A Case Study of Marriott International's Integration Strategy

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HOSPITALITY PROVISION IN TRAVEL
AND TOURISM SECTOR
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Table of Contents
INTRODUCTION............................................................................................................................. 3
TASK 1............................................................................................................................................ 4
LO1.................................................................................................................................................4
1.1 DISCUSS THE INTERRELATIONSHIP BETWEEN HOSPITALITY, TRAVEL AND TOURISM.....4
TASK 2............................................................................................................................................ 9
LO 2................................................................................................................................................ 9
2.1 ANALYSE THE IMPLICATIONS OF INTEGRATION TO THE HOSPITALITY.................................9
2.2 AFFECTS OF INTEGRATION IN HOSPITALITY BUSINESS.......................................................12
TASK 3.......................................................................................................................................... 14
LO 3.............................................................................................................................................. 14
CONCLUSION............................................................................................................................... 26
REFERENCES.................................................................................................................................27
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INTRODUCTION
Hospitality and tourism is the fastest growing industry nowadays because the buying capacity
of the customer has increased in comparison to the years back when travel and tourism were
not that much popular. The social media platforms like Facebook, Instagram, blogs etc. have
made travel and tourism industry very attractive and interesting which induces the travellers to
go and travel in their leisure and want a great luxurious stay in the best hotels with affordable
prices. Nowadays there are various channels which are travel and hospitality oriented and
broadcast numerous shows of which are based on different destinations and things which can
be done there this has also induced and attracted the customers to a great extent to travel at
different destinations. Hospitality and tourism is the backbone for various countries like, UK,
U.S.A, UAE etc. this assignment is about the hospitality, travel and tourism which explores the
interrelationship among them, various services which are offered to the travellers in the
hospitality industry (Breinlich et al., 2017).
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TASK 1
LO1
1.1 DISCUSS THE INTERRELATIONSHIP BETWEEN HOSPITALITY, TRAVEL AND
TOURISM
HOTEL MANAGEMENT AND COMPOSITION
Hotels are the buildings which are established for the travellers and tourists for a temporary
accommodation where all the facilities and amenities like, lodging, entertainment, health,
meals etc. are given to the guests depending on the star of the hotel. The hotels are categorized
on the basis of the starts which range from 1 star to 5-star hotels. 1 star hotels are generally
motels which are hard to book online and don't have any facility other than basic housekeeping
and food services, 2 star hotels are the lounge which is available with some better rooms and
few added facilities to it (Breinlich et al., 2017).3 star hotels are the affordable hotels with the
facilities provided to the guests like complimentary breakfast, laundry, spa, meals, sports etc.
the interior and infra of such hotels are very beautiful and soothing. 4 star hotels are a little bit
expensive than 3 star hotels with all the facilities and amenities for the guests and it has a
number of rooms with more options to choose. The 5-star hotels are generally the hotel chains
like Marriott, Hyatt etc. where the maximum number of guests belong to the elite class. These
type of hotels are found all over the world and known for their best services. Hospitality also
comprises of Pubs, nightclubs, restaurants, catering etc.
 NIGHTCLUBS: These are the clubs which are entertaining the guests whole night where
the guests can enjoy good music, drinks, food and can dance with their family and
friends. The guest can enjoy a happening party in nightclubs with lots of fun and drinks.
The maximum crowd fou8nd here is of youngsters and young couple.
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NIGHT CLUB
 PUBS: Pubs are the clubs where the travellers go to enjoy the nightlife where they can
have food and drinks and can hang out with their friends and families with loud music
and dance. These are the most trending and happening spot among young youth to just
chill and enjoy their leisure (Vellas,2016).
PUBS
 RESTAURANTS: These are the heart of the hospitality industry which offers a wide range
of food to the guests who are staying in resorts and hotels. Restaurants can be of
different types depending on the hotels like poolside, rooftop, café, fine-dine and
mainstream restaurants.
