Hospitality & Tourism: Integration Impact & Business Development Plan

This report provides a comprehensive analysis of hospitality within the travel and tourism sector. It explores the interrelationships between hospitality and broader travel and tourism businesses, highlighting the significance of customer delight, business growth, service provision, employment generation, enriching customer experiences, and cultural representation. The report further examines the impact of integration within the hospitality industry, discussing implications such as reduced competition, leveraged core competencies, greater price control, and economies of scale, using the Marriott-Starwood merger as a key example. Additionally, the report includes a rationale and plan for a selected hospitality business project, justifying decisions based on target market analysis and outlining operational requirements, including organizational structure and human resource allocation. The document is contributed by a student and available on Desklib, a platform offering various study tools and resources.

Hospitality Provision in Travel and Tourism
4/28/2018

Table of Contents
Introduction...........................................................................................................................................3
Task 1....................................................................................................................................................4
LO1 Understand the role of the hospitality industry within the travel and tourism sector.................4
1.1 Discuss the interrelationships between hospitality and wider travel and tourism businesses...4
Task 2..................................................................................................................................................10
LO2 Understand the impact of integration within the hospitality industry......................................10
2.1 Analyse the implications of integration to the hospitality industry........................................10
2.2 A Discussion of how integration has affected the hospitality business..................................13
Task 3..................................................................................................................................................14
3.1 Develop a rationale for a selected project clearly justifying decisions linked to target market.
.....................................................................................................................................................14
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.................................16
Conclusion...........................................................................................................................................18
References...........................................................................................................................................19
2

Introduction
Travel and tourism is one of the world’s largest service industries. Tourism is one of the most
profitable industries. Travel and tourism sector over the years has given a big boost to the
global economy. Many countries are significantly dependent on the revenues from the
tourism industry as it also a source of foreign exchange income.
As a result, it helps in growth of different sectors of the economy, travel and tourism industry
helps to expand a business and reduces unemployment. Tourism industry is the source of
income for public as well as private sector.
Tourism industry gives a chance to a nation to display its special and unique character like its
culture, delicacies, nature, monuments, wild life, flora and fauna etc. Accordingly, people
start relating nation to its specific and unique characteristic, which gives the nation a unique
image (Weston, 2015).
(Source: https://career.webindia123.com/career/options/travel_tourism/travel_tourism/
intro.htm)
3

Task 1
LO1 Understand the role of the hospitality industry within the travel and tourism sector
1.1 Discuss the interrelationships between hospitality and wider travel and tourism
businesses
As discussed tourism and travel is one of the fast-growing industries, the hospitality in travel
and tourism industry operates in a highly competitive environment. It has a scope for those
who choose travel as a career option. Different kinds of programs are designed for travel and
tourism industry, so many choices are available for travel as career path (Webindia123,
2018).
M2. Hospitality industry as a result has an impact on the growing economy, every individual
feels like having vacation and enjoying their part of life in travelling and exploring things
around, hospitality industry always concentrates on the service provided to their customers. It
helps to build a brand image and satisfy the customer.
(Source: http://www.franchisezing.com/franchise/become-a-part-of-our-success-story-anuj-
gupta-my-travel-diary/)
Role of the Hospitality Industry within the Travel and Tourism Sector
4

