Travel & Tourism: Hospitality Integration and its Impacts (TTM301)

Desklib provides past papers and solved assignments for students. This project analyzes the hospitality and tourism sectors' interrelation and integration.

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HOSPITALITY PROVISION IN TRAVEL &
TOURISM SECTOR

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TABLE OF CONTENTS
INTRODUCTION........................................................................................................................3
TASK 1 – ARTICLE......................................................................................................................4
INTERRELATIONSHIP AMONGST HOSPITALITY AND TOURISM BUSINESS............................4
TASK 2 – MANAGEMENT REPORT............................................................................................ 8
IMPLICATIONS OF INTEGRATION OF HOSPITABILITY INDUSTRY...........................................8
EFFECTS OF INTEGRATION ON HOSPITABILITY BUSINESS.....................................................9
CONCLUSION...................................................................................................................... 12
TASK 3 – PPT...........................................................................................................................13
CONCLUSION.......................................................................................................................... 30
REFERENCES........................................................................................................................... 31

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INTRODUCTION
Tourism and hospitability are considered as the interrelated business and are majorly
dependent on each other for their business growth. It has been extensively argued that
hospitability must be promoted as a commercial sector within the tourism industry. This
sector provides specialized services to its customers such as the adventure activities,
lodging, food, transportation facilities at tourist spots and many others. The hospitability
industry also provides similar services. However, these services need not necessarily for
entertainment or tourism purposes.
This report has been made with the objective of determining and analyzing the
interrelationship amongst the tourism and hospitability sector along with the integration of
the hospitability business.

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TASK 1 – ARTICLE
INTRODUCTION
As a junior consultant for PKF hotel
experts, it is a major responsibility of
remaining focused towards the
consultation processes with regards to
tourism, hotel and leisure. This article
would provide the manager with insights
about the role of the hospitability industry
within the tourism sector. The
relationship is being established amongst
the hospitability business and the travel
and tourism industry.
INTERRELATIONSHIP AMONGST
HOSPITALITY AND TOURISM
BUSINESS
Hospitality is a term which is widely used
for indicating the efforts undertaken for
providing the pleasurable and safe
environment to the patrons. This sector
provides numerous services to its
customers who include a wide variety of
services including food and drinks,
accommodation and leisure and
recreation (Kotler et al., 2017). Hospitality
management is the process of planning,
staffing, organizing, controlling, facilitating
and directing the human resources and
the operations with the objective of
serving the guests and visitors of the
hospitability industry and also ensuring
goodwill.
Figure 1 Sectors of Hospitality Industry
Source: Brotherton, 2015
In contrast to this, the tourism sector is
focused largely on the tourist activities
where the tourists have their focus on
exploring new geographic areas and also
at times ensuring that they remain
connected with the natural environment.
The tourism industry provides services
such as food and beverages,
accommodation and other related
businesses (Fang et al., 2016). Thus, it can
be said that the hospitability sector
functions as a provider of services within
the tourism industry. The major operators
within the tourism industry are the coach
operators, cruise and ferry companies,
car-hire businesses, airports and airlines
and train operators among others.

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Tourism aims at providing its customers
with the required support which would be
helpful for the travellers to enjoy their
travel whereas, hospitability can be seen
as an act of providing pleasant services to
the customers (Leung et al., 2013).
Hospitability takes into consideration the
activities which form a part of the tourism
industry such as the accommodation
services, which is usually required for
foreign tourists. It can also be said that
the majority of the business for the
hospitability industry is the end result of
undertaking the activities of the tourism
industry. The organizations which are
established for providing travel and
tourism services act as a mediator
amongst the hospitability business and
the customers and can ensure their profits
by facilitating the interconnectivity
between the both (Fang et al., 2016).
Travel and tourism industry is expanding
and growing rapidly in many countries all
across the globe. This depicts the
increasing standard of living of the
individuals. With the increasing
digitalization, travel and tourism
companies are also shifting their
operations online (Fang et al., 2016). This
ensures that the travel industry becomes
easily accessible to potential customers.
The companies are also in a successful
position of reaching the target audience
and remaining connected with them by
providing them with various offers and
discounts through advertisements, emails
and other mediums of web marketing
(Xiang et al., 2015). The major tour
operators within the United Kingdom are
British Airways, Audley Travels and Kuoni
Travels among others. They are engaged
in providing complete travel packages to
the guests with regards to the outbound,
inbound and domestic tourism.
Hospitability sector is considered as a
different sector than the tourism industry
as the activities of the industry are
majorly aimed at providing memorable
and comfortable services to its customers.
The activities of the hospitability industry
also comprise of activities such as resort
management, event management and
also the regular hotel management
services (Fang et al., 2016). The
hospitability industry has a huge scope of
achieving customer satisfaction, by
involving in operations such as food
services and accommodation facilities.

