Hospitality & Tourism: Analyzing Interrelationships & Integration

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Added on 2024/06/28

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This report provides an analysis of hospitality provision within the travel and tourism sector, focusing on the interrelationships between the two industries and the implications of integration. It discusses the composition of the hospitality industry, including food and beverage, and accommodation sectors, and its benefits to the tourism industry. The report also examines the impact of vertical and horizontal integration, using examples such as Marriott International's acquisition of Delta Hotels and Intercontinental Group's acquisition of Kimpton Hotels. Furthermore, it includes the development of a business plan for a restaurant, justifying decisions related to the target market and illustrating operational aspects. The report concludes that integration has significantly impacted the hospitality sector by increasing service quality, reducing operational costs, and standardizing organizational processes.

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Table of Contents
INTRODUCTION........................................................................................................................... 4
TASK 1............................................................................................................................................ 5
1.1 DISCUSSION OF THE INTERRELATIONSHIPS BETWEEN HOSPITALITY AND
WIDER TRAVEL AND TOURISM BUSINESSES......................................................................5
TASK 2.......................................................................................................................................... 10
2.1 ANALYSING THE IMPLICATIONS OF INTEGRATION TO THE HOSPITALITY
INDUSTRY................................................................................................................................... 10
2.2 DISCUSSION ABOUT HOW INTEGRATION HAS AFFECTED THE HOSPITALITY
BUSINESS.................................................................................................................................... 12
TASK 3.......................................................................................................................................... 14
3.1 DEVELOPMENT OF A RATIONALE FOR A RESTAURANT INDUSTRY BY
CLEARLY JUSTIFYING DECISIONS LINKED TO TARGET MARKET..............................14
3.2 DEVELOPMENT OF A BUSINESS PLAN..........................................................................16
CONCLUSION..............................................................................................................................21
REFERENCES.............................................................................................................................. 22
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List of Figures
Figure 1: Sectors of the Hospitality Industry...................................................................................6
Figure 2: Travel and Tourism Sector...............................................................................................7
Figure 3: Interrelationship between Hospitality and Travel and Tourism Sector...........................8
Figure 4: Integration in Hospitality Industry.................................................................................10
Figure 5: Oxford............................................................................................................................ 14
Figure 6: Business plan for fast-food restaurant............................................................................15
Figure 7: Design of a fast-food restaurant.....................................................................................17
Figure 8: Operations at fast-food chain......................................................................................... 19
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INTRODUCTION
The hospitality industry has gained importance in present scenario by fulfilling the requirements
of those people who frequently love to travel either for leisure or business purposes. In the given
study, PKF hotelexperts has been taken into consideration as it provides a wide range of services
to its customers. The study would discuss the interrelationship between hospitality and travel and
tourism sector within the given scenario. The next step would be to understand the impact of
integration and how it affects the hospitality business of a given enterprise. At last, there would
be a development of a business plan which would illustrate all important information about the
organisational chart of PKF hotelexpert.
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TASK 1
1.1 DISCUSSION OF THE INTERRELATIONSHIPS BETWEEN
HOSPITALITY AND WIDER TRAVEL AND TOURISM
BUSINESSES
With an increase in the impact of globalisation, the hospitality sector has gained significant
prominence whole over the world. Also known by the name HOSPEX (hospitality exchange), it
has been acting like a social networking site which has been centrally organised with technology
and offers a wide variety of services to satisfy the needs of the people (Barrows, 2011). It also
provides security to the people so that they would be able to enjoy their vacation freely and
without any tensions with their friends as well as their family members.
Hospitality Industry
It could be defined as a broad category of fields within the given service industry and includes in
it lodging, transportation, theme park, food and beverages, tourism and many more so as to
provide efficient services to the people and satisfy their needs and aspiration.