D1. Hospitality and travel &tourism industry are linked with each other. Different services
from travel and tourism industries such transportation, luxurious rooms and recreation.
Hospitality forms a portion of the total of travel and tourism business. It enhances the quality
of services on the part of customer expectation and satisfaction, as a result the hospitality
industry plays a major role in the tour and travel industry below-mentioned is the features
that highlight the significance of hospitality industry (Weston, 2015).
1. Customer Delight:
Hospitality industry’s main objective is customer satisfaction as a result if the
customers are happy and satisfied there will be a growth in the travel and tourism
industry and as a result in the economy.
2. Rise in Business:
As discussed, many people across the globe like to travel and visit new places,
visiting new places gives them a break and as result on an average a family or a
working individual travels once in a year to any country or a place. As result some
people travel from work break, some travel with family, some travel because
travelling for them is a hobby. The hospitality provided to the people like the quality
of the food, amenities in the hotel etc where the customer is satisfied thus there is
increase in sale.
3. Service Provider:
Hospitality industry is a service provider, which as a result means it provides different
kind of services to the customers. The service may be a travel service, transport
service, accommodation service, food and beverage services and entertainment
services, thus hospitality is an intangible service which cannot be felt.
4. Employment Generation:
As discussed, that tourism and travel is one of the booming industry, and as a result in
gives plenty employment opportunities to the people who want to seek their career in
travel and tourism. Here many people are attracted towards the travel industry to
choose one of the option to enhance the career, there are different option which
nowadays help a person to grow here.
In the recent years there were many people who were employed in this industry and
many of them are very happy continuing in this area or field of tourism industry.
5. Enriching Experience to the Customer
5

Hospitality services leads to enriched customer experience, as a result the customer is
delighted and spreads the goodwill of such experience so other set of possible
customers, thereby increasing future sales and growth.
6. Hospitality gives a Flavour of the Cultural and Regional Characteristics
Every region has its unique characteristics in the form of its culture, language, food,
costumes, rituals etc, here hospitality plays a role of displaying such characteristic to a
tourist who shall experience different flavours of a country or a region (Kale, 2016).
Inter Relation between Hospitality and Wider Travel and Tourism Sector
1. Travel Packages:
M2. Travel agencies provide different kind of travel packages to the tourist, the
customers will relate and compare different packages and choose whatever best
package suits them to explore the place, many of the agencies provide different kind
of scheme to attract the tourist which help them maintain the brand name and to
increase the sale of that particular agency.
(Source: http://clipartstation.com/weltreise-clipart-8/)
2. Recreation Facilities:
People who are tied up with the busy schedules and hectic lifestyle prefer to take
some time off and visit certain exotic locations which enable them to spend some
quality time and recreate.
Hospitality acts a major boost to this kind of travel and tourism business which makes
the stay pleasant and memorable.
6

D1. Various facilities are available in hotels like Spa, indoor and outdoor sport
activities, swimming pool and restaurants to enhance the service quality as a complete
recreation package.
(Source: https://ms3304eurasia.wordpress.com/2014/11/28/advantages-and-
disadvantage-of-gaming-entertainment-in-hospitality-industry/)
3. Accommodation
Accommodation here plays a major role in tourism industry for a tourist, when a
tourist comes to any kind of hotel like a 3Star,4-star, 5 stars or a 7star he will feel to
have best service, the best of accommodation in that particular hotel. The type of the
hotel and services like the food, beverages served the room services.
D1. Different hotels have different type of services and accommodation in term of
hospitality given to the tourist; some hotels have resorts for relaxing, while some have
different amenities like indoor or outdoor activities. As a result, the accommodation is
one of the hospitality which travel and tourism industry should always take care of.
(Source: http://www.ehl.edu/en/about-hospitality-sector/the-many-benefits-of-
hospitality-management-careers)
4. Food and Beverages
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Food and Beverage also one of the major characteristic hospitality in travel industry,
as a result when a tourist comes down for a holiday in a country or any place food is a
major thing where an individual concentrate on. Food is a thing which keeps you
happy and also satisfies when you are away from your own country. Many hotels/
restaurants have the own kind of service which helps them to have a different
speciality of food, the service like ambience, food, music etc.
Beverages which may include the liquor, wine etc. Many tourists come down to enjoy
the night life, clubbing and also enjoy going to any kind of bar. As a result, this is one
of kind of hospitality in travel industry.
(Source: https://www.123rf.com/photo_55565929_catering-service-restaurant-
waitress-girl-with-food-tray-at-event-natural-authentic-shot-in-challeng.html)
5. Entertainment:
Entertainment is one of the key component in travel industry, many of the tourist
come down to visit places so as to visit the places historical beauties, museums,
monuments, water parks, garden, adventuring etc. The entertainment hospitality may
include trekking, water sports, historic monuments, wildlife visit.
As a result, his is also one of the major characteristic in hospitality industry towards
tourism and travel (BC Campus, 2018).
8