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Figure 2 Relationship between tourism and hospitality
Source: Kotler et al., 2017.
From the above figure, it can be seen that
the travel and tourism services are
operational under the purview of the
activities undertaken by the tourism
industry. The hospitability industry has a
major role in supporting the activities and
the growth of the tourism industry at both
the international and national level. The
hospitability industry is engaged in a wide
range of operations (Tsai et al., 2015). For
instance, for the aviation industry, the
hospitability industry provides food and
beverages, priority boarding services and
different class of travel. At various events,
the industry offers premium packaged and
customized food and beverage packages
and facilities for disabled individuals
among others. For the various business
events, the company is engaged in
providing audio-visual equipment, food
and drinks and others (Kotler et al., 2017).
The hospitability industry has successfully
established various customer attractions
such as national trust. These provide the
customers with various choices for
restaurants, cafes and homes and also
these service providers with a medium of
earning revenues. This has been
performed by keeping in mind that the
travellers require the basic services from
the hospitability industry despite the
purpose of their visit (Fang et al., 2016).
The hospitability sector acts as a supplier
for the tourism industry. The hospitability
industry is constantly developed and
transformed as a result of the structure
and groups of guest availing services from
the industry. This is required to be
considered by the tourism industry for
ensuring sustainable development and
vice versa (Tsai et al., 2015).
The hospitability services which are being
provided by the tour operators are the
major consideration which is being
considered by the tourists before availing
the services. The selection of the tour
providers by the customers, in this case,
the tourists is majorly dependent on

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several selection factors comprising of the
availability of comfort during their stay at
hotels, the responsiveness of the staff and
the quality of food and beverages which is
being provided to them (Zaitseva et al.,
2016). Both the tourism and the
hospitability industry contribute
significantly to the overall development of
the economy by providing increased job
opportunities to the local people.
CONCLUSION
From the analysis, it can be said that the
travel and tourism and the hospitability
industry are fairly connected to each
other as both the industries have similar
objectives of providing the customers
with quality services and enhanced
experience. Both the industries provide
structural support to each other which in
turn ensures growth and sustainable
development of both the sectors.

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TASK 2 – MANAGEMENT REPORT
INTRODUCTION
The management report is being prepared by the junior consultant at the PKF hotel experts,
with the objective of analyzing the various mergers and acquisitions which took place within
the hospitability industry. The management report would also be aimed at evaluating the
consequences of integration and its influence on the hospitality industry.
IMPLICATIONS OF INTEGRATION OF HOSPITABILITY INDUSTRY
Within the travel and tourism industry, the distribution channel starts from the principal and
ends at the customers or the end users of the services. The chain is extremely small and
includes several complexities within the operations of the industry. With the objective of
increasing the market share, the tourism companies have their focus on the merger and
acquisition activities. The tourism companies do not believe in depending on a single
business line for its operations (Del Vecchio et al., 2018). Mergers and acquisitions facilitate
the tour operators in providing all relevant services across the supply chain. For instance,
the services of the TUI group were combined with that of the IHG. This facilitated the
efficient use of the resources possessed by both the companies such as accommodation,
food and beverages and transportation among others. The integration of companies helps in
forming a new legal entity, which would be responsible for governing the operations of the
hospitality industry (Laitamaki et al., 2016).
The players within the hospitability industry enter either into vertical integration or
horizontal integration.
Horizontal Integration:
As a part of horizontal integration, the businesses focus on entering the new geographic
locations or expanding the product and service offerings at the existing locations. This is
majorly done by acquiring another travel company and ensuring the retention of the original
brand name (Swart and Taylor, 2018). This helps in attracting a larger number of customers
and ensuring their loyalty for longer time duration.
Vertical Integration:

