Analysis of Hospitality Integration in the Travel and Tourism Industry

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Hospitality Provision in Travel & Tourism
Sector
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Table of Contents
Introduction.................................................................................................................................................3
Task 1..........................................................................................................................................................4
1.1 Explain the role of the Hospitality industry within the travel and tourism sector. Discuss the
interrelationships between hospitality and wider travel and tourism business.........................................4
Task 2..........................................................................................................................................................8
2.1 Analyse the implications of integration to the hospitality industry....................................................8
2.2 Discuss how integration has affected a hospitality business............................................................12
Task 3........................................................................................................................................................14
Presentation...........................................................................................................................................14
3.1 Develop a Rationale for a selected project clearly justifying decisions linked to the target market. 15
3.2 Develop a plan for the hospitality business including operational requirements of the business,
organizational structure in relation to human resource allocation..........................................................19
Conclusion.................................................................................................................................................29
References.................................................................................................................................................30
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Introduction
Hospitality is a commonly used title for diverse segments of the hotel and food preparation
businesses and can be explored to cover all the goods and a service offered to the consumer away
from residence comprising the accommodation, gaming, eating, amusements, and environment
and also includes travel. The hospitality industry is categorized into two types the Tourism and
Hospitality. The hospitality industry is a huge industry. It is the rapidly growing area in the
economic. It is very essential to work together in order to guarantee success and satisfy their
customers. It has been observed that the travel and tourism business when works together with
good quality and repudiated hospitality industry makes an excellent combination for business
and creates a more successful business than other industries. Hospitality and tourism are
dissimilar but ingrates each other. Hospitality Industry gained more significance in managing the
public who travel for business or entertainment purpose from one place to another. These
industries generally focus on the client's satisfaction and also include numerous activities like
boarding, transportation, etc. The present learning deals with the relationship between
hospitality and tourism business. In the next part impacts of integration with the hospitality
industry are being discussed. And the last part will build up a plan of hospitality business based
project.
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Task 1
1.1 Explain the role of the Hospitality industry within the travel and tourism sector.
Discuss the interrelationships between hospitality and wider travel and tourism business.
Role of Hospitality industry in tourism sector & Interrelationships between hospitality and
tourism business.
Date: - 16 April 2016
Tourism is referred to as a tour by an individual for entertainment, leisure or commercial
purposes for a specific time period. Nowadays the travel and tourism sector is gaining a lot of
significance in providing satisfaction to the clients. The tourists after exploring the market they
select destinations according to their interest in spending their leisure time.
Due to the rise in globalization, the hospitality business has emerged itself to one of the majorly
developing industry when evaluated from other industries. 33% of total GDP to the economy is
contributed by the Travel and Tourism Industry. Approximately 4.5% development has drawn
from the 1990s to late 2000. Nowadays various organizations are providing travel and tourism
services and also providing hospitality services to travellers. The trip advisory is one of these; it
is a website it works as inviting peoples to share their experiences about the places they visited.
So this sets the standards and gives information about places across the world which is based on
personal knowledge and idea of the travellers.
The hospitality industry includes accommodation services, hotel businesses, cafes, restaurants,
catering, etc. the main requirement of the visitor on reaching destination is to search for
accommodation. That can be provided by hotels, guesthouses. The hotel staffs are responsible for
providing quality service and taking care of a tourist. Accommodation type will be according to
the package chosen by tourists. The quality of service varies across the globe (Conrady &
Buck,2007).
Restaurants: Restaurants are the places for tourists to eat and drink according to their choice.
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Every restaurant has different menus, ambiance, services, etc. The choice of restaurants is made
according to the recommendation by other tourists or by the employees of the place of
accommodation. Chain restaurants supply a sense of financial security to tourists.
(Picture: Image depicting Hospitality Industry Employees)
(Source: All Business Ideas, 2019)
Catering Providers: Catering is the basic and fundamental need in the tourism and hospitality
industry. it can be found from hotels to boats, airlines, trains, etc.
