Tourism Industry Analysis and Trends

This assignment requires an in-depth analysis of the tourism industry, examining current trends, significant challenges, and emerging opportunities. Students must investigate the multifaceted nature of tourism, considering its economic, social, and environmental impacts. A crucial component is exploring the vital role of hospitality within the tourism sector, analyzing its contribution to the overall experience and its influence on industry success.

Hospitality Provision in the
Travel and Tourism Sector

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Inter-relationship between Hospitality and travel and tourism sector:.............................2
TASK 2............................................................................................................................................3
2.1 The implication of integration to the hospitality industry:...............................................3
2.2 Discuss how integration has affected a hospitality business...........................................5
TASK 3............................................................................................................................................7
3.1 Rational for a new hospitality business:...........................................................................7
3.2 Producing a project proposal as per the target market, location, operating model:.........8
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
TUI group is a multinational travel and tourism company which has its headquarters in
Hanover, Germany. It is the world biggest leisure, travel and tourism company. It have its own
travel and tourism agencies, hotels, airlines, cruise ships and retail stores. The company currently
owns six European airlines which is by far the largest holiday fleet in Europe. It also have nine
tour operators who are based in Europe. The TUI group(Toristik Union International) is also
listed on Frankfurt stock exchange and the London stock exchange as a constituent of FTSE 100
Index.
The group is serving in the hospitality and tourism sector. The company was founded in
1923 (94years old). It is a global company with operational capabilities in more than 100
countries. Currently it is employing more than 76000 employee's who are placed in 1800 travel
agencies around the globe. The company have stakes in various companies such as Thomas
cook and Thomson travel group (Barros, Butler, and Correia, 2010). The Thomson group is a
United Kingdom subsidiary of TUI group. It is headquartered in Luton England. But by 2018,
the company is planning to integrate all the subsidiaries and form a single entity. The Thomson
group was primarily a Canadian travel and tourism company which was later taken over by the
TUI group. Now it is serving as a subsidiary in the market and act as a travel agency.
The TUI group have different products such as charter and scheduled passenger airlines,
package holidays, cruise lines, hotels and resorts. It currently have revenue of €17,184.6 mullion
in 2016. the operating profit of the company is €618.3 million and gross profit is €1,037.4
million as last year. It is the biggest organisation in travel and tourism industry (Brotherton,
2012). The company is on track to integrate the functions and subsidiaries which are operating in
different countries. The company is engaged in sponsoring Bundesliga club Hannover96. The
organisation has divided its functions into different parts:
 Hotels and resorts
 Cruises
 Destination Services
 Tour Operators
 Airlines
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TASK 1
This task will describe about the scope and scale of hospitality industry within the travel and
tourism sector. Also the role of the industry will be analysed in the sector. TUI has been chosen
as a company of preference.
1.1 Inter-relationship between Hospitality and travel and tourism sector:
The hospitality industry is considered as a most important section of the whole tourism
sector. The companies serving in this industry are the one who provide qualitative service to the
travellers. There are many companies who are providing services in this field such as TUI group
which is the world largest travel and tourism company. The hospitality industry is a serving in
some broad categories within the service industry which includes lodging, transportation, event
planning, etc. It is a multibillion industry whose productivity depends on availability of leisure
time and disposable income (Chiappa, 2013). Hospitality industry and travel and tourism sector
are interdependent on each other.
The travel and tourism industry in United Kingdom is flourishing. The reason behind its
growth is simply the development of services in the hospitality and transportation industry. TUI
has focused and developed the facilities to provide better services to the traveller around world.
The hospitality industry act as a core element which is focused on providing qualitative services
and time to the traveller. The main focus of the company is to accommodate and ensure that the
people who are visiting the country are accommodated in a proper manner.