(Source: https://economictimes.indiatimes.com/industry/services/travel/adventure-
tourism-business-booms-in-india-but-many-pitfalls-need-to-be-addressed/
articleshow/32503709.cms)
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Task 2
LO2 Understand the impact of integration within the hospitality industry
2.1 Analyse the implications of integration to the hospitality industry.
The organisation has a primary goal to increase its revenue base and market share. This can
be possible in primarily two ways:
1. Organic growth: This growth refers to the inherent core competences of an
organisation to chart a growth for themselves without the help of any help of external
factors like acquisitions
2. Inorganic growth: This is exactly opposite to organic growth, which as a matter of
fact refers to growth in the company’s business through in organic means like mergers
and acquisitions via integration. This is the fastest and the crudest ways of growth by
any organisation.
M2. Integration refers to two or more companies coming together to leverage their core
competencies to enable for themselves a significantly competitive position in the market.
This can happen either through mergers or acquisition; this is one of the fastest ways of
business growth and better market share.
Merger and acquisition play a significant role in the hospitality industry which as a result
allows the firm to grow rapidly, as a result merger and acquisition helps in hospitality
industry to increase revenue, enhance opportunities (Rouse & Frame, 2009).
(Source: http://en.apollocapital.pl/mergers-and-acquisitions/)
M1. Integration is a subject where many companies are using it since years, as a result there
are two different types of integration
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1. Horizontal integration:
Horizontal integration means combination of two business, companies, organisation
in the same line of business or same supply chain management. For example, any kind
of airline industry acquiring any chain or line of hotels is an example of horizontal
integration.
2. Vertical Integration
Vertical integration is means combination of two different businesses in different
industry. Vertical integration basically focuses on the integration and sufficiency of a
company (Linton, 2017).
M1. The Implications of Integration to the Hospitality Industry
1. Reduced Competition:
There always a competitive advantage for a merging company with a best brand in the
hospitality industry, as a result Marriot has acquired the market since 1927 and
Marriot has been No.1 in hospitality industry.
As a result, in the mid- 2016 Marriot purchased Starwood $12.2 billion which in
undoubtedly will be one of the world’s biggest hotels. The competitive advantage of
being in market is the reduced competition and generating a competitive advantage in
the market.
2. Core Competencies Leveraged:
When two brands come together as a result when Starwood was merged with Marriot
both the hotels had their own individual competitive advantage and core strengths.
When both Starwood and Marriot’s competencies are merged there will be a big
advantage for them to satisfy the customer and to have different kind of business and
services which can be explored in the market.
3. Greater Price Control:
When merger of two brands take place in the market, there will be a demand for that
brand and as a result the prices will be pitched according to the demand and brand of
the product.
Here in this case both the brand companies have merged Starwood and Marriot, hence
Marriot will have few more added advantages in the market.
Being into competition and having an identity of the top hotels in market the prices by
them will be controlled and quoted, as a result to give a best service to the customers.
4. Economies of Scale Achieved:
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There will be a proportionate saving in the cost from the cost of operation to
generating revenue. When Marriot acquired Starwood, there will be cut down of many
things such as management cost, operational cost. After getting merged with
Starwood, the system and the management will be maintained and there will be things
in the hotel that will have to cut down on, and which as a result will help to generate
revenue and reduce the cost.
5. Diversification:
When there a horizontal merger between two firms, in this case in the hospitality
industry like Marriot acquired Starwood, every firm / hotel has their own USP where
they have an idea how to sale the product in the market.
As a result, when the top brands merge together, there will be different and unique
idea in the business. Where Marriot will come up with a different designed structure
for hotels, accommodation and Sherwood might have an idea for entertainment, food
and beverages which as a result will help the company to grow and have different
innovative ideas to help them satisfy the customer.
6. Business Intelligence:
Ideally when there is a merger between two companies. Here when Marriot acquired
Starwood, there will be a better management in place and a system which helps the
company to drive and achieve the goal.
Like Starwood will come up with the different company strategies while Marriot with
