Hospitality in Travel & Tourism Sector: A Report, ICON College, HND

This report, prepared for the HND in Travel and Tourism Management at ICON College, analyzes the hospitality industry's provision within the travel and tourism sector, using Premier Inn as a key example. It begins with an introduction to the significance of the hospitality industry, detailing Premier Inn's operations, mission, and vision. Task 1 explores the scale, possibilities, and role of the hospitality industry in tourism, including employment opportunities and the inter-relationship between hospitality and travel & tourism. Task 2 evaluates the consequences of integration strategies, such as horizontal and vertical integration, and their influence on hospitality businesses, outlining implications like economies of scale and market competition. Finally, Task 3 develops a rationale for a new hospitality business, including a developmental plan. The report concludes with a summary of findings and references.

Written Report
Unit 12 – Hospitality provision in the travel & tourism
sector (Level 4)
ICON College of Technology and Management
HND in Travel and Tourism Management
Student Name:
Submission Date:

Table of Contents
Introduction................................................................................................................................1
Task – 1......................................................................................................................................1
Scale, possibility and role of hospitality industry in tourism sector.......................................2
Inter-relationship between hospitality and travel & tourism sector.......................................3
Task – 2......................................................................................................................................4
Evaluating the consequences of assimilation.........................................................................4
Discussing how integration has influenced hospitality business............................................5
Task – 3......................................................................................................................................6
Developing a rationale for the new hospitality business........................................................6
Developmental plan................................................................................................................6
Conclusion..................................................................................................................................9
References................................................................................................................................10

Introduction
In the current modern world, hospitality industry has achieved more significance in
regards with management of individuals who move from one domicile to the other for their
entertainment needs or for a business purpose. The hospitality industry incorporates all
related business entities such as hotels, air transportation, leisure comforts and restaurants
(Barrows, 2011). The hotel selected for the current research study is Premiere Inn. It is one of
the largest hotel chains of UK operating at variety of locations. It has around 72000 rooms
and 785 hotels all across the nation. It was established in the year 1987 and is competing
effectively with Travelodge and Ibis Hotels. In the year 2006, the hotel entered into the
market of UAE through joint venture agreement with Emirates Group (Premier Inn, 2016).
The main objective of the hotel is to engage their customers with the brand. They also want to
streamline the journey of their customers for booking rooms and managing the existing
booking more quickly and at ease. Further, Premium Inn also wants that this service should
be available to each and every one with a smartphone regardless of their model, making and
platform. In addition to this Premium Inn is the leading brand of Whitbread Plc. They always
promise to offer their customers good sleep and consistently carry out their activities extra-
ordinarily. They have also won many awards because of the quality in facilities such as free
TV and WI-FI access, bar & restaurant etc. Moreover, all these facilities are being available
at reasonable price.
Premium Inn hotels are also mounting their market reach at the international level.
Pertaining to this, they have opened a new hotel in Dubai as well as two in India. The main
mission and vision of the hotel is to make their hospitality brand one of the best by paying
attention on the needs of the customers. In the coming future, Premium Inn hotel is planning
to add more than 50 thousand rooms to further bolster its leading position in the industry.
Because of the strong growth of the hotel, the hotel was able to achieve consistent amount of
return on capital. Premium Inn has also done a revenue forecast of £3,295m for the next year
and return on capital is expected around 13.4 percent. As a trained travel and tourism
executive, the inter-relationship amid hospitality and wider travel & tourism will be
examined. Further, evaluation of the consequences of assimilation of the industry and its
affects will be done. The final portion of the research study will cultivate a strategy for the
hospitality business.
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Task – 1
The travel and tourism sector is considered as the major component of leisure activity
being performed by individual. As per the sources, travel & tourism sector contributes 33
percent of gross domestic product to the economy (Barrows, Powers and Reynolds, 2012).
The scope of the hospitality industry includes the range of businesses that offers different
services as well as facilities. Thus, the scope of Premium Inn is quite wide. It includes many
components of hotels, farmhouses, amusement park, vials, motels, resorts and guesthouses.