The hospitality industry maintained and developed by the the TUI group have spread its
operation around the world. It has offered its services in in catering, accommodation, cab facility,
guide, etc. The industry is the core source of increasing consumer satisfaction level with
services. The first priority before making a package in TUI is to ensure that the hotels are ready
to serve the consumers as per the requirements (Darcy, and Pegg, 2011. The company keeps on
analysing the occupancy rate as to ensure that with the floating of new packages it will be able to
fulfil the inflow of traveller in different places. This is one of the factors which states about the
scope of the industry in the tourism sector.
The Scope and Scale of hospitality industry in the tourism sector:
 Service provider: This is the prime role of the hotels. They provide services to the
travellers.
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 Customer satisfaction level : The quality of services enhance the customer satisfaction
level. TUI focuses on developing and maintaining the facilities as to ensure that they are
able to serve the customers with high quality.
 Catering the needs of travellers: The needs and wants of the travellers are catered by the
companies which are serving in the field of hospitality. The organisations and their staff
are concerned with fulfilling the requirements of the visitors on time with quality.
 Productivity enhancement: This is the core component which makes this industry so
important. It actually aids in enhancing the productivity level of TUI group. This is why
they focus on the hospitality industry.
Today the role of hospitality industry has grown to be a core element. Before world war
II it was only focused on selling beds to the people who wanted a place to stay. But today it has
changed completely, now they are focusing on providing qualitative services to the visitors who
stay in the hotel. They are not just focused on selling beds for night or day but they are
concentrating their efforts to enhance the quality of services and keep the occupancy rate high
(Darcy, and Pegg, 2011). The hotel industry is much more focused on how they can deliver the
customer as per their needs and wants and for that TUI prepares packages after analysing the
hotels capacity and market trends. The hospitality industry now plays a role where it has to
ensure that the travellers spend qualitative time during their stay with the hotel.
TUI knows the value and the role of hospitality industry that is why they always prepares
the tour packages as per the capacity of the hospitality. If they find that they cannot cater the
demands of the market then they contact new hospitality giants as to fulfil the requirements of
customers.
TASK 2
2.1 The implication of integration to the hospitality industry:
The integration of various service providers occurred after the world war II, when the
hospitality industry, transportation and operators came together and formed a separate sector
which was later known as travel and tourism (Dickinson, and Lumsdon, 2010). The integration
of different services impacted the whole scenario. Traveller were free now as they only had to
buy the packages and they dot had to do anything else. The companies such as TUI exploited the
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whole change in and gained the market share as well as boosted their profitability levels. The
company used all the methods to integrate different types of business as to enhance its serving
capability in the market. Today it have nine different tour operators/services in the different
countries and also it have its own hotels, motels and other accommodation related facilities. TUI
today owns the biggest fleet of air planes and cruise lines as to improve the transportation
services.
The basic aim behind integration was to reduce the outsourcing of operation as to reduce
the cost of activities. This enabled TUI to focus more on long term benefit. This al;so helps the
company in registering better and enhanced global presence while the market share is also on
rise. The hospitality industry and tourism sector are interdependent on each other which and their
functioning can not be separated. Today TUI group has acquired and integrated various small
and medium enterprises as to enhance its in house operational capabilities. Also the organisation
has made various contracts with different hotels around the world as to enhance its ability to
serve the travellers.
The main implication of integration is that the capabilities of companies such as TUI
grew by many folds within a specified period of time (Heung, Kucukusta, and Song, 2010).
They were able to build their own facilities and acquire new entities as to enhance their range of
efficiency and effectiveness. But there are some issues which are faced by the small and medium
companies, suffering due to the increased competition level in the market. There are two of
integration which are used by TUI as to further develop its own business, Vertical and horizontal
integration. These are methods which help the company in growing its size and capabilities.
The vertical integration method is where the organisation may form contracts or acquire
the business which supplements its in house capabilities. This is a technique which help them in
strengthening their supply chain and other sections which supplements its overall productivity.