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RESTAURANT
 RESORTS: They are established in a huge area where all kind of facilities are available to
the guests including sports, spa, gym, beauty and wellness, exquisite suites which are
also customized. Generally, the resorts are situated out of the city area and in the scenic
locations like a near sea, in between the mountains etc. ( Hon and Lui, 2016).
 CATERING: The hospitality also offers the facility of catering for various events and to
various hotels which includes numerous and wide variety of food and beverages. The
dishes that are offered in the hotels are made by the chefs and are exclusive dishes.
TRAVEL AND TOURISM
 TRAVEL INDUSTRY: Travel industry is the backbone of every economy which enables
the traveller to go from one place to another by using a various medium like, flights,
trains, buses, cruise etc. travel and tourism have emerged so much and enables the
travellers to do the online booking also.
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 EVENTS AND CONFERENCES: The events like, weddings, parties, and conferences are
being organized in luxurious hotels which showcase the goodwill and money power
of the company and the host of the event. A hotel gives facilities for catering,
banquets, music, lights, decoration etc. for such events.
 TOURIST ATTRACTIONS: These are places or spots which the tourist wants to visit
once for a lifetime experience making it the biggest source of income in the travel
and tourism industry.
 ACCOMMODATION SERVICES: These are the services which are offered by the
hotels as per the requirement of the guests and prices which can be afforded by the.
There are various options which are offered by the hotels in the form of deluxe
suites, super deluxe suites, honeymoon suites, etc (Mitrasinvoic, 2016).
 PASSENGER TRANSPORT: The guests are offered with transportation facilities for
the sight-seeing by a various medium like, train, buses, cars etc. with the help of
which tourists can explore the destination.
 THEME PARKS: These are the huge amusement parks that are located far away from
the city land and offers different rides like a roller-coaster, slides, sports facilities etc
with the accommodation and food facilities for the guests who want to stay there
for few days.
INTERRELATIONSHIP BETWEEN HOSPITALITY AND TRAVEL AND TOURISM
Travel, tourism and hospitality are closely interconnected with each other. The traveller travels
using the various services offered by the travel agencies which provide the hotel bookings for
the travellers also. These three collectively proves to be the backbone of the economy in
various countries. Hospitality offers so many facilities and travel and tourism enable the tourist
to enjoy their leisure time in vacay and exploring new destinations with all the facilities given to
them with the help of tourism and hospitality. A traveller who is away from his home and place
can enjoy the best food, wellness facility, sports, sight-seeing; can visit famous tourist spots etc.
with the help of various travel agencies like Thomas Cook, Cox and Kings etc. which serves
globally and promotes the best experience of travel, tourism and hospitality by offering visa,
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ticket booking, hotel booking, sight-seeing etc. for the tourists. The tourist destinations attract
the tourists visit them and because of the tourists and by seeing the business opportunities the
establishment of hotels take place and like this travel, tourism and hospitality are interrelated
with each other (Vellas, 2016).
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TASK 2
LO 2
2.1 ANALYSE THE IMPLICATIONS OF INTEGRATION TO THE HOSPITALITY
INTEGRATION: Integration means merging of the two same product line or two different lines
in order to reduce the cost of operation is called integration. Integration is done for various
reasons the main reason is to cut down the prices which give huge support to the business,
another benefit of integration is that it shares the resources which are costly and limited in
nature (Higdon, 2016).
Hospitality goes for the integration because it helps in cutting down the price of the operation
and increases the effectiveness of the products and services which are given to the customers.
The hospitality adopts two kinds of integration one is horizontal integration another is vertical
integration. Integration merges the two different or the same product lines with the same goal
of satisfying the customer and enhancing the credibility and goodwill of the business.
HORIZONTAL INTEGRATION: In this type of integration the business which is dealing into same
product line merge together for the growth of the business and cutting of the operational cost
of the business. This type of integration helps in increasing the market share and requires a
huge business investment which decreases the operation cost and gives an expansion to the
business by applying varied tools and techniques in the business in the production method.