Some of the characteristics of the hospitality industry are being defined underneath:
 It offers and develops employment opportunities for many people
 It is quite different from monotonous industry and develops interests of people
towards it
 Hospitality industry is customer oriented which always aims to satisfy the customers
 Further, it also helps in releasing stress of people by creating fun time and offering
entertainment (Brotherton and Wood, 2008)
Scale, possibility and role of hospitality industry in tourism sector
 Employment opportunities – Premium Inn hotel operates within hospitality and travel
industry and these industries are also about offering satisfaction to the customers.
Therefore, large numbers of experts are being required for building healthy
relationships with the customers so as to offer them comfort. As per the studies,
employment opportunities all throughout the world have been increased by 1.5
percent from 2008 to 2009 in the travel industry. Furthermore, it gives employment
opportunities to more than 260 million of people (Chon and Yu, 2009).
 Medical tourism – It is a kind of tourist activity where people travel from one nation
to other for availing any medical treatment. This type of travelling is generally not so
expensive because it is related with different hospitals, restrooms, health care clinic
and many more.
 FDI and economic growth – Job searchers for availing employment travel to distinct
places and in turn give rise to hospitality. People migrating from one nation to other
can also develop skills being needed for development in different nations (Sheng,
2011).
Inter-relationship between hospitality and travel & tourism sector
The travel and tourism sector is one of the sub-sectors of the hospitality industry.
Travel industry provides merchandise shares some relationship with the merchandise being
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offered by the hospitality industry. Travellers show great level of interests towards travel
packages which is being provided along with optimum quality standard and at reasonable
price. In addition to this, the success of the travel and tourism sector is significantly
influenced by the related hospitality services such as recreational services, tourist attractions,
transport services, leisure activities etc. Based on all these services, people make decision
about the destination to be visited in their vacation (Cook, Hsu, and Marqua, 2013).
Premiere Inn has also paid attention on all these elements meticulously and has made
sure that accurate as well as proper services will be offered to their clients so as to offer them
decisive level of satisfaction. Furthermore, the hotel also offers excellent services to their
clients which aids to the value of the money spend by them. In this way, Premier Inn hotel
sets the service performance benchmark of the whole industry (Lee, 2013). Premier Inn hotel
provides hospitality services to their guests as well as tourists. For them, quality and services
are regarded as one of the most vital element for their existence and so is in the travel &
tourism industry. By offering extra-ordinary services, the hotel can entice large number of
people to their hotels with joint collaboration with travel & tourism agencies. Thus, the
development and expansion of the Premier Inn will lead to the growth of the travel and
tourism organizations (Seydel, 2013).
Task – 2
Evaluating the consequences of integration
The integration referred to as the process by which the firm can increase its presence
and improve profitability by product development. It is vital for the business to acknowledge
the operations as well as processes that are inter-related with the integration. Thus, firms can
expand its product line related to the existing business through integration (Enz, 2010).
Further, this strategy is being adopted by most of the hospitality firms in order to provide
better services and for keeping the base of customer intact. Another integration strategy that
Premier Inn hotel can follow is to make improvement in the service quality while decreasing
the costs. This will help the hotel in placing themselves at competitive position in the
industry.
Integration strategies are generally of two types, i.e. horizontal and vertical
integration. According to Joseph Katie (2013), Horizontal integration is defined as the
methodology that helps in identifying the kind of administration control. It is applicable when
there is a takeover of one company by another or merger with another organisation. The
organisation that takes over must be in similar industry or at least in the same production line
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in comparison to the merged company. In horizontal integration all different departments of
the firm are appeared within one management. For Illustration, Premium Inn hotel has also
followed this in their brand. Instead of outsourcing its booking services to other travel
agencies, Premier Inn has created their own website through which all data concerning
booking and reservation can be explored in order to book the services. In this, the hotel is
exclusively working to earn maximum amount of profits and at the same extending the
customer area.
According to Joseph Katie (2013), vertical integration is defined as the merger within
the organisation that are in similar kind of industry they work but the difference lies in the
stages of the production or the distribution level they work. So they should be in different
phases of production or manufacturing for the vertical integration to take place. Therefore,
vertical integration is all about merger of hospitality industry with travel and tourism industry
(Walker, 2012). For illustration, Premier Inn has adopted vertical integration in which the
booking facility is being outsourced to some other travel agency for increasing the base of
customers as more and more people will inquire about the packages that suit their budget and
they can easily customize the same. Because of this integration, the area was expanded and
even services were extended as well.
