Hospitality Provision in the Travel and Tourism Sector: A Report

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HOSPITALITY PROVISION IN THE
TRAVEL AND TOURISM SECTOR
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Contents
INTRODUCTION...........................................................................................................................................3
LO1..............................................................................................................................................................4
INTERRELATIONSHIPS BETWEEN HOSPITALITY AND WIDER TRAVEL AND TOURISM BUSINESSES..........4
IMPACT AND IMPLICATIONS OF INTEGRATION WITHIN HOSPITALITY INDUSTRY...................................9
ASSESSMENT OF THE IMPACT OF INCREASING INTEGRATION ON THE INDUSTRY................................12
CONCLUSION.............................................................................................................................................14
REFERENCE................................................................................................................................................14
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INTRODUCTION
The hospitality industry is a part of the service industry which includes hotels, sporting events,
restaurants, cafe, canteen, cruises and other. Hospitality industry directly generates revenue for
the home country's economy when tourists spend money in hotels, restaurants or in other
businesses. On the other hand, this industry generates revenue indirectly when these tourists
purchase goods from the retail sector such as locally made crafts, items, pharmacy products,
etc. The spending of the customer depends on the disposable income of customers and leisure
time and their interest (Pirani and Arafat, 2016). The major five sectors included in the
hospitality industry are lodging-accommodation, food and beverages, travel and tourism, the
entertainment industry and timeshare. Tour and travel industry is related to the deliver the
good experience to the guest. This industry comprises of tourism products, tour operators,
marketing organizations for destination places, travel agents, etc. The components of a tour
and travel industry are accommodation, attractions, transport, tour operators and agents,
tourism promotions and development and many more (Bruni et al., 2017).
Stratford is a small district located in the East End of London. The record of Stratford came in
1067. The Stratford was known as Stratford and its meaning was a ford on the Roman Road.
The Stratford is known for its Olympic park and shopping center. There are several other things
in Stratford such as Stratford’s Church, Joseph Balzalgette’s Abbey Mills Pumping Station, The
London Stadium, Queen Elizabeth Park, and many more (Oakley, 2014). The rental properties of
the Stratford include transport, restaurants such as The Real Greek, The Last Drop, The
Westbridge Hotel, etc.
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Figure 1: Stratford district
LO1
INTERRELATIONSHIPS BETWEEN HOSPITALITY AND WIDER TRAVEL AND
TOURISM BUSINESSES
Tour and travel industry is a large part of the hospitality industry. The main aim of these
industries is to provide all the essential foods and services to travelers. Tour and travel industry
is the fastest and largest industry in the world because the majority of the people are part of
this industry. The components of the tour and travel industry include recreation, adventure,
events, food and beverages, conferences and many more. The growth of this industry is due to
the increasing awareness of the concept of globalization. Customers of this industry can be
businessman, entrepreneurs, family, individual, professional, rich people and so on. The growth
of both industries is dependent on each other. Both these industries are included in the service
industry and the service industry is considered different from the tangible goods, therefore, the
promotion strategy or the customer expects more physical evidence to support the services of
the hotel. But the companies can choose to use the differentiation strategy or product
customization according to the needs of the customers so that they remain loyal to the hotel
and did not wish to switch over other company or hotel. To understand the interrelationship
between hospitality and tour and travel industry, it is necessary to understand the concept of
hospitality and travel industry.
Hospitality industry
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The hospitality industry is an industry in which customer satisfaction is the area of the focus.
Even the success of every business depends on customer satisfaction but in the hospitality
industry, the primary objective of the businesses is to meet the expectations of the customers.
The hospitality industry is divided into several categories such as lodging, accommodation,
travel, hotels, restaurants, event planning and many others. In the UK, the hospitality industry
is considered as the multibillion-dollar industry because the income of this industry depends on
the traveler's interest and their leisure time. Consumer disposable income also plays a
significant role in the growth of the industry. The businesses include in the hospitality industry
are bars, clubs, hotels, restaurants, canteen, cafe, clubs, events, membership and many others
(Lopes, 2016).
Travel and tourism industry
Travel and tourism industry is a part of the hospitality industry. This industry includes several
businesses and the main aim of this industry is to provide desired services to the tourist and
travelers. It is considered as the largest and fastest growing industry of the world because every
person throughout the worldwide contributes to the growth of this industry. Travel and tourism
services include the activities in which the traveler engage in traveling from the current location
to the destination for leisure or recreational activities. The hospitality industry provides support
to the travel and tourism industry. The services include in this industry are the services of tour
agents and operators, visitors attraction, passengers transport, travel services and many more.