different set of ideas which help to run the hotel at a global level (Pohlman, 2017).
(Source: http://3z75b1utv4szyh55x5jh7axa.wpengine.netdna-cdn.com/wp-content/
uploads/2016/09/Starwood20Marriott-photo.jpg)
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2.2 A Discussion of how integration has affected the hospitality business.
There are various activities or functions which the hospitality industry need to take into
consideration as the organisation faces a lot of completion in the market. The different type of
integration which affects the hospitality business is as follows:
1. Higher Prices for the Customers
Many a times it happens that when two brands are merged there will a high price
quotation in the market. While in this case there will be a time where Marriot has
increased the prices of different services. Hence as a result some premium
charges will be applies to this, where increase in the prices of the room, the food
and different such hospitality services will be quoted in the market.
2. Monopoly:
Marriot and Starwood are one of the top brands in the hospitality industry, which
as a result after 2016 when the companies where merged, there will be a
monopolistic competition in the market. When two top brands come up with a
higher power together there will a monopoly in the market.
3. Unemployment:
When two firms merge with each other, like Marriot and Starwood the system
and the management tend to lay off a lot of employee from the hotels which
results in unemployment.
During this merger there were many employees laid off from Marriot. (Harrow,
2015)
As a result, Merger and Acquisition plays a significant role in the hospitality industry, it
increases the sales and improves the profitability in the industry. The customer service
improves the post integration with lower cost, merger helps the company to expand and grow
and other hand it creates a monopoly and unemployment in the market.
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Task 3
3.1 Develop a rationale for a selected project clearly justifying decisions linked to target
market.
M3. For the purpose of development of the rationale business, an example for opening up a
new hotel along with a restaurant is selected based on which proper planning for the
particular project can be undertaken.
D1. Idea generation:
As discussed above, the Hotel with restaurant business is selected for the purpose of study as
the demand for tourism in UK has been increasing at faster pace the particular business will
be able to fetch more return for the organisation. With increase in number of tourist, the
demand for hotels and restaurant business also increases as it is the main requirement for the
tourist which they cannot compromise upon. The increment in the number of tourists each
year in UK showcases that these type of business has strong potential to grow in future.
Though the competition in the particular business is also very intense but the main focus in
this business will be on the middle class family which can afford the luxurious hotel services
at lower prices. In this case, the business will focus on providing quality service to the middle
class family at very affordable price for those people who visit UK for the purpose of
tourism. This will be the main idea for starting up a business in hospitality industry later on it
can be expanded in different location as per the market research.
D3. Market Research:
Before starting up any new business, it is advisable to carry out a market research which is
very crucial for the business organisation for the purpose of long term growth and success of
the business. The market research can be carry out by preparing questionnaire which can be
filled by different people specially the tourist through which we can analyse the requirement
of the tourist properly. Also the personal interview with the tourist can be also done which
can help the organisation to understand about the expectations of the customers based on
which the product can be designed. The research will also help to identify the target market
and the prices which can be offered to the customer for different types of services. A Sample
size of 1000 tourist can be selected for the purpose of research (Olsen & Roper, 1998).
Target Market: As discussed earlier, the target market for the business selected will be the
middle class families who cannot afford the luxury hotels which are highly priced for the
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tourist packages. The segmentation of the target will include tourists from all the age group
but will focus more on those set of tourists which are looking value for the money and will be
more inclined towards the deals which are affordable for them. The geographical location
will be selected as the main cities in UK like London, Edinburgh, Nottingham, Yorkshire etc.
Size of the business: The hotel will be designed in such a manner that tourist gets maximum
facilities within the premises. There will be around 250 rooms which will be constructed in
the hotel out of which 150 rooms will be allocated for AC and 100 rooms will be non AC.
The hotel will also allocate different space for the food and lodging facilities.
Investment requirement: In order to develop the particular project, the requirement for