VERTICAL INTEGRATION: In this type of integration the business takes over another business
which is on the same level of the production. This type of integration does not require higher
investment instead it helps in increasing the supply chain of the business and helps in
minimizing the waste of the resources and the products. The vertical integration is further
divided into forwarding integration and backward integration (Burns and Dewhurts,2016):
Forward Integration: This is also known as the downstream integration where the distribution
process and procedure is under the control of the company.
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Backward Integration: this is also known as the upstream integration in which the control of
suppliers is also taken up by the company.
Understanding the implication of integration in hospitality:
The following are the implications of the integrations in hospitality which helps in flourishing
the business and increases their goodwill in the market:
Branding and Policy: The brand value of every hotel and the product plays an important role,
the integration helps in maintaining the policies which are customer oriented and profit-
oriented along with which it helps in maintaining the brand value of the business. Building up a
good brand value in the hospitality industry plays a crucial role as it adds on to the status if the
customer and the business which are using the services of the hotel as a guest over there.
Competition between large and independent establishment: The integration of two hotels
takes place then it becomes difficult for the small hotels to compete for these big hotels in
every term as there is expansion, growth, increased customer base, more market share and
brand value which affects the small establishment. The employee turnover in independent
hotels increases the employees want to join these big hotels.
Market manipulation control: The integration maximum time leads to conflict on various things
like differences in the areas of interest, methods, strategies, resources etc. this leads to
manipulation of the market as these conflicts adversely affects the production, distribution and
decision-making process of the company which automatically affects the sale and purchase of
bulk products which the company requires hence leads in manipulation of the market.
Increase in globalization: With the integration of the two hotels, it leads to expansion and
growth of the business. There is a blend of various things which are taken up from both the
hotels which can lead to the emergence of something innovative and very new which can be
spread on the global level. Globalization increases with the integration of the two business (Hon
and Lui, 2016).
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Increase in market share: As the integration of two hotels that take place leads to an increase
in the goodwill of the hotel example of this can be Marriott and Starwood. This increased and
adds in the goodwill of the hotel. With the integration, it helps in increasing the market share
by having more customer base and monetary values in terms of the share of the business.
Inclined towards customers: The integration helps in increasing more customer services and
strategies was the operation cost is being lowered which enables the business to take some
steps for increasing the services which can be offered to the services in any form which can give
a lifetime experience to the customers.
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2.2 AFFECTS OF INTEGRATION IN HOSPITALITY BUSINESS
The best example of the integration is MARRIOTT International which has 30 brands with more
than 7000 properties in more than 130 countries that are serving across the country under its
umbrella 1.2 million rooms is noted so far. Marriott has done integration in so many ways with
many different brands few working in the same product line few in a different line (Turner and
Endres,2017). The most famous integration done by Marriott was the merger of Marriott
International and Starwood. The whole merger was worth of £13 billion which has created so
many changes and affects differently s both the hotels are known for their best unmatched elite
customer services which is world famous and has created another level of goodwill in the
market with best staff and policies.
ENHANCED SALE: Marriott International has become the world’s largest hotel chain which
provides the unwind experience to the customer and elite unmatched services which have
added in the goodwill and credibility of the company. With its global presence, the customer
base has increased and the brand value has also increased which induces and attracts the
customers to enjoy their leisure and luxurious stay with Marriott International. This
automatically leads to an increase in the sale of the hotel all-over the world and reflects the
stability and reliability of the company.
MARKET SHARE CAPTURE: The integration in the form of a merger of Marriott and Starwood
have set a benchmark in the world of the hospitality industry as this was the most expensive
and huge merger in the hospitality industry. This merger enabled Marriott International to
increase its monetary value and increased market share. This merger has increased the share
value, property value, capital value of the company to an unexpected level. Which has lead to
an increase in the customer base also with increased goodwill in the hospitality industry
(Sigala,2016)
UPGRADED QUALITY: The integration enhances the business in every term whether it is quality
of the food, rooms, housekeeping, the facilities and amenities which are provided to the guest.
The merger has enhanced the quality of the staffs, kitchen, food and the services which are
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