Hospitality Provisions in the Travel & Tourism Sector: A Report

This report provides a comprehensive analysis of hospitality provisions within the travel and tourism sector, emphasizing the interrelationships between hospitality and the broader tourism industry. It explores key elements such as accommodation, food services, event management, and leisure activities, highlighting their significance in creating integrated tour packages and managing visitor attractions. The report also delves into the implications of horizontal and vertical integration within the hospitality industry, using the Marriott International acquisition of Starwood Hotels & Resorts Worldwide as a case study. Furthermore, it discusses the benefits and drawbacks of integration, including economies of scale, standardization, and potential market control. The report concludes by underscoring the importance of the hospitality sector in supporting and enhancing the overall travel and tourism experience.

Hospitality Provisions
[Type the author name]
[Pick the date]

Contents
Introduction.................................................................................................................................................2
Task 1..........................................................................................................................................................3
1.1 Discuss the interrelationships between hospitality and wider travel and tourism businesses.............3
Task 2..........................................................................................................................................................6
2.1 analyse the implications of integration to the hospitality industry.....................................................6
2.2 discuss how integration has affected a hospitality business...............................................................8
Task 3........................................................................................................................................................10
3.1 Develop a rationale for a selected project clearly justifying decisions linked to target market........10
3.2 Develop a plan for a hospitality business which includes the operational requirements of the
business’ organisational structure in relation to human resource allocation. You should include an
organisational chart...............................................................................................................................13
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19
1 | P a g e

Introduction
Hospitality industry is the foundation of world’s largest industry i.e. travel and tourism industry.
The important factor behind the exponential growth of the tourism sector is the innovative and
creative approaches implemented in the hospitality industry. Hospitality industry caters to the
millions of customers every year and contributed in the growth of the tourism economy of UK.
There are different elements that are included in the hospitality sectors which are hotels for
accommodation, small motels, B&B facilities, bars, pubs, restaurants and membership clubs etc.
This wide range of facilities provided by the hospitality industry has made sure that customers
have everything they want when they go on a holiday. Along with this, there are business events
which are organised by the hospitality industry organisations that have contributed in the
development of wide travel and tourism sector. In this report, various hospitality provisions that
are relevant to the travel and tourism sector and their relationships with the wide tourism sector
would be analysed. Integration in the hospitality sector would also be discussed in detail to
understand the importance of hospitality sector in the context of wide travel and tourism sector.
2 | P a g e

Task 1
1.1 Discuss the interrelationships between hospitality and wider travel and tourism
businesses
A detailed picture of the various elements of the hospitality sector is shown in the below image
that include all the important elements of the hospitality management:
Figure 1: Hospitality Industry Scope (Airey, Dredge & Gross, 2015)
The traditional definition of the hospitality industry refers to the accommodation services and
lodging, leisure activities, entertainment services and events management. On the other hand,
wide travel and tourism sector adds transportation, visitor attraction management and providing
innovative tour packages such as eco-tourism and enclave tourism. Both industries, Hospitality
and Tourism go hand in hand with an aim to provide excellent services to the customers and
fulfil their needs and wants.
3 | P a g e

Accommodation and lodging are the most important factors of the hospitality industry on which
the travel and tourism industry rely heavily. Most of the tour operators have contracts with the
accommodation providers to make sure that a good night stay could be arranged for the
customers. There are different types of accommodation services such as luxury accommodation
and 4 Star and 5 Star hotels, economic accommodation in motels and B&B facilities etc.
Excellent accommodation service that suits the spending power of the customer is the backbone
of the tourism sector which is managed by the hospitality industry.
After the accommodation, food is the primary worry for the tourism organisations. People from
different backgrounds, cultures and countries go on tours and they expect that good food is
available to them as per their requirements. There are fast food joints, cafes, restaurants, catering
providers and many other elements that are the part of the hospitality industry and essential for
the tourism business (Ali & Amin, 2014).
Tourism Organisations usually offer packaged deals or tour packages to the customers that
include a bundle of services such as transportation, accommodation, food, events, tour to the
visitor attractions and conferences. Hospitality industry plays an important role in the
arrangement of all these services to the customers. Hospitality industry provides a platform on
which the tour packages are developed and marketed by the travel and tourism organisations
especially the tour operators.
The packaged holidays have become very popular these days. These packaged holidays are
customised as per the needs and wants of the customers. Tourism organisations conduct market
research and then identify a tourist destination or a combination of tourist destinations that has to
be included in the package depending on the target market segmentation (Ariffin & Maghzi,
2016). Some of these packaged holidays target high income group customers who want to go on
a luxury holiday abroad while some of the holiday packages are developed to cater to the needs
of the customers in lower income group who just want to spend some time on a holiday with
reasonable expenses as per their capacity.
Along with providing the facilities for the packaged tours offered by the tourism organisations,
hospitality industry also takes care of the event management and conference arrangements. Many
corporate organisations need services for their annual conferences where hospitality
4 | P a g e

