Hospitality Provision in Travel & Tourism Sector - Business Report

This report delves into the crucial role of hospitality provisions within the travel and tourism sector, emphasizing the importance of accommodation and catering services in attracting customers. The analysis begins with an overview of the hospitality industry, highlighting its various components such as hotels, restaurants, and bars, and their interrelationships with the tourism sector. The report then examines the implications of integration strategies, including both vertical and horizontal integration, on hospitality businesses like Intercontinental Hotel Group (IHG), assessing their impact on market share, brand value, and pricing policies. Furthermore, the report discusses the influence of integration on IHG, focusing on increased globalization, competitive advantages, and the need for strategic pricing. Finally, the report develops a plan for a hospitality business, focusing on operational requirements and human resource allocation within the context of a theme park, offering insights into effective business strategies and resource management. The report also highlights the interrelationships between hospitality & travel and tourism businesses in UK.

Hospitality Provision in Travel &
Tourism Sector

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1- ARTICLE.........................................................................................................................3
Task 2...............................................................................................................................................6
2.1 Analyzing the implications of integration to the hospitality industry....................................6
2.2 Discussing how integration has affected a hospitality business...........................................7
TASK 3..........................................................................................................................................10
3.1 Developing a rationale for theme park.................................................................................10
3.2 Developing a Plan for hospitality business in relation to human resource allocation.........11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Hospitality provisions play an important role in travel and tourism sector as it involves
overnight stay which requires accommodation as well as catering. Hospitality products and
services help the travel and tourism organizations to attract customers (Airey and et.al., 2015). In
other words, hospitality sector aids the travel and tourism industry in meeting the customer’s
expectations. Intercontinental Hotel Group PLC (IHG) is British multinational hotel situated in
UK. It has over 742000 rooms and around 5028 hotels across the world (About Intercontinental
Hotels Group, 2016). The report is based on different scenarios. In the first scenario, role of
hospitality industry within travel and tourism will be explained. Second scenario will analyze the
implications of integration in the hospitality industry. In this report, a plan will be developed by
including various operational requirements of the business organization in relation to the HR
allocation.
TASK 1- ARTICLE
Role of Hospitality Industry within travel and tourism sector
Hospitality Industry includes hotels, restaurants, pubs, bars, nightclubs, contract based
food providers, membership club and events etc. Hotels provide facilities from 1 start to 5 star. It
also deliver budget hotels providing bed and breakfast to the people who are traveling
(Mohammed, Law and Guillet, 2015). Restaurants provide travelers with variety of services
such as fast food etc. Hospitality sector also include cafes, coffees shops, Pubs and bars, manged
houses tented,leased pubs, free houses etc.
All these services play a vital role in attracting customers and travelers to come and
enjoy. This helps the travel and tourism organization in attracting the customers. Travel and
tourism sector provides various services to its clients such as conferences, vents, tour
destinations, accommodation, transport services etc.
For accomplishing all such services, hospitality industry plays a important role in travel
and tourism industry (Martin-Tapia, Aragon-Correa and de la Torre-Ruiz, 2015). Hospitality
industry is billion dollar industry that depends on the availability of disposable income and
leisure time. Various units of hospitality industry such as hotels, restaurants, parks etc consist
provide with various facilities of maintenance by kitchen workers, bartenders etc. Vacancy rate
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is an important variable for the hospitality industry. Hospitality business is just like a factory
where owner thinks that it must utilize its productive assets as much as he can. Similarly, the
owner of hotels and restaurants seeks to maximize the number of customers. They further lead to
form different services that purpose is to increase the usage or vacancy rate the hotel conciliators.