Theatres, & Shopping Complexes going to movies is incomplete without having a snack. The
big shopping complexes have their own theatres in the house. Just next right to cinema entrances
cafes establishments is found from café to fine dining. There are many services such as disco,
dinner, parties, etc. are provided at a genuine price which helps in attracting clients and also they
please their customers to come again. PKF Hotel experts analysed that this industry also offering
affordable travel packages according to the customers’ budget. The hotel industry and the travel
industry both are interlinked with each other. Let us take an example, suppose a group wants to
have a visit at some geographical areas for this they will contact some specific tour and travel
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company of countries organization which gives them the best package with all facilities like
accommodation quality services (Longhi, 2017)
According to the survey by PKF Hotel experts, hotel provides accommodation and food. So the
tour cannot be completed without a hotel and hence we can conclude the connection between the
hotel and travel industry. in the TUI Travel PIc is the leading association. It was established in
September 2007 by the tourism division of TUI AG. It is Headquartered in Crawley, West
Sussex, UK. TUI association is leading with 6 airlines 3000 Restaurants, 1,800 online portals and
travel agencies and majorly destination across the world. This company is a public limited
company having 76,000 personnel working across 180 countries. Around 30 Million customers
already taken its services, TUI served with quality services at a modest budget. In 2008, Airline
companies merged with TUI and the new business is taken out to enhance Airline services. This
joint venture is also carried out with the hospitality company. TUI offers a number of offers and
services like travel packages, food, accommodation, transport that helps in attracting customers
which further helped in increasing the growth of an organization. Intercontinental hotel group
(IHG) is the major accommodation service provider group in the UK. IHG relates to the
hospitality industry in providing a number of services to customers like food and beverages,
night clubs, accommodation, etc. Quality food and catering facility tenders are taken by IHG
providers to the customers. IHG runs its business more than 80 countries with around 4,600
hotels in which 700 hotels are managed through IHG itself and rest are owned by franchisees.
IHG fulfils demands at affordable prices.
The mentioned associations are interrelated in services IHG provides a good quality environment
to customers so they feel like their home and desire to visit again. This organization provides
budgetary services to the customers to suit their fiscal and motivate them to come again. PKF
Hotel experts categorize the service according to their client’s budget like 3 stars, 5 stars, 7 star
Inns according to the suitability of customers. The major flaw in the business is acquiring the
satisfaction of clients by providing them quality services. Association is interested in attaining
the objectives by satisfying the requirements of the customers (Mowforth & Munt, 2015).
Both the above-stated businesses are related to each other in terms of their services. They both
consist of a similar consumer base which is dependent on the facilities of both the groups. The
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TUI group designs the plan by considering IHG services whereas, IHG is dependent on the
customers of the TUI group. Both the groups have Robust connection in the terms of services.
The business will not be capable of fulfilling the demands of the consumers in the nonexistence
of another business. IHG and TUI organizations have to design a contract to which they have to
mix up their resources in order to provide quality services to their customers. The merger helps
these groups to increase profits and generate a strong customer foundation. TUI offers to pre-
book in transportation facilities as well as in hotels to their clients. On the contrary, IHG offers
food, accommodation, beverages, and quality services to their clients, when both the business
comes together and merges their services the clients will fell extreme enthusiastic to come back
because of the quality services provided by them.
From this study, it can be determined that both the groups are interdependent on their facility and
they should merge their services to fulfil the demands of their customers. This is the relationship
between both the Hospitality and Tourism industry because no one can run the business
efficiently without each other.
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Task 2
Introduction: - Integration refers to the method of joining dissimilar parts to make a complete
thing. When these parts are joined from one another they become more effective and efficient.
The integration process is adopted by companies to explore its operations, market shares and
become more efficient. Integration assists an association to work collectively by sharing their
resources and clients.
2.1 Analyse the implications of integration to the hospitality industry.
The hospitality industry supervises the integration of resources with vertical and horizontal and
integration its impact has been seen in the hospitality industry like organizations are quicker to
improve their business and give pleasure to their customers. They are making their universal
objectives. Most recent tools and technologies are utilized for appropriate coordination
(Mohammed, et. al., 2015).
TUI group is also united with multiple airline organizations, hotels. It personalizes the
architecture of TUI to unite current resources. It would affect business exploration and efficient
consumption of current resources. TUI group is integrated with other groups in two ways:
Vertical Integration: When an association purchases its supplier in the distribution chain, it is
referred to as Vertical Integration. These results in dropping the operating cost and thus make the
most of the profit. For example: Suppose a steel manufacturing company in the US, having full
power over the delivery chain thus, the steel company puts a financial system of scale at the
crown of its program and alert training people within employing rather than outsiders. In this
procedure, the TUI group comes into with an agreement with another group that appears in the
distribution chain. From this, they together get competitive advantages. Integration facilitates
TUI to discriminate its services from challengers. Accurate integration could result in developing
market shares and productivity. Vertical Integration also decreases the value of activities that are
required to be performed by TUI (Longhi, 2017). It also improves the quality of services
afterward Vertical Integration.
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TUI management is important to manage and examine activities and scheduling of services. As
reported by the market research, Vertical Integration is responsible for entering the TUI in a new
market segment. Proper control of functions is the only decision to create successful integration.
Horizontal Integration: when an association, from two various industries, unites together to
form a new organization is referred to as horizontal integration. This outcome in exploring the
customer foundation, profiting the economies of range and make the most of the profits. The
main objective is to boosts productivity and achieves competitive advantage. TUI is
concentrating on the worldwide expansion of their field. For this logic, Horizontal Integration is
finest to improve capacity and resources. There are various outcomes found through horizontal
integration like effectiveness in work at different places is improved. But in the case of TUI, this
integration is establishing brand name and picture across various countries. Due to globalization,
Horizontal Integration would produce more profits as International Tourism fetch more earnings.
