope and
scale of hospitality services within travel and tourism sector and also examines the role of hospitality
function within Thomas Cook (Cummings, Kwansa and Sussman, 2013). Other than this, this report
evaluates different horizontal and vertical integration within hospitality business. At the end, a rational
has been developed for a new hospitality business that outlines the product and service concept.
TASK 1
A. Scope and scale of the hospitality industry within travel and tourism sector
It can be stated that hospitality industry possess wide scope and scale within travel and tourism
sector which involves services related to accommodation, food, laundry, entertainment etc. However, all

these products and services are important within hospitality business as it help in gaining customer
satisfaction. Hospitality sector as well as travel and tourism business is interconnected with each other so
that required products and services can be delivered to clients as per their needs. As per the global
perspective, both these functions interconnect with each other and provides different services to clients so
that they can gain comparative advantage. Hence, in regard to this, Thomas Cook is providing the best
travel experience and accommodation services so that guests can feel satisfied (Gilmour, 2013).
Moreover, it assists travelers to choose similar organization as a tour operator whenever they plan for
spending their vacations. Thus, it creates a positive brand image of firm in the market and helps in
increasing profit percentage.
Furthermore, it can be stated that both hospitality business as well as travel and tourism sector
interconnect with each other and involve varied facilities such as transportation, cruise, food and
beverages, entertainment etc. in order to attain customer satisfaction. However, through such type of
activities, scope and scale of hospitality business are increased within travel and tourism sector. Thomas
Cook being a tour operator is required to make good connection with varied hotels so that they can
suggest and provide best deals to travelers. Further, scope and scale of hospitality services are wider and
thus it helps in delivering best services to clients and attain satisfaction. The role of hospitality in Thomas
Cook is very extensive as it helps in providing wide range of products and services in order to fulfill the
needs of guests (Bray and Macneil, 2012).
Further, there are varied key roles and operations within hospitality business which help in
providing the best services and products to clients in order to attain satisfaction. Following are the two
different departments within hospitality businesses such as front house and back house. In the front
department, it involves reception counter which is directly connected with travelers and focused on
gaining their views and opinions in regard to make suitable changes to attain results. While, back house
department involves people who work behind the scenes in order to provide the best quality services to
guests (Norton, 2015).
M1
It can be stated that role of hospitality provisions plays a critical role within travel and tourism
business. However, hospitality business has become increasingly popular as it interprets varied functions
within travel and tourism sector. Hospitality provisions as well as travel and tourism business are
interconnected within each other so that best products and services can be delivered to guests. For
instance, hospitality provision involves varied components such as food and beverages, accommodation,
laundry services, transportation and entertainment etc. However, all these components of hospitality
industry are effective and thus, Thomas Cook is required to involve them in order to plan an effective

travel package for its clients. However, all these functions help business to ensure that consumer should
feel satisfied and thus hotel can gain repeat purchases (Buettner‐Schmidt and et. al., 2015).
Furthermore, role of hospitality provisions is effective as it assists in providing the best quality
products and services so that needs of clients can be fulfilled. However, Thomas Cook is required to plan
the best travel package for its clients as per their requirements so that satisfaction can be attained. For
instance, it is essential for tour operator to plan the best package for its clients so that better hospitality
services can be rendered with the aim to make clients comfortable (Zeng, 2015). Furthermore, it can be
stated that both hospitality provisions as well as travel and tourism business are interconnected with each
other. For instance, hospitality business is required to deliver the best quality products and services to
travel and tourism industry. However, through adopting different methods, role of hospitality industry
within travel and tourism sector can be stated as follows-
 Holiday packages- Hospitality business plays a main role within the planning of holiday
packages. However, Thomas Cook being a premium tour operator involves luxurious hotels
within its lists and thus clients need to choose as per their preferences. However, if any traveler
prefers to choose budgeted hotels then they need to select similar travel package (Barrows,
Powers and Reynolds, 2012). Thus, it is essential for Thomas Cook to plan each and every type
of holiday package so that clients can gain satisfaction.
 Conferences and exhibitions- Further, at the time of organizing international meeting and
conferences, tour operator such as Thomas Cook is required to arrange the best luxury hotels
with all the facilities of conference room, banquet hall etc. However, arrangements done by hotel
should be best because international visitors will also be come to attend meeting or conference
and thus, they should feel satisfied with the services of hotel so that they can contact the
management of hotel for their future staying with family or friends (Bharwani and Mathews,
2012).
TASK 2
A. Integration in hospitality and travel and tourism businesses
As per early 1900's, integration can be stated that businesses were focused on reaching economies
of scale through which they were able to benefit themselves in regard to gain lower operations costs.
However, hospitality businesses focused on providing their own products and services through in-house
efforts and thus save lot of money which can be utilized elsewhere for attaining long run profit. Thus,
such type of efforts by hospitality business helps in reducing outsourcing habit of hospitality firms.
Hence, such type of integration helps hospitality firms to improve its global presence and achieve high
market share (Bowie and Buttle, 2007). Through integrating businesses, hospitality firms can attain