Hospitality industry players such as IHG group of hotels find advantage in old classics
(location) as well as ongoing and initial investment support that is it reflected in the material
upkeep of facilities and the luxuries located therein. Particular themes adopted by the marketing
arm of the organization in question. For example at theme restaurants. Are a very important
characteristics of the personnel working in direct contact with the customers. The authenticity,
professionalism, and actual concern for the well-being and happiness of the consumers that are
communicated by the successful organizations helps to gain competitive advantage (Bosselman,
Brown and Thomas, 2016). All such services help the tour operators of UK in adding various
attractive options in their packages for the customers. These days, hospitality industry also
makes contract with various tour operators to get maximum number of customers. This help both
the industries that are tourism as well as hospitality in increasing there revenue.
The Interrelationships between Hospitality & Travel and Tourism Businesses in
UK
With the increase in development of society, various human activities promote the
development of new businesses. Hospitality and tourism industry are the fastest growing sectors
in UK. Hospitality industry includes various management activities that are related to HR,
material, engineering equipment, business quality as well as financial management. Whereas,
tourism industry provides travelers with various facilities that are transportation,
accommodation, sightseeing, catering, entertainment and shopping (Jang, Paraskevas and
Altinay, 2015). Both hospitality as well as tourism industry are interrelated with each other.
Activities of both affect each other but cannot be separated from each other.
Hospitality organization such as IHG offers various services to the travel and tourism
industry in UK. These days, for office meetings or leisure, people spend their significant amount
of time in hotels. Visitors want to reap the benefits offered by the hotels particularly for the
premium prices paid (Martin-Tapia, Aragon-Correa and de la Torre-Ruiz, 2015). In order to find
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the interrelationship between both the industries, there needs to go through following
dimensions:
Package Holidays- Hospitality sector plays an important role in holiday packages of tour
operators such as Thomas Cook, cox and Kings etc. Hotels such as IHG which are included in
holiday packages finally depends on the prices paid for the packages. If someone goes for a
budget package then one will not demand for 5 star accommodation, but there must be 3 or 4 star
accommodation (King and Backer, 2015). Popular holiday packages are often mass purchased so
that customers will get benefit from good airline ticket as well as hotel prices. Hotels also h ave
special agreements with the tour operators. As they offer special rates to their organizations in
return for a guaranteed flow in number of consumers from the end of tour operator Guests may
go for accommodation on the basis of bed, breakfast etc. Tour operators regularly check that
guests are having a great time in the hotel. Also, they ask if any problem they have experienced
in their stay so that it can be sorted accordingly.
Aviation- Availability of accommodation is a serious issue that affects the success of
airline industry. Therefore, airlines are required to pre-analyze the situations regarding the
availability of bed and accordingly it is required to choose the flight timings and days
(Bosselman, Brown and Thomas, 2016). These days, airline industry also provides on board
hospitality services by including food and sleeping arrangement. The following arrangement
sometimes are included in the price of ticket. As well as sometimes are not includes. For
business class customers all such facilities are included in the price.
Business travel- These days, business professionals prefer restaurants and hotel to
conduct meetings. For that, they look for the hotels which provide WiFi, , conference hall,
meeting areas etc.
Visitor’s attraction- A visitor attraction is anything which gives interest to tourists.
Attractions can be in the form of man made creations that are theme parks and museums. It can
also be natural attractions such as natural parks (Foerste and Buhalis, 2015). On the other hand,
some sites happen to be of interest to people simply because of the activities taking place over
there. And not because of the actual place hosting the event is of any interest.