Further, it is also observed that integration also combat the interest of the organization. As every
organization has their individual vision and mission thus the conflicts may occur during decision
making (Ivanov, et. al., 2015). Integration procedure has some advantages such as:
At the initial stage of examination, Integration solves and recognizes all the problems. Because
of the ownership of the hotel sequence the transportation charge and other traveling expenditures
can be reduced to a huge limit. A proper IT system makes it accessible all the crucial information
to the department at only one click. Integration saves the managing cost of an explorer and each
and every service required by him is accessible at one place. Vertical Integration helps in
managing a variety of tasks as one of the branches of an organization is trading with another
branch of an organization, thus all the expenditure regarding managing and transferring charges
can be saved.
Some of the implications in the hospitality industry include:
To raise and succeed in any industry appropriately, it is significant to that the entire services
supplied by the industry should be alike in all the parameters and also all the regions where this
industry opens its branches. For exemplary premier Inn are established their hotels in different
nations and also provides the same services in all the branches so this does not lead to raise its
bad status and also satisfy their customers (Haven‐Tang & Jones,2012).
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Due to the uniting of great organizations, this leads to removal of small organizations like Accor
Hotels from the market removing all the staff of smaller organization jobless leaving bad
outcome on the economy. Differences may arise among the united organizations because they
both encompass different vision and mission and diverse scheduling to chase their mission and
complete their vision.
The integration offers a competitive advantage. Uniting the core competencies of two superior
companies like Intercontinental Hotel Groups & Marriot International, will help in attracting
and satisfying more clients. A monopoly can be developed by supplying the finest which is not
simply obtainable, by doing this the firm will acquire more prevailing character in the market.
This also leads to reducing the number of choices for clients. Economies of scale can be attained
by integration is the most specific required impact of integration (Waligo, et. al., 2013).
The chief advantage of Integration is when two participants unite with each other and comprise
lots of profit and benefits to all as consumers will be more contented. By integration, in the
market, the monopoly situation will be developed which means a decrease in the number of
players in the market. Integration benefits or economy in such a mode, that the operating cost
manages the branch individually will be decreased and maximizes the revenues. Integration
helps in reducing costs and expenditure and helps in increasing revenues and incomes. The
customer foundation can be improved by exploring the business and supplying the facilities in
other countries also. Rewards and incentives owed to personnel can enhance extra expenditure.
Strategies will be made according to their needs. The integration process can be more proper by
set up the planning and authority as well as responsibility connection within an association. The
property must be adequately utilized to increase the presentation of organization. This process
requires innovative ideas (Hingley, et. al., 2017).
The integration process answers all the problems associated with business administration at the
initial phase of spending the funds. Appropriate training and growth of human resources could be
handled properly. This method has different benefits includes maintaining dynamic structure and
reducing costs in an organization that is ready to change also be called as flexibility. Information
technology can also help an organization to offer with productive knowledge required by the
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supervisors. The company's website displays all the required important information so the
retailers, distributors, clients may know the beneficial situation.
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2.2 Discuss how integration has affected a hospitality business
Integration also aids in achieving the existing arrangement of the association. Integration
supplies nearly all of the needs of the business in the associations. There are a variety of impacts
of integration contains:
Scale economy- As a result of integration operating costs of Heineken and Whitbread is
decreased to a certain level. It can also be further said that a travel organization acquires any
hotel, the basic investment would be huge.
Quality- Integration mechanism does not promise worth growth it is completely reliant on the
feature involved. Sometimes the human resources do not examine the way trailed by new
executives as they feel that the new procedure is not adequate (Boz, 2016). Management
maintains contact with clients in order to know their accurate demands. It has been examined in
Marston’s Plc. that human resources are not capable of adopting new approaches that creates
disappointment in-between the staff and further operational difficulties. When the workforce
does not understand the working style of other organization then outcomes is improper and
uneven communication (Madera, et. al., 2017). These all such things poorer down the quality
standard offered by the organization after Integration.
Standardization- it is a very huge and very complex technique as the fundamentals would be
simple but the participation of human resources made it complicated. An organization requires
being more proficient, hardworking, disciplined to preserve a balanced level in the purpose of
standardization (Ateljevic, et. al., 2017).
Cost integration- Vertical and Horizontal Integration agree Greene King to spend a huge
volume of capital for their business. It explores the investment of technology to offer quality
service. An organization jointly setting the value of packages chiefly includes holiday packages.
It is cleared that the hospitality business is influenced by cost integration.
Lack of knowledge- TUI group is integrated horizontally and vertically after integration. TUI
penetrated into a new market so many transformations have been taken place as the expansion of
new market approaches. The workers of TUI were facing trouble in managing new customers.
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