Implications of the integration of hospitality industry
For successful integration, all the services should remain same in every aspect for the
firms which have multiple operational locations. For instance, Premier Inn has its operation
in varied nations of the world and all the services being offered by them are of same quality
irrespective of the place or location. This helps in improving the reputation of the brand and
at the same time helps in satisfying large number of customers (Enz, 2010). Because of the
merger of Premium Inn, there is an elimination of small firms within the market. Due to this,
employees working these firms become unemployed which affects the economy of the nation
negatively. In addition to this, conflicts might take place amid the merger firm because both
of them have different mission and strategies. Because of this integration, there has been
increase in the people desiring to travel in foreign countries which leads to augmentation in
the international trade and helps in bringing more foreign income within the nation
(Morrisson, 2008).
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How integration influences hospitality business
The hospitality industry is being influenced by integration in many ways. Speaking in
relation with the benefits of horizontal integration, it allows the company to take advantages
of cost reduction. Further, horizontal integration helps in entering the international market
easily and thereby reducing the cost of entering into the international market (Vrtiprah,
2001). This can be done by allowing the companies to exercise production and retail in
international market. But, it has some drawbacks as well. The lawful repercussions should be
considered as there are anti-monopoly laws in various countries. If the merged entity tries to
remove competitors from the market, these laws are utilized for protecting it. Vertical
integration too has some advantages such as ensuring smooth flow in the supply chain. This
happens by arranging exact amount of specific component required at the exact time. This
also makes the functioning of distribution system fast. Other than this, because of the vertical
integration there is an increase in the entry barrier for the new entrant which can be done by
reducing cost with the suppliers. It too has some disadvantages such as the nature and the
quality of merchandise provided by the external agency may fall in view of an absence of
rivalry (Airey and et.al, 2006).
Finally, adaptability to increase or decrease the raw material or segments might be
lost as the organization may need to continue a dimension of creation in quest for economies
of scale. Some of the other influences of integration on Premium Inn Hotel are as follows:
 Economies of scale – Because of the integration, the operating cost can be decreased a
lot. Premier Inn hotel has also integrated with a travel agency and has given some of
its services. The agency emerged out in its preliminary years and availed many
benefits out of this as well (Vrtiprah, 2001).
 Increasing the customer base – Integration helps in increasing the base of the
customers because the business is expanded and offering services in other nations,
regions or areas.
 Reduced level of competition – Through integration, monopoly in the market will
prevail. This signifies that the company will lose their competitors and customers will
have no choices left just to choose from the same company.
 Standardization – Standardization is quite complex and huge process because of the
presence of human element. The hotel Premier Inn has adopted a standardized process
which means that each and every branch of the hotel has same working environment
and procedures (Airey and et.al, 2006).
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 Quality – Quality increment is generally dependent on the components being involved
in the process of integration. Premium Inn hotel also comes across with the issue of
assuring quality services to clients by offering services as per the expectations of
customers.
 Increase in rewards and incentives – The rewards and incentives will be increased.
Therefore, employees will be satisfied and they will work hard to achieve the goals of
the firm (Andrews, Roberts and Selwyn, 2007).
Task – 3
Developing a rationale for the new hospitality business
For starting a hospitality business, there is a need of development of rationale. For
this, it is vital to evaluate the target market of the firm. Through evaluating the target market
as well as vital strategies being required to place the services within the market, rationale can
be developed effectively. Concerning this, it is very much important to determine the location
of the hotel as it can influence the cost and revenue. Along with this type of holiday
destination should also be decided. Premier Inn Hotel has decided to start new hotel in
Cornwall. It is a nation in the South West England in UK. The market which the hotel will go
to target will be both men and women. Since, the new project needs to be built in that
location which is considered as the most famous holiday destination, the market that needs to
be targeted may involves people with high income level as well as middle income level
(Beaver, 2005). Most of the time, people always desire to travel within a group or tour. Thus,
groups with male, female and children can be targeted by the hotel.
Cornwall which is the new location of the hotel within United Kingdom, target market
can be approached easily by evaluating the demographic and social-cultural aspects in that
area. Place should be well-organized enough that it attracts both incoming as well as outgoing
customers. Furthermore, the hotel can also give different types of discounts such as free
breakfast, accommodation etc. In addition to this, they can also create different range of
products within their product lines. For attracting outbound tourists, offers related to transport
such as airlines and other amenities can prove to be effective. Finally, inbound tourists can be
attracted by conducting conferences and Banquettes.