The basic motive behind this move is to increase profitability and decrease operating cost of the
organisation. This type of integration can be in form of forward, lateral and backwards. TUI has
adopted backward integration as a method and the outcome of this move is that the company has
nine type of tour agencies and various type of transportation as well as hospitality organisations
under one umbrella (Hjalager, 2010). On the other hand, the company has adopted forward
integration in which it is merging its own business which is currently scattered in the form of
different agencies and airlines.
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This move has impacted the activities of hospitality industry which now has to focus
more and put control over the value chain of the organisation. The distribution of services also
became much easier for the organisation. The overall cost of producing services to the customers
has become much more efficient and the range of effectiveness has improved. With the help of
vertical integration the organisation has been able to gain competitive advantage over its
competitors and use the available opportunity to deliver unique services to the customers. On the
other side the horizontal integration is very vital for the TUI as to enhance and maximise the
profitability by increasing market share of the company (Hudson, and Thal, 2013). There are
some negative implications of horizontal integration over the hospitality sector:
 Lack of control
 Decreased productivity
 Less authentication
 Slow decision making
Hence, it is understood that the company have been impacted by both positive and
negative side of integration and the hospitality industry has grown while learning about the
issues which can hamper its services.
2.2 Discuss how integration has affected a hospitality business
Vertical and horizontal integration impact on organisational strategy and polices. On
TOI, horizontal integration helps in to increases its efficiency towards performance . The
integration also consists to take benefits of international trade and meet economic of scale: or
scope of the company. Along with this, TUI is the largest travel and tourism sector. Before the
industrial revolution managers prefer to use to vertical integration. It has various level of
management with a long change a command that helps in to running form the top of the
company. If business organisation is prefer to choose horizontal integration so as it can connect
with each department and there managers (Law, and Buhalis, 2010). With that, managers are
able to communicate with each other by which they can take better decisions. Horizontal
integration also helps in to what are the strength and weakness of other departments so another
employers can develop their strategics accordingly. For example- in TUI all departments are
linked with each other. If the manager of production department put high prices of their products
and services so as it is beneficial for finance department in order to increases their capital. On the
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other hand, if HR manager choose talented or experienced peoples so as they can maximise the
productivity of the company with that, managers can easily achieve their goals and objectives.
Whereas vertical integration is a clear management structure. In that, managers and
employees are connected with each other from top to bottom department. In that, the lines of
authorities and the function of each layer will be clear and most distinct. In vertical integration,
each manager has a smaller number of subordinates, on them the person put on control over
them. The main benefit of is it that the flow of information can be easily spread among managers
to employees but it a time consuming technique (McIntosh, Lynch, and Sweeney, 2011). There
are mention below the factors that impact on both integrations within business organisation, that
are as follow:-
Improves Employee relations: - In TUI if managers prefer to follow horizontal integration
approaches of management so as it helps in to develop employee relations. Along with this, it
also involves the communication between department to department. So as their manager can
easily interact with each other. This will helps in to provide managers of TUI a healthy and
friendly working environment by which they can decision for forthcoming period. Effective
decisions also aids in to achieve organisational goals and objectives from target market.
Increases productivity: - if all departments are connected with each other so as they can improves
their level of performance. In TUI, interaction helps in to improve the production level and
execution of employees because all employers are linked with each other so as they can easily
analyse which kind of products and services will be produce by the company (Medlik, 2012).
Along with this, the research department of the firm easily analyse what there customers are
expecting form them so is is very easier to produce quality products and fulfilling buyers needs
or desires.
Raises funds- If customers quality products and services so that they are willing to purchase it.
On the other hand, in vertical integration flow of information is top to bottom. It is duty of lower
level employee that follow instructions of their managers. It aids organisation to compete with
external forces and new entrants. This will increases the funds of company and develop
organisational growth in capital market. Both vertical and horizontal integration among all
departments helps in to maximise worker efficiency and their productiveness. So as TUI can
gain competitive advantages from target market.