organisations are contracted by the tourism providers for the same. In these conferences, the
accommodation of the guests, their food and relevant services are managed by the hospitality
sector. Similarly in the event management, whole process is outsourced to a hospitality
organisation that takes cares of providing the space for the event, decoration, arrangement of
foods and beverages etc. are managed by the hospitality organisation. Outsourcing the catering
services is an important element of these events and conferences. Customised menu are
developed to make sure that the food is according to the taste and requirement of the attendees.
Catering for the outdoor events is also an essential part of the hospitality industry. Tourists who
go for local site seeing are provided snacks during these visits to make sure that they are able to
enjoy the trip without any interruption (Ariffin, Bibon & Abdullah, 2015).
Leisure activities are also an important part of the hospitality industry. Hospitality organisations
provide various kinds of leisure activities to the customers. Mostly these services include theme
parks, fun parks, sports activities, gaming events, spa services and luxury transportation. Many
of these services are provided to the tourism organisation customers in the packaged deals.
People who buy luxury tour packages could avail these services without any extra charges as
payment for these services are already included in the tour package (Bharwani, & Jauhari, 2013).
Big tour operators like Thomas Cook and TUI has collaboration with the hospitality
organisations who own theme parks, fun parks and sports complexes.
Exhibitions and Visitor Attractions also combine the wider travel and tourism industry with the
hospitality industry. There are many famous visitor attractions in UK such as British Museum,
V&A Museum, and National History Museum etc. that attract visitors from across the world.
Because of the high inflow of the tourists into these visitor attractions, a systematic management
of the attraction is essential that is an important aspect of the hospitality management. Similarly,
many exhibitions are organised in the different parts of the country where hospitality
organisations are responsible for the event management.
Business travel and aviation is an important part of the travel and tourism organisation.
Globalisation has brought significant changes in the corporate business operations. Now,
organisations have expanded to many locations and their executives travel on regular basis which
has created an opportunity to the tourism industry. Now hospitality organisations have contracts
5 | P a g e

with corporate organisations and offer them economic travel options with reasonable
accommodation. This kind of opportunity has turned into a mass business because of the
frequent fliers from corporate organisations.
6 | P a g e

Task 2
2.1 analyse the implications of integration to the hospitality industry
Expansion and growth are two very important aspects of the hospitality industry. To achieve
these objectives, hospitality organisations use integration. There are two types of integrations
which are mainly implemented in the hospitality sector – Horizontal Integration and Vertical
Integration. Both types of integrations use different approach and cater to the special growth
needs of the hospitality organisations.
Horizontal integration refers to the merger, acquisition or contractual agreement between two
organisations that operate on the same level of business chain (Brey et al, 2015). For example,
acquisition of a renowned hotel by another hotel organisation like falls in the category of
horizontal integration. Similarly, when a large hotel chain like Marriot acquires another hotel and
includes it in its chain of hotels by branding as one of the Marriot Hotel where ownership of the
acquired hotel is transferred to the large organisation (Marriot Hotel) is also a form of horizontal
integration.
Mostly the brand names of the organisations included in horizontal integrations are maintained
as it is even through the acquisition or merger has taken place. This allows the organisations
involved in keeping the loyal customer base intact. An example of the horizontal integration is
the acquisition of the budget airline “Go” by Easy Jet. “Go” airline was originally owned by
British Airways but after the merger in 2002, the control of the company was shifted to Easy Jet.
However, the name of the airline changed; it helped Easy Jet in increasing its revenue and
market share (Brotherton, 2013). According to some experts, if Easy Jet had not changed the
name and logo of “Go” airline, it would have been able to get more customers.
On the other hand, acquisition of a travel agency by a tour operator like Thomas Cook falls in the
category of vertical integration
In vertical integration, a firm takes over an organisation which is at a different level in the same
distribution chain. It allows the organisation to strengthen its position in the market and have
7 | P a g e

