Holiday Inn: Assessing Inflation Impact & Management Strategy Use

This report provides an overview of Holiday Inn, an international hotel chain, and examines the impact of inflation on its operations and performance. It identifies the causes of inflation, such as demand-pull, cost-push, and built-in inflation, and discusses their effects on the tourism and hospitality industry. The report also explores various inflation management theories and models, including market power inflation theory, conventional demand-pull theory, and structural theories of inflation, and how Holiday Inn utilizes these to mitigate negative impacts and leverage positive outcomes. The analysis covers key operations, target markets, and the company's commitment to serving travelers with amenities and services, concluding that understanding and managing inflation is crucial for the company's success in the tourism industry. Desklib provides past papers and solved assignments for students.

Project title
Student name
Student ID
Module name
Tutor name
Academic year/ Group

Introduction (include a purpose of poster)
Tourism industry is one of the industries which consist different
business which offer goods and services in order to offer facilities
like leisure, business and pleasure activities from the home
environment. It is one of the important industries which offers
different factors like refreshment of mind and body for purpose of
pursuit entertainment, pleasure, and excitement (Dimopoulos,
Queiros and Van Zyl, 2019). This poster includes the overview of
the company as well as their offering in the marketplace. It also
identifies the period and also causes of inflation experienced by the
company in the past years. Moreover, it includes the research from
the reliable source which identify the theories and models used for
purpose of reducing the negative impact over the inflation and also
increase the positive impact.
Key operations and markets
It is an organization that is operating in the international market
and also provides different types of hospitality services to its
customers. It is segmenting the customers on basis of their
interests as people who want to get away from their stressful
lives. It is targeting the market on basis of the families and
corporates. It is an organization which is focusing on creating a
place where the customers can relax and also be themselves. It is
one of the most recognized brands in all over the world. It is
providing different types of services which is required by
business travellers. It provides the comfortable atmosphere for all
the people who can enjoy the amenities and relax like room
service, fitness centres, comfortable lounges, swimming pools
and others. Amenities and casual atmosphere like kids eat, stay
free programs, kid suite, business facilities and other different
reflect the long-standing commitment of the company to serving
the travellers and also it provides assistance to the brand.
Conclusion
From above mentioned poster, it can be concluded that
inflation is one of the important components in the tour
and tourism industry. It is creating an impact on the
economy of the country due to which prices of the
different offering in the economy increase over a specific
period the time. It is creating both the positive and
negative impact over the economy. There are different
reason why inflation occurs in the industry and in order to
overcome it, business adopts different types of theories
and models. It is important in order to balance the
different component in the industry.
Inflation management strategies deployed (Link this to relevant
models and theories)
•There are different types of theories are there for purpose of inflation which
are used for purpose of overcoming of the negative impact of inflation on the
operation and performance of the company. These theories allow businesses
to adopt different types of strategies in the business. Explanations of some of
these theories and strategies adopted by the Holiday Inn company are
mentioned below:
Market power inflation theory: It is one in which oligopolists can increase
the prices of the products by increasing the wages in the industry. It is one of
the industries which increase the price level without raising the demand for
the product. This price rise is the result of the increased wages in the industry
(Su, 2020). Increasing wages is important for purpose of compensating for
the hike in the prices and this increased income of people also creates a
positive impact on the purchasing power which results in inflation.
Conventional demand-pull theory: According to the theory of conventional
demand-pull, it is believed that inflation is the result of excess demand over
the supply. In the condition where there is full employee equilibrium, with the
increase in demand, inflation becomes unavoidable. In the situation of full
employment conditions, the economy of the country reaches the maximum
level of productivity. In such a situation, it is not possible to increase in the
supply of goods and services but at the same time, the demand for the
products and services is increasing rapidly. It results in inflation in the
economy.
Structural theories of inflation: It is a theory of inflation in which market
power is considered as one of the important factors which are the results of
inflation but it along is not possible to results of inflation instead there are
different structural maladjustment in the country or the institution which is