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TASK 2
2.1 Analyzing the implications of integration to the hospitality industry
Integration helps the organization in increasing the market share and presence of the
company in global market. Integration means bringing the smaller element into single system so
that it can function as one. Vertical Integration- It is an arrangement through which supply chain of an organization
is owned by another company (Vertical and strategical integration, 2016). In such,
distribution channels of one company are acquired by another organization. This will
help the company to reduce their operating expenses and cost relating to distribution of
products (Couture and et.al., 2015). IHG Hotel Group can use this integration for
reducing their cost of distributing the services. It also helps in maximizing profitability of
the organization as well as also provides benefit on lowering the extra cost (Eric and
Desai, 2015). Through this, IHG will be able to control suppliers which are related to
transportation and accommodation services of the company. It will also make limitation
on market competition of the business. Horizontal integration: Horizontal integration is a process of growing the business on
customer base. This will help IHG Group in enhancing the level of production by
expanding their customer base. The organization can perform merger and acquisition of
the business with another business entity through which they are able to cover more
customer network within the market (Hsu, 2015). This process helps IHG Hotels in
making monopoly market conditions by which it can get abnormal profits within the
marketplace. For example, Hotel of IHG Group purchased a hotel at Walt Disney Resort
for 92,202,465. Through this, IHG merged with the company having the same
distribution chain. Horizontal integration is of complementary nature which is opposed to
competitive. Many airlines are there which works for hotel chains. These relations help
the organization to attract people to their hotel. By performing merger, the company can
enhance the market share and also can attain competitive advantage in the market
(Knutson, Kim and Vogt, 2015). Apart from this, the company also will be able to
provide improved services to the customer which will attract them towards the hotel. For
example merger of Starwood and Marriott Hotels and resorts. It is one of the world's
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largest merger deals in the hospitality business. It will make them able to generate
monopoly market conditions in the tourism business. Branding and pricing policies: A brand is the thing which attracts consumers by its
name only. It is related to emotions and feeling of which they are getting from the
services provided by the company. The success of the hotel depends upon its branding
within the market (Law and et.al., 2015). Merger between two organizations helps them
to increase their brand value. Other than this, it will also affect pricing policies of the
business because merging of two businesses will help the company in increasing their
prices so that they can give better services to the customers.
Implication of the integration on IHG HOTEL: Increased globalization of industry: As the company expands their business, it will
increase their business in the global hotel industry. Form this the organization will be
able to cover more areas. Through integration, IHG Hotel will be able to face competition
in the global market. It will also reduce the barrier related to trade because the company
has different branches worldwide (Legohérel and et.al., 2015). Through this, the company
can also create their own accounts on different website through which they can get
connected with different clients on their social media network.
 Pricing policies: Integration will impact on the pricing policies of the business. Merger
of two companies have huge impact on the pricing of the services of the organization.
The success of the business will depend upon the prices and image of the business
(Stepchenkova and Lu, 2015). IHG Hotel should use Horizontal integration in their
business as this will help in controlling the market competition. Other than this, for
controlling supply chain, they should follow Vertical integration so that they can be able
to control the supply in the market.
2.2 Discussing how integration has affected a hospitality business
Integration affects the business of Intercontinental Hotel Group in increasing their
profitability because through this, the organization will be able to spread out its various business
activities in the global market. It will also help the company to present new as well as innovative
services to its guest so that they can more benefits through this. It will also assist Intercontinental
Hotel Group in achieving more market share in comparison to competitors (Chaudhry and
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Maggon, 2015). Along with this, it will also lead to increase in the brand image in the market
through which they can earn more profits in the market.
Form integration, the hotel can also improve the quality of their products which will
make the guest more satisfied from the services. Other than this, they can also control sub sectors
through which they can attain set goals . Economies of scale: Through this, Intercontinental Hotel Group will be able to reduce
their operating cost through which they can earn more profits from the business.
Integration will help Intercontinental Hotel Group to increase its market share so that
they can get monopoly market in tourism industry. The tour operators such as Thomas
Cook and Cox and King etc can also lower cost of introducing new services (Martin,
Ham and Rosenbaum, 2015). Through horizontal integration, IHG hotel can enter into
new markets more easily. Economies of scale are related to advantage of cost due to
increase in size. scale and output of operations. Integration will help the organization to
get benefits in their cost and inputs in the business. Through this, a fixed amount of cost
should be spent on providing the services to the customer. Standardization: Through integration, Intercontinental Hotel Group can also give
standardize services to the customers. This will help in increasing customer satisfaction.