The main objective of this industry is to attract as many people as possible for increasing the
revenue of the industry (Dodaro et al., 2015).
The interrelationship between hospitality and travel and tourism industry
The hospitality and travel and tourism industry can be separated as they are interrelated with
each other. Tourism includes the activities in which the travelers desire to engage in activities
for their recreation and for filling fun in their leisure activities and even they look for the food
and beverages. The hospitality industry provides a safe and secure environment for travelers.
The business of the hospitality industry is highly regulated by the Food Hygiene, Health, and
Safety Act. The other interrelationship can be seen as a link of the customers. The aim of both
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industries is to satisfy customers. The business of the travel industry depends on the customers
and their orders and the satisfaction they derive from the services (Battour et al., 2017). The
businesses provide excellent and accurate services to the customers so that they feel worth
spending the money. The company that successfully owned in England is based on this concept
and the owner puts the same strategy while opening a hotel in the Stratford.
Figure 2: Interrelationship between Hospitality and travel and tourism industry
[Source: Pairach, 2019]
For instance, suppose a group of friends went to Stratford for attending the Olympic at the
Olympic Park in Stratford, they need the means of transportation such as train, bus, car or
public transport to travel from the current location to the destination place. These services are
included in the travel and tourism industry. Further, when they reach the destination place they
need the hotel or restaurants for taking rest and for food and beverages. The business of the
hotels and restaurants is included in the hospitality services. Therefore the owner of the hotel
must analyze the tour and travel industry before opening the third hotel in Stratford (Bilgihan et
al., 2016).
Stratford is known for its tourist’s places such as Olympic Park, The London Stadium, Queen
Elizabeth Park, and many more. The idea for opening the third hotel in the Stratford is a good
strategy for expanding their business. Travelers across the world come to visit these places.
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After visiting these places tourists search for the rooms in the hotels for rest. The guests expect
excellent services from the hotels so that they become refreshed for the next day. The hotels
must include several activities such as restaurants, motels, camping parks, lodges, café, outside
catering, etc. Along with these facilities, the second component which the owner of the hotel
should consider in their hotel is communication (Yüksel, 2017). Communication is the process
when two or more individuals communicate with each other. Communication plays a significant
role in the success of the hospitality industry. The consumer can book the services of the hotel
if the communication and services provided by the hotel are of high quality. The owner of the
hotel can organize various seminars or orientation programs to provide proper training to the
employees for improving their communication skills and other skills required in the hospitality
industry.
The bond between the host and their guest is considered as hospitality. The hospitality industry
continuously supports the travel and tourism industry. The experience of the customers
becomes delightful when they get excellent services in the hospitality industry. For customer
satisfaction, they look for quality services in both industries. The staff members of the hotel
must properly treat the employees to get their satisfaction and loyalty. The owner of the hotel
can also go for collaboration to offer better deals to its loyal customers (Su et al., 2016).
Travel and tourism industry requires the help of food and beverages and this is a part of the
hospitality industry. The hospitality industry provides the services of hotels, restaurants, café,
and canteen and may more. The example of the same can be seen by taking the example of the
Holiday Inn in the Stratford. The Holiday Inn also offers facilities of recreational activities such
as cinema, spa, cruises, etc. that supports the travel and tourism industry. Holiday Inn and tour
and tourism industry both are related in providing satisfaction to the customers. If the services
of the tour and travel industry are not satisfactory it will affect the business of the Holiday Inn.
For instance, if the tourist is unsatisfied with the travel operators, the travel agent does not
make the proper planning for visiting proper places or he misses some of the important places
of the tourist destination. A dissatisfied customer will never come to visit the same place again
and even he will not recommend it to others. This will directly affect the business of the Holiday
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Inn. Both the industries will need to support each other to make it profitable (Han and Hyun,
2015).
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IMPACT AND IMPLICATIONS OF INTEGRATION WITHIN HOSPITALITY
INDUSTRY
Integration can be defined as a combination of two businesses as a whole unit. In the
hospitality industry, a tourist has to go different steps and individuals to plan and book for trips.