results with the aim to save cost and minimize expenses. Thomas Cook undertakes integration method
that helps in improving its target market.
Integration among hospitality business and travel and tourism sector assists firm to interconnect
different services and products so that they can produce required products and services and do not need to
outsource it. However, both hospitality as well as travel and tourism businesses are integrated with each
other so that different operations can be combined and executed together. Further, there are two types of
integration i.e. horizontal and vertical that affect the hospitality business. Vertical integration can be
defined as a process of merger through which firm purchases another company which delivers similar
products and services. However, such factor is carried out by firm with the aim to maximize profitability
and also benefits in terms of lower operating costs (Brotherton, 2013). For example, any premium tour
operator who provides tour and travel services may buy airlinecompany or a hotel as it can supply both
types of services which are crucial for holiday package industry. However, Thomas Cook being a
premium tour operator has started or merged with different hospitality businesses in order to provide a
wide range of packages to clients.
While, on the other hand, horizontal integration is important for firm that wants to acquire
another businesses in order to expand their functions in different market and improve market share.
However, it benefits firm to enhance the economies of scale and also maximize profitability. For instance,
such situation happens with Thomas Cook at the time when they merge with another service provider
such as passenger airline, cruise line etc. However, Thomas Cook also purchased an Airbus A321 in 2014
in order to attract potential consumers and enhance market share (Dale, 2005). Further, Thomas Cook
also provides varied distinct travel services such as flight tickets, hotel reservation and cruise facilities.
However, such type of integration affects the hospitality businesses positively in regard to enhance
market share and attain desired results in terms of maximizing cost and enhancing profitability.
B. The impacts of integration
It can be evaluated that integration impacts businesses in different forms and thus, it is crucial for
business to respond effectively to such integration. It is as follows-
 Standardization- It can be stated as a complex and time consuming process in an industry which
has varied variables. Further, there are certain processes that are automated and can certainly be
standardized while human resource element with the business is a lot more difficult to
standardize. However, people want that each and every branch of Thomas Cook worldwide
should be same and thus provide similar services to clients with the aim to satisfy their needs
(Shields, 2015). It also helps in improving the brand image of firm in the market. For instance,
there are several components within hotel services that are required to be made standardized so
that person traveling to such places receives similar quality services and attains satisfaction.

 Economies of scale and high market share- It can be stated that business reduces its operating
cost effectively at the time of integration. For example, Thomas Cook being travel agency merges
with varied hotels in order to improve the cost of investment linked with it. Thus, it helps in
gathering benefits by providing a wide range of products and services along with satisfying the
needs of consumers. Further, it is essential for business to properly plan the integration and also
carefully carry out the investment activities with the reputed hotels and resorts so that it benefits
business in the form of low operating costs (Unegbu and Audu, 2015). Also, with the help of
integration, travel operators can lower its costs of packages and thus pass benefits to the clients.
Thus, adopting such tactics helps firm to improve the level of market share and profitability.
Moreover, travel businesses undertake horizontal integration in order to expand its market base
while adopting vertical integration businesses can enter into new diversified market and thus
attract an entirely distinct consumer base.
 Quality- Further, it impacts integration because it cannot be guaranteed that quality will enhance
through carrying out integration process. For example, if any hotel is acquired by another
business it cannot be determined that they possess a better service approach as compared to other.
Also, workers of hotel are required to perform their functions effectively through minimizing
error and delivering quality services to the guests (Picard and Moreira, 2015). Thus, Thomas
Cook should maintain quality within firm at the time of acquiring other businesses or starting new
diversified business in the market.
D1
Furthermore, it can be conferred that both the integration methods i.e. horizontal and vertical are
positively responded to undertake effectual decision making within business. Further, it also helps
business to overcome all the results and thus attain proper outcomes in business at the time of practicing
horizontal and vertical integration (Lashley, 2011).
TASK 3
A. Rational for a new hospitality business outlining product-service concept
An outline or design of product-service concept is developed which is as follows-
 Food and beverages- It is also considered as a prime factor which needs to be planned and
designed effectively within hotel. However, it is essential for hospitality firm to maintain their
menu list and provide a wide range of food and beverages to its client in order to fulfill their
demand (Lashley, 2013). Moreover, business should also arrange additional services for
customers on different occasions such as birthday celebrations, marriage parties etc.