Apart from this, consumers will also get innovative services from the hotel group which
will result in the growth of business (Tung and McKercher, 2015). Other than this,
standardization will also help in enhancing the brand value of Hotel. It will also assist the
organization in introducing improved resources through which the organization can get
new things. It will help in attracting new and existing consumers. Fewer major organizations: Integration will lead to development few major organization
in the hospitality sector. If the business enterprises are merging with each other it will
lead to reduce small sector hospitality business which is beneficial for Intercontinental
Hotel Group. As there is less big organization in the business, IHG Hotel can get more
profits in the Market (Mohammed, Law and Guillet, 2015). Integration will help to
merge two or more organizations that assist in reducing competition in the market. Control of sub sectors: Apart from all the above, the organization will be able to control
the sub sectors of business. This will also make them able to control on the other such
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sectors. Through which, IHG Hotel can make more concentrated strategy for developing
market share (Nunkoo, 2015). Improved quality: If the organizations are getting integrated with each other, this will
help in increasing the quality of the products. Through this, they will be able make the
client more satisfied and also the tourists will be attracted from the services of the
organization (Park, 2015). They can also increase there focus on health and safety
concern of visitors. Apart from this, the organization may also look forwards to improve
its technological services. Reduction of independent business: If Intercontinental Hotel Group merged with other
organizations will leads to the reduction in the other independent business in the the
respective industry. Will the help of merger IHG can increase its profits but also it will
reduce number of Small business in hospitality industry. Through reduction in small and
independent business, the organization will be able to make more profit within the
marketplace (Griffin and Raj, 2015). Decrease the flexibility: Integration of the organization such as IHG will reduce the
chances of flexibility within the social group. There are many organizations, so it is more
difficult for an company to take regular decisions. For taking any single step regarding
change, the respective hotel group is required to get permission for all the related
companies. Apart from this, it will also affect working practices of the employees within
the organization. It is more difficult for employees to adopt any type of change in the
working practices (Rodriguez Oromendía and et.al., 2015).
 Huge of amount of money needed: Integration of the establishment requires a huge
amount of money. A organization requires large amount of money for investing in the
new hospitality businesses. It also suffers from loss of money if the integration is not
successful in the market if people do not like the combination of two industries.
TASK 3
3.1 Developing a rationale for theme park
Intercontinental Hotel Group had decided to develop a them park in the London UK. This
theme park will be based on the ancient time. Roads, machines vehicles etc all will be related to
the ancients time.
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The reason behind taking this step of IHG is the increasing demand of visitors towards such
types of theme parks. Countries like Unites states, France etc have them parks which are the
greater attraction visitors in those countries. By looking such attraction and demand of the
visitors the IHG had decided to make a theme park based on the Fairy land Park. Also Ferrari
park in Dubai has another greater attraction for the travelers to visit over there. But United
Kingdom does not have any such kind of visitors attraction (Slocum, Kline and Holden, 2015).
So the IHG had come out with the concept of fairy land theme park. This could become a great
attraction for tourist in United Kingdom. IHG can go for such park within its hotel premises or at
other place in UK.
This will not only lead to increase in the profits of the company but also will lead to
increase in the economy of the country. The same way theme parks of Dubai, France and US are
earning for there respective countries. This will also helps various tour operators of the United
Kingdom such as Thomas Cook and Cox and King etc. In attracting customers towards their
packages. Theme parks plays a role star players in the tourism industry this is because they have
special and important role in generating tourism demand (Schuckert, Law and Liu, 2015). Theme
parks are the main motivators for tourism trips to many destinations and core elements of the
tourism product.
Competition in the theme park market is growing also in terms of an increasing number
of parks, but also relative to other uses of leisure. But in different areas, the theme park market in
seems to be reaching its saturation point and the parks have to cater for visitors who are getting
more and more experienced and demanding (Magnini, Xiang and Fesenmaier, 2015). Given
these trends of growing theme park supply, environmental constraints and increasingly
discriminating consumer demand, it can be concluded that theme parks, to survive in this
competitive market, must optimize is, given an ever increasing number of parks and future trend
of consumer behavior.