To sort this problem business decides to combine with other businesses to solve the problem
and also to decrease the competition in the industry. Integration is an economic concept
because it is a connection between different departments or organizations. It can also be
defined as a combination of department or organization for increased productivity and to
decrease the cost of operations (Leung and Baloglu, 2015). The hospitality industry can even
integrate with the travel and tourism industry to make the operations more profitable and
attractive. The customers prefer to do business with the companies that provide more services
at the same place and at the same time.
The process of integration can be divided into three levels:
Principal
Wholesale division
Retailer
(And then final consumers)
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Figure 3: Process of integration
[Source: Travel and tourism industry, 2019]
Integration can be categorized into two categories:
Horizontal integration
Horizontal integration means the combination of the different department at the same level for
instance, the owner of the small hotel owns the number of brands in the hotel. If the owner
purchases or acquires another hotel then it is known as horizontal integration. The company
can expand its business through horizontal integration (Han et al., 2016).
Vertical integration
Vertical integration is done when one company acquires the business of the different area. In
other words, the company purchases another similar organization for providing extra services
to their customers (Argyres and Mostafa, 2016). For instance, if the owner of the hotel buys any
travel and tourism company or make the contract to provide additional offers to the customers
then it is known as vertical integration. Vertical integration can be categorized into two
categories:
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o Forward integration: It has occurred when the hospitality business purchases
companies at the retail levels.
o Backward integration: Backward integration occurs when the company purchases the
companies those supplies to the hospitality industry such as hospitality industry
acquiring tour operator, event Management Company and many others.
Impact and implications of integration in the hospitality industry
The major impact and implication of integration in the hospitality industry are as follows:
As the hotel company follows the concept of integration for expanding its business but it must
ensure that they must provide the same services at all three hotels. It is essential to provide
quality services in all the hotels because anything less than the expectations will not be
accepted and it can also damage the reputation of the hotel. For instance, the company
purchases the hotel in Stratford and the surrounding areas (Leung and Baloglu, 2015). The
company already has its operation in England. It is very important for the owner of the hotel to
provide the same services in every hotel. Through this differentiation strategy, the company can
gain the value and brand name so that the hotel can make sure that their guest feels the same
services and experience in every hotel.
When the company starts its operation in Stratford, it can have a negative impact on the society
i.e. the company already has two hotels and they know the nature and behavior of the
consumers visit England. This expertise can help the owner in successfully expanding its
business. It may have a negative impact on the owners of small hotels. This may result in
throwing out many people unemployed. Integration can also bring conflicts due to a
disagreement between the interest or methods of operation. For instance, the hotel operated
in England may not attract the travelers but it is suited for the business class people. Due to the
difference in the behavior and the purpose of visiting England, it can bring conflict as a result.
The hotel should make changes in its operation so that they satisfied their target customers
(Shams et al., 2018).
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In addition this, globalization also contributes to having an impact on the hospitality industry.
As many countries liberalize the rules of entering the hospitality industry, it becomes the most
attractive industry in terms of generating revenue. The concept of globalization has encouraged
in expanding its business throughout the world. This concept again has a negative impact on
the local business.
ASSESSMENT OF THE IMPACT OF INCREASING INTEGRATION ON THE
INDUSTRY
Integration has both positive and negative impact on the hospitality industry. The most
important positive advantage of the integration is to gain competitive advantage. With the help
of the integration, the company can adopt the differentiation strategy of both department and
company to gain a competitive advantage over its competitors. This competitive advantage will
help the company to attract more customers and in increasing their customer base and even
integration helps in building loyalty among the customers (El-Halwagi, 2017). Apart from the
competitive advantage, the positive and negative impact of the integration in the hospitality
industry are as follows:
The positive impact of increasing integration on the industry
 Standardization
Integration helps in bringing standardization in the products and services. With the help of
integration, the business ensures to have similar operations. With the help of the integration,
the companies can confirm to provide the same experience to the guest whenever they visit
any of the hotels of the company. Standardization ensures quality services to its customers and
also facilitates the company to maintain brand image and they make equal efforts to make the
customers satisfied (Gustavsson et al., 2017).
 Brings economies of scale
Integration helps in bringing economies of scale due to similar operations and as a result, it
increases the profitability and market share of the hotel. The company has the option to
increase the customer base by adding new services or facilities in all the businesses.
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