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Developmental plan
For the purpose of developing a plan for the new hospitality business, it is very
essential to consider the organizational structure, operational requirements and human
resource allocation. Following stages should be considered for developing the plan:
Stage 1 – Development
 Concept – The basic idea behind the new hospitality business is to expand the existing
business. The main objective is to engage abilities and skills that help the hotel in
achieving an advantageous position within the industry. The vision of the new project
is to provide improved & competent services to the clients.
 Research of the market – It encompasses research in regards with the location of the
hotel, its attractions, income level, GDP of the location etc. in addition to this, current
trends related with the selected location also needs to be considered (Kotler, Bowen
and Makens, 2010).
 Target market – The target market for the new hotel will be people falling in the age
group 24 to 64 years and those who fall in higher and middle income level.
 Location – For the new project, Cornwall in England can be selected. There are many
different attractions at Cornwall such as Tresco Abbey garden, museum, Bodmin Jail,
historic sites and beaches.
 Scale – Cornwall is being developed well as a destination in tourism. The tour
operators carrying out their business by taking into account niche market strategy.
 Funding – It can be carried out by approaching diverse stakeholders and investment
can be done from business profits of previous capital. Even banks and creditors can
also be targeted for availing funds (Hyde, 2008).
 Products and services – Premier Inn offer high quality products and services to their
customers in terms of food, transport, event management and accommodation
 Licensing – For running effectively, licensing is very much essential. Thus, the new
hotel should get licensing over quality of services to be offered categorization,
grading and membership within hospitality services.
Stage 2 – Design
 Ambiance –The new hotel will maintain healthy and safe environment with properly
lightening that offers comfort to the visitors
 Culture – Diversity within the culture is necessary so as to attract large number of
visitors from varied areas of world.
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 Brand – It is vital to develop branding strategy for alluring new customers and
retaining the existing one (Lickorish and Jenkins, 2012).
 Interior – Welcoming behaviour, arrangement of tables and chairs, wall papers,
decorative items, artistic paintings will be used in the interior of the hotel.
 Exterior – The hotel will have garden, fountain, car parking, and swimming pool area
and play zone for children.
 Functional areas – It involves daily operation of the hotel such as management
function, housekeeping services, functional facilities, security of the hotel, room
services, transport, safety of customers and many more. It will be monitored by the
management of the hotel (Jennings, 2001).
 Customer flows – This can be increased by providing beneficial deals, memberships
to the customers and arranging events.
 Link to target market – Through evaluating the needs of the target market, products
and services of the hotel can be changed.
 Customers with individual needs – People with different needs such as business
professionals, educational groups should be approached with different products and
services (Goeldner and Ritchie, 2003).
 Sustainability – It can be assessed by determining the ability of the business to change
related with the alteration within the current trends and outlooks of the tourists.
Stage 3 – Operations
 Staffing – Many functional areas like front line managers, housekeeping staff,
managers, chefs, security staff etc. should have required skills and abilities so that
they can work better to satisfy guests.
 Specialist qualifications – For managerial position, personnel with master degree in
management is required, security staffs will need effective training and security
experience, chef should have certification and diplomas in hotel management etc.
 Staffing issues related to seasonality – Conflict management plan should be
considered for managing services in off season. Moreover, employment planning
should also be done accordingly (Cavlek, 2002).
 Diversity in culture and conflict resolution – Effective training, motivation and proper
communication can help in managing conflicts and diversity in culture.
 Recruitment policies and procedures – Anti-discrimination policy, health and safety
and equality legislation should be taken into account.
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 Promotional activities – Hotel’s products can be promoted by using advertisement,
word of mouth publicity and own websites.
 Pricing – Hotel should adopt penetration pricing policy to attract more customers
(Klemm and Parkinson, 2001).
Conclusion
To conclude, it can be said that hospitality provisions as well as travel & tourism
sector have some of the relation with one another. The success of the travel industry is
dependent on the products and services being provided by the hospitality sectors. Both these
industries will flourish only when the needs of the customers are satisfied as both have the
main purpose to offer customer satisfaction.
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References
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