Composition of Hospitality Industry
The hospitality industry includes not only hotels such as PKF hotel, but it includes a wide variety
of sectors which are an equal part of the given industry. These sectors are shown below in the
given diagram:
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Figure 1: Sectors of the Hospitality Industry
Source: [Barrows, et al. 2012]
Hospitality Sector comprises three important sectors which are explained below:
Food and Beverage Industry
This is the largest segment in the food sector of the hospitality industry and includes restaurants,
eateries, fast-food centres and other catering services. When it becomes a part of the hotel, it
would enhance the experience of the people by offering good customer services in the form of
excellent food and beverages (Walker, 2012). For PKF, this sector has been an integral part of its
service and includes a fast-food chain in all its hotels so as to provide good quality food and
satisfy the needs of the people in an efficient manner.
Accommodation
It is one of the broad segments of the hospitality industry and includes breakfast and bed
facilities provided within the hotel premises. Its foundation is based on providing attentive
customer service with comfort and great efficacy. PKF provides good hotel services with a clean
and tidy room, comfortable cushion, and all the basic amenities so as to satisfy the needs and
requirements of the people in an efficient way.
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Figure 2: Travel and Tourism Sector
Source: [Mahrous and Hassan, 2017]
Travel and Tourism Sector
It is an important part of the hospitality industry. It is considered as the money making machine
because it helps in the generation of the revenue and thus helps in the economic growth of the
given place. Furthermore, it also generates employment for a large number of people who makes
this industry as their source of income (Cook, et al. 2013). One such example is the availability
of 4-star hotels with 200 beds which would facilitate different ranges of services such as
refurbishment program, eatery demand, local laundry, gym facilities and swimming pool and
many more.
Benefits for tourism industry due to the hospitality industry
The tourism industry is greatly benefitted by the hospitality industry as it plays an important role
in its development and helps in providing greater satisfaction to the customers. When a tour
package is being prepared by any tour operator, the hospitality industry provides helping hand by
playing a prominent role in attracting the customers towards tourist destination. This industry
helps the tourism-related organisation by making available to them basic services which must be
provided to the customers such as food, accommodation, entertainment and so on (Sheehan, et al.
2018). Thus, hospitality industry helps in structuring the basic guidelines for the proper
development of a tourism sector at a given tourist destination.
There has been a strong relationship found between travel and tourism and hospitality industry.
When there has been an increase in either the spending power of people or GDP of a country,
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there would be a tremendous increase in utilisation of the services provided by the given industry
(Mohseni, et al. 2018). Furthermore, increase in income level among the people results in
spending more on the vacation and leisure time which in turn proves to be beneficial for the
given industry.
An interrelationship between hospitality and travel and tourism industry
Figure 3: Interrelationship between Hospitality and Travel and Tourism Sector
Source: [Yüksel, 2017]
There is a significant interdependency between travel and tourism and hospitality industries
which could be explained in association with:
 Increase in income among the customers so as to purchase particular services without any
hesitation
 Increase in sales
 Increase in range of customers for the hospitality industry
 High economic growth in terms of infrastructure, tourism facilities etc.
 Increase in the destination range of tourism
 Increase in tourism-related activities (Nieves and Quintana, 2018)
 High development occurring in the hospitality industry in relation to the tourism
destination
Furthermore it has also been found that with the increase in sales and revenue in the tourism
industry, the hospitality industry would also be equally benefitted from it. Besides if any
enterprise associated with hospitality industry with strong brand image such as PKF opens one of
its hotel chains at any tourist location, then the tourists would stay at that hotel and would visit
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the given tourist destination which in turn would help in its significant growth and development
(Cook, et al. 2013). In addition to this, there is a widespread support of marketing activities
employed by both the sectors worldwide such as theme parks, visitor’s attractions and exhibition
centres which proves to be beneficial to both the given sectors.
Thus, it could be said that interdependency among the given sector has helped both of them to
achieve success and generate profit for the given enterprises.