the results of the business environment (Wang and Zhang, 2019).
Company background and overview
Holiday Inn is one of the American companies which is operating
at the international level. It is one of the organisations which is
based on the Atlanta and also it is a part of the IHG resorts and
hotels. It is one of the largest hotel chains in all over the world
which has around 1173 hotels and also has around 214000
rentable rooms. It is a subsidiary company of IHG and was
founded in the year 1952 by Kemmons Wilson in the US. It has
high visibility in minds of its target market as it is emphasizing on
the advertisement (Evdokimova, Zhirnov and Klaver, 2019). It
also has a great reach to the international market as there are
around 1200 hotels in all over the world. It is also planning to
entering into new markets across different continents which allow
them to increase the reach of the company.
References
• Dimopoulos, D., Queiros, D. and Van Zyl, C., 2019. Sinking deeper: The most significant risks impacting the dive tourism industry in the East African Marine Ecoregion. Ocean & Coastal
Management, 181, p.104897.
• Evdokimova, T., Zhirnov, G. and Klaver, I., 2019. The Impact of Inflation Anchor Strengthand Monetary Policy Transparency on Inflation During the Period of Emerging Market Volatility in
Summer 2018. Russian Journal of Money and Finance, 78(3), pp.71-88.
• Khan, I., and et. al., 2022. Alternate energy sources and environmental quality: The impact of inflation dynamics. Gondwana Research, 106, pp.51-63.
• Koester, G. and Grapow, H., 2021. The prevalence of private sector wage indexation in the euro area and its potential role for the impact of inflation on wages. Economic Bulletin Boxes, 7.
• Osinubi, T.T., and et. al., 2021. The impact of corruption on tourism sector in Nigeria: Empirical insights by using an autoregressive distributed lag bounds (ARDL) testing
approach. International Journal of Hospitality & Tourism Administration, pp.1-20.
• Su, X., 2020. Simulation of economic development of tourism industry based on FPGA and machine learning. Microprocessors and Microsystems, p.103523.
• Wang, L. and Zhang, H., 2019. The impact of marine tourism resources development on sustainable development of marine economy. Journal of Coastal Research, 94(SI), pp.589-592.
There are different reasons for purpose of inflation including
demand-pull inflation, built-in inflation and also cost-push
inflation. Explanation of some of these causes of inflation
are mentioned below:
 Demand pull inflation is one of the situations, where there
are the production of goods and service, are not enough in
order to keep the demand high and it results in rising in
the prices (Khan and et. al., 2022)
 Cost push inflation is another inflation that occurs due to
the rise of the cost of the products and service which
create force over the business and also increase the prices.
 Built in inflation is also a strategy which is taking place
when the workers of the company demand wage at a high
rate in order to maintain with their rising cost of living.
Due to this, business also increases the prices of their
offering in order to offset the increased wages and it leads
to self-reinforcing loop between the increase in the prices
and wages.
Inflationary periods and main causes
Impacts of inflations on company’s operations and performance
Increasing inflation is creating an impact on different industries but its impact is more
serious on small businesses like restaurants, food as well as a hospitality business. Inflation
is the result of a global crisis occurred related to health which provides no opportunities for
small business owners and also it ceases operation in a complete manner. This inflation
create an impact in the recent years which is the result of the global health crisis which
creates a serious impact on the owners of small choice and due to this, a business owner
needs to cease the operation of the firm in a complete manner (Koester and Grapow, 2021).
There are around 84% of small business owners are there in the US which is operating in
different sectors are concerned due to the impact of inflation over the economy occurred due
to covid-19. These people are urging to lawmakers in order to act in a quick manner and
also they are replenishing the revitalization funds of the restaurants which is quick and also
depleted due to higher demand. The tourism and hospitality industry sector is one that
directly impacts through economic as well as socio-political developments. The hospitality
industry needs to make decisions and act faster in order to overcome of the pressure of the
increasing of food costs, wage cost, labour shortages and commodities. According to the
tourism news, skift and research site, inflation is not that bad for the economy as it rises in
the prices and which is good for the economy (Osinubi and et. al., 2021). Airline as well as
travel lodging prices are less in comparison to the rate of pre-pandemic. According to the
statistic demand is the travelling industry is returning which reflect that inflation is creating
positive impact over the travel industry. There are different economy hotels which also get
opportunities as it allows them to offer their service for the travellers who are price sensitive
as they are able to stay at the affordable stays. All these things also create positive results of
the hotel of holiday inn as they get both the positive and negative impact of the inflation
over the operation of the firm.