investment will be very high. The various modes of financing which can use for the project
can be from bank loans, Venture capital or through partnership business.
Products and Services to be offered: the various products and services which can be offered
under the hotel business are as follows:
 150 AC rooms and 100 non AC rooms
 Excellent quality of food and beverages offered to the tourists.
 Tourist guides
 Pick and drop and other conveyance facility for the tourist who are willing to avail
 Free Wifi
 Swimming pool and Gymnasium
 Saloon facilities (Paid)
Licensing: for starting any business in UK it is essential to obtain the license from the
government. Once proper planning is conducted, it is essential for the business organisation
to obtain the license for carry out business activities.
Development of the Vendor: In order to offer all these services to the tourist it is essential to
identify various vendors which can provide different type of services such as saloons, grocery
etc.
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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.
In order to establish a hotel and restaurant business it is essential to plan properly about the
requirements of the business which can satisfy the needs of the customers. There are various
things which need to be taken into consideration because of intense competition in the
particular industry.
D2. The organisation needs to plan various activities which are as follows:
 Ambience Planning: the Ambience and interior of the hotel and restaurant is one of
the most essential service in the hospitality industry such as spa, restaurants, hotel etc.
it is essential for the hotel, to handle the interior and ambience arrangement properly
which can attracts more customers as this is the first and foremost thing which
increase the sales and revenue for the business. Though the organisation will focus on
the middle class people but still the ambience should be design in such a way that it
gives them a feeling of luxury hotel.
 Management of Quality: the Quality of the hotel should be managed properly
specially the quality of the food which the organisation will be serving to the
customers. The quality of the food be such that it does not only attract the customer
who are using the hotel service but also it attracts the people outside from the hotel or
the localised.
 Qualified Personnel: it is essential for the business organisation to recruit the
qualified personnel because they are the one who interacts with the customers and if
they are qualified then the customer will satisfy and it will increase the business and
profitability of the organisation. The personnel should be polite in behaviour and then
attitude of the employees should be positive when they provide a particular service to
the customer. The receptionist should be efficient and polite which can manage the
customer queries effectively. At least 2 receptionist is required to manage the
reception work in the hotel along with 4 guides and 5 managers who can help the
customers regarding any information or services which they want. The managers
should have bachelor’s degree or have done hotel management courses which can
help them to understand the expectation from work. There is requirement of at least 7
special cooks which can make different type of cuisine as per the desire of the
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customers. Other staffs include waiters, room cleaner, laundry people etc which
should be also prompt and effective.
 Operational management: the next most essential task of the organisation is to manage
the operation. The operations which are carried out in the organisation needs to be
effective and appropriate. All the operational activities such as cleaning of the rooms
and passage area, laundry services, food management, conveyance management,
management of the accounts etc should be done with proper care which can satisfy the
need of the customers.
 Pricing and Promotion: In order to increase the demand of the customer, the
organisation requires promoting the business so that they can catch more attention.
Advertisement on social media such as twitter, facebook can generate effective results
along with making tie ups with various travel and tour operators and the websites
which provides tourism services can also help to generate more sales for the
organisation. The organisation can also offer various types of discounts to the
customer as the middle class people are price sensitive and the word of mouth can
help to increase the customer base (Jones, 1999).
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Conclusion
The travel and tourism industry has developed over the years because of various services
which are provided by the hospitality industry such as catering and accommodation services.
These services are very important as the Tourists require proper food and accommodation
when they travel to different places. In order to establish new business, the organisation needs
to take various activities which can help the organisation to grow their business and ensure
long term growth for the business.
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References
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