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The company has taken impact on the branding. With horizontal and vertical integration
it has become very difficult for the organisation to market their services in the market. There are
many sub agencies operating under the TUI brand name. This is the reason because of which the
company is facing trouble in advertising for its services.
TASK 3
3.1 Rational for a new hospitality business:
There is a new organisation XYZ Ltd which is offering its services in the field of
hospitality. The company is primarily offering services in the United Kingdom market. The
research conducted by company has analysed the market potential which states that there is rise
in the number of people who are visiting UK and they are not just international travellers, the
number of people from country itself are visiting various sites on regular basis. The company has
identified it various factors and the Gap's which exist in the market (Mok, Sparks, and
Kadampully, 2013). The main aim of the organisation is to exploit the gap which exist in the
market and earn good amount of profit which do not need high level of investment.
The company has to develop the facilities and establish a framework for itself so that it is
able to deliver qualitative services to the customers. The motive behind the whole concept of
product and service is to exploit the opportunity and earn financial gains. The company has to
understand market and difference between product and services. As this will enable them in
developing a better plan for the organisation and establish a framework which will help the
management and employees in achieving the set targets and goals.
Product service concept: The XYZ hospitality plc will prepare for the summer package after
analysing the needs of the consumers. The hotels have to be prepared as per the needs of the
package and customer. The catering department has to ensure about the food quality and
varieties as to satisfy the customers to their fullest. Other additional facilities such as pool, gym
entertainment park has to be developed. This will help the organisation in sorting out the people
needs.
The concept understanding is necessary for the organisation as this will help them in
developing right products and supplementing services. This is help them in fulfilling the
customer satisfaction.
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3.2 Producing a project proposal as per the target market, location, operating model:
There is a new project for the new company XYZ limited which is working in the
hospitality organisation. The organisation is preparing for floating a summer surprise package for
the public. It has conducted a potential analysis which will provide the company ability to initiate
the planning process. The research has identified that there are various organisations which are
offering same services to the consumers in the market. The market share of those organisation is
very high and they are able to satisfy the needs and wants of the consumers leaving very little
room to serve in market (Murphy, 2013). Even though currently consumers wants a change and
they are trying get something even better. The profit margins for these companies has increased
at a tremendous rate. Also the research described about the places which attracts the travellers to
the United Kingdom. As per the potential analysis the new summer package will be developed
for the consumers and the organisation.
Target Market: The target market of XYZ hospitality Ltd will be medium and high income
group people. The segmentation will help the organisation in reaching the large market area
within less time. The segmentation will enable the organisation in understanding the individual
needs and ensure that the arrangements are made as per the needs. The target market has to be
specified as to ensure that all the resources are invested in a proper manner.
Location: The selected location for the package will be Britain itself. On the basis of research,
there are many places which are there to visit in UK. The travellers also prefer visiting these
places as they have historical values attached with them. Also it is safe for a new company to
initially offer services in the UK only. The resorts and hotels are also offering better services
here than any other place. So the best place for the company package will be UK itself.
Operating Model: The company needs a proper structure as to keep on running the functions.
The model will enable the company in defining the framework according to which the employee
and management relationship will be built. Various processes will be defined by the framework
such as recruitment and selection of employee's and the promotion strategies will be based on the
same framework (Pulina, Detotto, and Paba, 2010). The pricing strategy is required to be
developed as to standardise the cost of every activity and help the management in measuring the
performance afterwards.
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Designing: This activity will ensure that the facilities are designed as to cater to the needs and
wants of the people. It has to be attractive and hygienic so that travellers do not get any issues.
The facilities have to be attractive as to attract the travellers.
Financial plan: The company needs proper monetary plans. These plans are required as to fix
the cost for every activity which takes place in the organisation. The financial plans consist of
different monetary analysis (Sigala, Christou, and Gretzel, 2012). These analysis help the
company in defining the expenditure. It is very important for the company as to ensure that there
is stability in the organisation and the future goals are achieved on time.