 Luxury rooms- It is essential for hospitality firm to develop luxury suites with well-furnished
facilities that attract guests. However, accommodation is the main element of any hotel and thus it
is essential to be well maintained and decorated so that it provides unique culture and ambiance
to the clients in order to give the best value in return (Lynch and et. al., 2011).
 Wi-fi- Further, it is a basic necessity so that it is essential for a hotel to provide Wi-Fi to its
guests. There must have 24 hour internet connection within every room so that client can access
internet at anytime and anywhere within hotel campus (Law, 2010). For instance: providing such
type of services maintains the image of hotel and grabs potential consumers for the long run
(Mahony, 2007).
 Entertainment facilities- Hotel is required to focus on the entertainment part for clients.
However, it is essential for business to provide varied recreational services such as indoor and
outdoor gaming zone so that customers can relax. Thus, it impacts clients and attracts people to
use the services of hotel constantly (McDonald and Hopkin, 2002). For instance: different
facilities that can be provided by hotel such as swimming pool, badminton and squash court,
indoor space for kids playground or mini club area etc.
 Payment options- It is crucial for business to be flexible while collecting payments from the
clients. It means that hotel should provide varied options to guests to pay their bills using
American Express, Master card, Visa or Debit card etc. Thus, providing varied type of payment
mode helps in conveyancing clients and satisfying their needs (Edgell, 2002).
B. Produce a project proposal including target market, location, operating model and design
based on a thorough market potential analysis
Furthermore, a project proposal needs to be developed that involves varied components which are
essential in order to start a new hospitality business. It is as follows-
 Target market- Target market for 5 star hotels is upper middle class people or business
professionals. Thus, it is essential for business to market its products and services through social
media, mobile marketing, e-mail etc. Also, firm should provide the best quality services to
consumers in order to retain them for the long run (Tapking and Yang, 2004).
 Location- However, luxurious hotel should be situated in Manchester that is developed city in the
North West of England and it is a preferable location by clients to visit the place. Thus, it helps in
attracting consumers and enhancing the sales and profitability.
 Operating model- It involves numerous departments within hotel and also includes staff that is
required to maintain consistency within firm. However, layout of the hotel should be such as that
there should be front desk within the lobby of hotel and from here, guests should be welcomed by
the hotel staff. After that, the bell boy will take the luggage to the respective room (Poulston and

Pernecky, 2014). There is another crucial department which is food and beverage department and
it is their duty to provide quality food to guests. Further, housekeeping department is required to
maintain proper cleanliness and provide hygiene facilities so that customer satisfaction can be
attained.
 Market potential- It can be stated that there is high market potential within hospitality industry
because consumer frequently demands for unique products and services. Also, business should
develop varied recreational facilities as per the consumer preferences so that they can give tough
competition to rivals (Norton, 2015).
D3
NPV evaluation-
Rational Project
Year 2015 2016 2017 2018 2019
Cash flows 4000
0
66000 70000 52000 50000
Discounted rate (Cost of Capital) 10.00
%
10.00
%
10.00
%
10.00% 10.00%
P.V factor 0.909 0.826 0.751 0.683 0.621
Present Value Of cash flows 3636
0
54516 52570 35516 31050 210012
Initial Investment = 200000
NPV = Present Value of cash Inflows- P.V.
of outflows
10012
It can be evaluated that as per the Net Present Value business possess greater cash inflows as
compared to outflows. However, it assists business to gain profitable amount of 10012 pounds. Hence, it
is recommended to hospitality business to carry out its business as it is feasible and profitable in near
future (Zeng, 2015).
Internal rate of
Return
-200000 Initial Investment
40000 Year 1 cash Inflow
66000 Year 2 cash Inflow
70000 Year 3 cash Inflow
52000 Year 4 cash Inflow
50000 Year 5 cash Inflow
12% Internal Rate of Return
Moreover, through evaluating IRR it can be stated that there is an 12% rate of internal rate of
return and thus it is profitable because the cost of capital invested within firm is 10%. Hence, it can be
assessed that business can attain profits for the next five years and attain high return on investment
(Brotherton, 2013).

CONCLUSION
It can be articulated from the above study that hospitality provisions as well as travel and tourism
businesses are interconnected with each other. However, it helps firm to improve its scope and scale
along with satisfying the requirements of clients. Further, businesses such as Thomas Cook is required to
undertake horizontal integration so that they can provide varied products and services to the consumers
and expand the market share. Moreover, a rational proposal has been developed for a new hospitality
business and its potential market analysis has been done so that market share can be enhanced.

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