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With the focus on vertical integration, the travel agencies integrate their operation with
either the downstream or the upstream suppliers. This form of integration is being
extensively used by the organizations as a part of corporate strategy as it helps in
establishing a strong position with regards to differentiation, cost and also dealing with the
strategic issues (Loertscher and Riordan, 2019).
The major implications of the vertical and horizontal integration on the activities of the
organization are:
 Integrating the business activities ensure that a large business organization is being
established which would be capable of exercising control over the hospitability
industry and also manipulating the strategies of competitor firms (Neuhofer et al.,
2015).
 Through integration, the small business organizations enter into a consortium,
whereby they coordinate the activities with one another for accomplishing the
common objective of profit maximization. This also helps businesses in reducing the
overall costs of operations (Del Vecchio et al., 2018).
 The integration of business activities with foreign institutions leads to globalization.
For this reason, the organizations adopt the horizontal integration of activities and
also ensure global reach (Sigala, 2017).
 The brand image helps the organizations in ensuring the loyalty of the customers and
also ensures trustworthiness among the customers. By establishing a strong brand
image, the organization can ensure that a large number of customers are being
attracted towards the organization and also that the quality of services acts as a
distinguishing feature (Loertscher and Riordan, 2019).
EFFECTS OF INTEGRATION ON HOSPITABILITY BUSINESS
In recent times, it is evident that the Starwood hotel and resorts have been acquired by the
Marriot international for a total amount of USD 12.2 billion. This acquisition has helped
Marriott international to become the leader in the chain of hotels all across the globe. With
this acquisition, the organization has been authorized with 1.1 million rooms in over 5700
properties. Marriott International has a portfolio of across 30 leading brands which either
fall into the category of luxury or the moderate-tier hotels. This acquisition has also

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substantially increased the distribution channel of the organization. By this acquisition,
Marriott would also be in a position of providing strong competition to its major competitor
Hilton all across the globe.
The shareholders of the Starwood hotels and resorts would be provided with the acquisition
remuneration both in the form of cash and shares. The customers of the newly formed
entity would be benefitted by holding both the Starwood preferred guest and the Marriott
rewards card. Also, the members would be provided with the option of switching the
reward points between both the service providers.
The various methods by which the mergers and acquisitions have an influence on the
hospitability business are as follows:
ECONOMIES OF SCALE
Integration facilitates the business organizations in achieving the economies of scale as they
can offer the products and services at an economical rate. The undertaking of the
production activities at large scale helps in ensuring economies of scale (Neirotti et al.,
2016). The various methods of achieving the same are low production costs, discounts on
bulk purchasing and others.
SMALL NUMBER OF LARGE ORGANIZATIONS
The economic crisis across the globe is leading to a reduction in the number of large
competitors within the industry. The conservative bureaucratic procedures are expected to
hinder the entry of new organizations within the industry and also an expansion of smaller
companies to be able to compete with the larger business organizations (Wu et al., 2018).
There are only certain big brands which are being trusted owing to the shift of the trend of
mass travelling to solo travelling. The growth strategies of these organizations depend on
the increased amount of franchise options, mergers and acquisitions.
CONTROL OF SUBSECTORS
The organizations can have strong control over all the components within the supply chain
by ensuring vertical integration and collaborating with the suppliers. By acquiring new
business, the organizations can gain access to new markets and can also attract new

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customers for the services provided (Kizildag, 2015). Exercising control over the integrated
market helps in increasing the overall competitiveness.
INCREASED MARKET SHARE
By integrating the business operations, the new organization is benefitted in terms of a
larger amount of resources and larger geographic presence. This helps the organizations in
achieving higher market share within the tourism industry (Loertscher and Riordan, 2019).
REDUCED NUMBER OF INDEPENDENT BUSINESSES
The smaller organizations have been reduced as a result of the merger and acquisition
activities. This means that large organizations are acquiring smaller businesses and gaining a
dominant position within the market. Fewer large organizations are competing within the
industry (Wu et al., 2018). Also, the smaller businesses have been reduced as a result of the
liberal franchise procedures and increased globalization of services.
BETTER QUALITY
The overall quality of the products and services is enhanced as a result of the integration of
businesses, which is leading to increased adoption of shared resources such as materials,
technology and others. Horizontal integration would be highly helpful for business
organizations in increasing the efficiency of the services within the hospitality industry (Hon
et al., 2016).
STANDARDIZATION
Integration is highly useful for the business organizations in evolving to multi-activity and
complex resorts, which would be capable of providing the traditional services of hospitality
industry along with the various leisure and sports activities (Wu et al., 2018).
GREEN POLICIES
The major issue which is being faced by the companies during integration is meeting the
environmental standards. Different countries have established their own business
standards, which makes it difficult for business organizations to perform business activities
(Kizildag, 2015).

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CONCLUSION
Through this management report, it can be concluded that the integration has facilitated
the growth and expansion of the organizations operating within the hospitability industry.
However, the organizations must focus on understanding all the implications of entering
into the horizontal and vertical integration and its implications on the profitability before
taking the decision.