Conclusion
There is huge scope in the travel and tourism market and the hospitality can improve their
position in the industry. Today the hotels and their supplementary subsidiaries have a big chance
to enhance the market share. There are many ways by which the company can use various ways
of integration. These methods helps the organisation in enhancing its capabilities and
productivity. The market have many opportunities which can only be exploited with the help of
good planning.
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REFERENCES
Book and Journals
Barros, C.P., Butler, R. and Correia, A., 2010. The length of stay of golf tourism: A survival
analysis. Tourism Management. 31(1). pp.13-21.
Brotherton, B. ed., 2012. International Hospitality Industry. Routledge.
Chiappa, G.D., 2013. Internet versus travel agencies: The perception of different groups of
Italian online buyers. Journal of Vacation Marketing, 19(1), pp.55-66.
Darcy, S. and Pegg, S., 2011. Towards strategic intent: Perceptions of disability service
provision amongst hotel accommodation managers. International Journal of Hospitality
Management. 30(2). pp.468-476.
Dickinson, J.E. and Lumsdon, L., 2010. Slow travel and tourism. Earthscan.
Heung, V.C., Kucukusta, D. and Song, H., 2010. A conceptual model of medical tourism:
Implications for future research. Journal of Travel & Tourism Marketing. 27(3). pp.236-
251.
Hjalager, A.M., 2010. A review of innovation research in tourism. Tourism management. 31(1).
pp.1-12.
Hudson, S. and Thal, K., 2013. The impact of social media on the consumer decision process:
Implications for tourism marketing. Journal of Travel & Tourism Marketing. 30(1-2).
pp.156-160.
Law, R., Qi, S. and Buhalis, D., 2010. Progress in tourism management: A review of website
evaluation in tourism research. Tourism management. 31(3). pp.297-313.
McIntosh, A.J., Lynch, P. and Sweeney, M., 2011. “My Home Is My Castle” Defiance of the
Commercial Homestay Host in Tourism. Journal of Travel Research. 50(5). pp.509-519.
Medlik, S., 2012. Dictionary of travel, tourism and hospitality. Routledge.
Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality,
tourism, and leisure. Routledge.
Murphy, P.E., 2013. Tourism: A community approach (RLE Tourism). Routledge.
Pulina, M., Detotto, C. and Paba, A., 2010. An investigation into the relationship between size
and efficiency of the Italian hospitality sector: A window DEA approach. European
Journal of Operational Research. 204(3). pp.613-620.
Scott, D., Peeters, P. and Gössling, S., 2010. Can tourism deliver its “aspirational” greenhouse
gas emission reduction targets?. Journal of Sustainable Tourism. 18(3). pp.393-408.
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.
Stephenson, M.L., 2014. Deciphering ‘Islamic hospitality’: Developments, challenges and
opportunities. Tourism Management. 40. pp.155-164.
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.
Vanhove, N., 2011. The economics of tourism destinations. Routledge.
Xu, J.B., 2010. Perceptions of tourism products. Tourism Management. 31(5). pp.607-610.
Zeng, B. and Gerritsen, R., 2014. What do we know about social media in tourism? A review.
Tourism Management Perspectives. 10. pp.27-36.
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Online
Travel and Tourism Management. 2017. [Online]. Available Through:
<http://www.ukcbc.ac.uk/hnd/travel-and-tourism/hnd-in-travel-and-tourism/> .
[Accesses On 10 June 2017].
Travel And Tourism. 2015. [Online]. Available Through: <https://www.prospects.ac.uk/careers-
advice/what-can-i-do-with-my-degree/travel-and-tourism> . [Accesses On 10 June
2017].
Hospitality Provision In The Travel and Tourism Sector. 2017. [Online]. Available Through:
<https://www.prospects.ac.uk/careers-advice/what-can-i-do-with-my-degree/travel-and-
tourism> . [Accesses On 10 June 2017].
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