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TASK 2
Introduction
Working as a Junior Consultant in PKF Hotelexperts, the study would be performed by the
consultant to analyse the impact of integration in the given industry so as to get a clear picture
about the impact whether in favour or against the industry. Furthermore, there would be a
detailed discussion about how integration has affected the working and operation of the
hospitality industry. The consultant should also explain these points by taking the reference of
Marriot International, Intercontinental Hotels Group etc. into consideration.
2.1 ANALYSING THE IMPLICATIONS OF INTEGRATION TO
THE HOSPITALITY INDUSTRY
Figure 4: Integration in Hospitality Industry
Source: [Guchait, et al. 2018]
In the present turbulent environment, the industry could not accolade them on past success. It has
to utilise integration strategies to stay relevant in the present business environment. Not only it
would help in saving surplus amount, but it would also help in decreasing the gap between the
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industry and tourist lovers and thus would prove to be beneficial for both of them. Integration
could be defined as a technique where the arrangement between two services is linked together
to reap mutual benefits. One such example is the expansion of the renowned hotel chain to an
unknown tourist destination. This would not only provide better facilities to the customers but
would also help in planned development of the given tourist destination (Quintana-García, et al.
2018). It would prove to be profitable for enterprises associated with hospitality, tourism, local
people and tourists. Besides, if two hotel chains such as PKF and Marriott Hotel Group integrate
their services with the requirements of the customers, it would increase their profit to greater
heights. There are two types of integration which are explained below:
Vertical Integration
A type of integration when two enterprises of different industries merge together, they would
experience few losses and would be able to manage their operational cost. In addition to this,
they would see a surge in growth of their business across the globe (Peters and Kallmuenzer,
2018). For example, when Marriott International acquires Delta Hotels and resorts, there was a
decrease in competition among them and both sectors saw a remarkable generation of the
revenue.
Horizontal Integration
In this type of integration when there is an amalgamation between the two sectors (tour operators
in the given study); there would be an expansion of the business encompassing the geographical
location and results in a proper representation of all the regions (Jung and Yoon, 2018). For
example, when Intercontinental Group acquires Kimpton Hotels and Restaurants for $430
million, the Group was able to provide its services to those areas which were out of reach for
them and thus helped it to establish as branded hospitality enterprises across the world.
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2.2 DISCUSSION ABOUT HOW INTEGRATION HAS
AFFECTED THE HOSPITALITY BUSINESS
There has been a significant impact on the hospitality sector due to integration. The major aim of
integration in a hospitality industry is to increase the corporate relationship between different
business ventures. Utilising it effectively would results in independent operation of the business
as per the requirements of the people in an effective manner (Guchait, et al. 2018). It helped the
hospitality sector to provide a dynamic environment where it would be able to perform an
important function and be able to provide a good structure for its proper development. The
impact on the hospitality industry could be explained in the following ways:
 It helps in increasing the quality of services provided to the customers to increase their
satisfaction level
 It helps in significant reduction in the operational cost of any given hospitality enterprise
 It provides proper standardisation of the organisation
 It helps in the identification of issues associated with the given industry and solves them
by finding a solution in a quick manner
To analyse the positive impact of integration in the hospitality sector, an example of the Delta
Hotel is taken into consideration. It is a 4-star hotel owned presently by Marriott International.
One such issue which was affecting its efficiency was the transaction which was occurring
differently for different services which resulted in increased operational cost (Sun and Lee,
2018). To remove this issue, Marriot hotel merges Delta hotel completely which not only
resulted in reduced operational cost but also allowed the company to increase its base as well as
profit share which was evident with its total generation of revenue in the form of $2.7 billion.
Conclusion
The given case study has presented how integration has proved its importance in the hospitality
industry and how it has been helping the given industry to remain in the market in the present
scenario. Besides, there had been a detailed description of how integration has affected the given
industry and concludes that the integration has positively impacted the hospitality industry by
increasing its growth and profit all over the world. At last, integration types such as vertical and
horizontal integration were explored to assess their benefits in the hospitality sector and it was
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