Tourism organization
Shopping Centers
Tour Operators
Hotels
Travel Agencies
more control on the operations. The supply chain of the organisation becomes solid and wastage
is removed in the distribution chain.
Types of Vertical Integrations
There are two types of Vertical Integrations in the hospitality industry– Forward Integration and
Backward Integration. In case of Forward Integration, an organisation which is at the higher
level of the chain acquires an organisation at the lower level. For example, a tour operator like
Thomas Cook acquiring a travel agency falls in the category of forward integration. On the other
hand, a Travel Agency acquiring a Hotel is called backward integration.
Figure 2: Vertical Integration in Hospitality Industry (Buhalis, & Crotts, 2013)
8 | P a g e

According to a survey conducted in 2012 by British Hospitality Association (BHA) it has been
identified that almost all big hospitality and the travel and tourism organizations based in UK has
merged with many companies so as to establish a dominate place in the international markets.
Positive of integration
One of the most important benefits of the integration is economy of scale as it helps the
organisations in increasing the market share and net revenue (Crick & Spencer, 2016). The
competition in the market decreases with horizontal integration and organisations are able to
develop a loyal customer base. Standardisation is another benefit of the integration especially in
case of vertical integration. It results in organisations having a steady supply of services with
good quality to the customers.
Negatives of integration
Control and manipulation of the market increases with horizontal integration because customers
are left with fewer options and organisations could hike the price of the services. To handle this
situation, government of UK has implemented many legal regulations on mergers and
acquisitions in the hospitality sector.
2.2 discuss how integration has affected a hospitality business
Integration has happened in many sectors in the last decade but acquisition of the Starwood
Hotels & Resorts Worldwide by Marriot International is the biggest merger in the history of
hospitality sector. Marriot International was started in 1927 by John Willard Marriot when he
opened a small root beer stand in Washington, USA. Since then, the hotel has established itself
as a luxury accommodation provider. The growth and expansion of the Marriot International
depended mainly on the horizontal and vertical integration. While it has acquired many small
hotels during the long process of expansion, the acquisition of Starwood Hotels & Resorts
Worldwide helped the company in establishing itself as the market leader in the accommodation
industry (Duncan, Scott & Baum, 2017). The hospitalist industry has seen many different types
9 | P a g e

of acquisitions and mergers but the deal of Marriot International and Starwood Hotels & Resorts
Worldwide created history which saw an investment of $12.2 billion, biggest in the history.
After the acquisition of Starwood Hotels & Resorts Worldwide, Marriot International now has
5,500 hotels which make it the largest accommodation provider. The merger has resulted in
Marriot International having more than 1 mission rooms to provide to the customers worldwide.
After the completion of the deal there will be following organisations working together to
provide services to the customers in USA, UK, China, India and many other EU countries -
Marriott’s flagship brand and Sheraton; Edition Hotels and W Hotels; Ritz-Carlton and St. Regis;
Moxy Hotels and Aloft Hotels (Janicic & Jankovic, 2017).
After the integration, approximately 1.2 billion customers would be retained by the group which
is a huge figure in the hospitality industry. The merger would help Marriot International in
standardisation of the services in all its hotels to make sure that it would be able to provide better
services to its customers. However, a big question arises when mergers at this level happen –
would the customers be able to receive the same benefits they were receiving before the mergers.
Starwood Hotels & Resorts Worldwide already has many loyalty programs for its customers
which are different than Marriot International. Hence, it would be a big challenge for the Marriot
International to make sure that it is able to provide the same benefits and discounts to the
existing customers of Starwood Hotels & Resorts Worldwide.
10 | P a g e

Task 3
3.1 Develop a rationale for a selected project clearly justifying decisions linked to
target market.
In this section of the report, I as a Junior Consultant with PKF hotelexperts would device a plan
for developing a new Hookah Bar in London. The new Hookah Bar with the name of Vintage
Café would help PKF hotelexperts in expanding its presence in the market and acquire new
customers. The Vintage Café would serve Hookahs to adult customers along with fast food. In
future, the Vintage Café could also expand by providing economic accommodation to the foregin
tourists in the form of Bed & Breakfast.
Concept
Currently, PKF hotelexperts only provides accommodation services to the foreign tourists who
belong to high income group and the food is also served with premium pricing. Because of the
premium pricing and catering to the foreign tourists only, there is not much scope for the
expansion in this area. There are already many international accommodation chains in London
such as Marriot International and Hilton Hotel. Hence, it is essential that a new type of
hospitality business is added to the organisation (Kim, Vogt & Knutson, 2013). The Vintage
Café would help the PKF hotelexperts in getting the local customers especially the millennial
who always look for something new when they go out. The Vintage Café would not only serve
Hookah but also the fast food and drinks. Hence, it would be a place that would fulfil most of the
needs of the millennial.
Target Market
11 | P a g e