This will not only help the organizations and hotels to increase there demand built will
also helps the government in meeting there expenses. As this will lead to increase in the national
income of the government. This will again also helps the government in seeking maximum for
exchange transaction and polices (Martin-Tapia, Aragon-Correa and de la Torre-Ruiz, 2015). In
order to build the the park. The organization can also prepare a merge contract with to or three
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other independent hotel groups of the UK. Those are Marriott international, Hilton etc to build
such theme park in London.
3.2 Developing a Plan for hospitality business in relation to human resource allocation
Different stages will be involved for preparing a theme based park by IHG group in UK.
Stage 1-Development
Intercontinental Hotel Group PLC has come up with the idea of theme based park in
London. The objective behind such idea is to increase the demand and tourism in UK. Secondly
the vision of IHG is to increase its demand in the eye of customers as well as to enhance its profit
level ( Bosselman, Brown and Thomas, 2016).
Various countries such as France, US as well as Dubai have theme park. Those theme park are
the most important attraction of visitors. Looking towards such IHG has come up with the idea
of Them based park. For creating such park IHG will be requiring to fulfill the formalities with
government and if its is unable to create the theme park. Then it will have to make contract with
other hospitality or tourism industries for establishing huge the park. Firstly the company is
required to research about idea that what type of themes parks are there in the market. And what
else they can create to attract the customers (Magnini, Xiang and Fesenmaier, 2015). IHG is
required to create the entire project on a model so that it can get the idea of cost and expenditure
that it might occur in the entire process. It will have to look on various ares of technology,
creativity as well as healthy research will have to be made in order to build a solid them based
park for travelers.
IHG has also to make the park on the basis of targeted market and their requirements. If it
goes for age groups demographic target. Then it can build various rides according to the age
group people. Some for adults and some for children. So that whole family can enjoy in the park.
Another think it had to go for is the location as well as size of the part. That is where the theme
park should be situated and in large or small scale (Park, Zhang and Cole, 2015).
Another thing IHG have to go through is funding that from where it will raise funds etc to create
its vision on land. And the traveler can take benefits of there vision. IHG is also required to o
through with the products and services will be requiring to accomplish the task of them based
park (Schuckert, Law and Liu, 2015).
Stage 2 -Design
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After going through all research and formalities the another step is to design the project.
While designing the IHG is required to take care of its ambiance, culture etc. IHG has decided to
make a fairy land based theme park. Then it is required to prepare the design accordingly. All
fairy tale characters and imagination should be implied within the theme park. Another thing it is
required to take care of is its target market (Mohammed, Law and Guillet, 2015). Under such
theme park its is required to place various monuments and rides according to the age group. In
order to maintain the brand image it is required to implant the park with each and every facility
and keeping in mind of each age group people. IHG will have to take care of each sector people
and will have to manage the work accordingly. Also it is required to take care of sustainability,
consumers and individual needs arriving in the theme park. Design of the theme park must be as
per the name (Martin, Ham and Rosenbaum, 2015). It should be like the person should feel
he/she is actually in fairy land. It can also take inspirations from fairy tales movies, cartoons and
stories that every child use to hear in there childhood.
Stage 3- Operations
After getting the idea of how the park is to be developed and designed next step of IHG
should of finding out the various requirements. Such as staffing requirement, in this IHG has to
find out where and how much employees or workers will be required in the park. And with what
qualifications they should have. Also required to ensure that how much more staff will be
required at the time of rush or busy seasons (Tung and McKercher, 2015). Also IHG has to
figure out what will be its recruitment policies and criteria for selecting employees for the park.
This is important because employees are required to be lenient and friendly in nature. There
should be no deficit in the number of employees as in the place such as themes parks if there is
not employee there for guiding customers toward the ride. Than it might cause accidents etc
within the park that will further place an impact on the brand image of theme park (Martin, Ham
and Rosenbaum, 2015). Also IHG is required to decide in advance regarding the promotional
plans and activities. Through which channel they can promote such theme park etc. Along with
that to attract more and more customer in start the park should include low pricing strategy. This
will help the IHG in increasing the brand image of the park in eyes of tour operators and
customers.
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