Hospitality Provisions in the Travel & Tourism Sector Analysis Report

This report delves into the interrelationship between hospitality and the broader travel and tourism industry. It analyzes how integration, both vertical and horizontal, affects hospitality businesses, using TUI Group as a case study. The report discusses the implications of integration, such as economies of scale and market control, and examines how these strategies influence a company's performance. The study covers the scope and scale of the hospitality industry, emphasizing the importance of providing quality services to satisfy consumer needs and maintain competitiveness. The analysis also highlights the benefits of integration, including cost reduction, market expansion, and improved brand image. Furthermore, the report explores the interconnections between hotels and the travel industry, emphasizing how these sectors collaborate to meet tourist demands.

Hospitality Provisions
in the Travel
&Tourism Sector

Table of Contents
INTRODUCTION......................................................................................................................3
TASK 1 .....................................................................................................................................3
1.1 discuss the interrelationship between hospitality and wider travel and tourism business3
TASK 2......................................................................................................................................5
2.1 analyse the implications of integration to the hospitality industry..................................5
2.2: Discuss how integration has affected a hospitality business...........................................6
TASK 3......................................................................................................................................7
3.1:Develop a rationale ..........................................................................................................7
CONCLUSION ......................................................................................................................10
REFERENCES ........................................................................................................................11

INTRODUCTION
Travel and tourism are the part of hospitality industry and it is one of the fast growing
industry. As people travel to spend vocations, to attend the business meetings, sports and
other programmes. There are various services which are provided by the hospitality industry
which involves accommodation, transportation, food and beverage and other entertainment
facilities. It is important for the travel and tourism business to fulfil the expectations of
consumers by providing quality products and services. Travel and Tourism industry is one of
the fast growing sector in the world and there is huge scope. It is the busienss of attracting,
accomodating & entertaining tourists & the business of operating tours. Tour can be any type
and it it can be within the country or outside the country and its depends uopn the choice of
consumers and the facilities and service which are provided by the tour operator is depend
upon the choice of tourist. As the main aim of this sector is to satisfy the needs of consumers
by providing quality products and services and it will help the comapny to maximzie its sales
and it leads the higher profits. As a result organisation will able to grab more market share
which is helpful for the growth of corporation. There are various nations which are known for
tourist place and people attract towards them so that they can visit and experience a better
holiday trip. It is beneficial for the nation becasue it will increase the foreign currency which
is importnat for the economic growth and development of a country. To better understand this
concept TUI group has been chosen which is a travel and tourism company and it belongs to
United kingdom. As organisation has a collaboration with travel agency, hotel, airlines &
ships. It makes control over 1800 travel agency & 300 hotels & resort. In the financial year
2018 TUI group has earned total revenue of €19523.9 million and net income of €780.2
million. In this report, there are various topics has been covered such as: interrelation among
hospitality & wider travel and tourism business, implication of integration to the hospitality
and how it affects the business. Apart from this it also discuss about to develop a rationale for
the chosen project and to develop a plan for a hospitality business.
TASK 1
1.1 discuss the interrelationship between hospitality and wider travel and tourism business
There is an interrelationship between hospitality and travel and tourism business. As
the travel & tourism comes under hospitality industry and in the success of this industry
tourism plays an important role. It is most necessary for the companies to provide better
products and services in order to satisfy the needs of consumers. It involves: transportation,

event planning, theme park etc. As the facilities and services which are provided by the
hotels are includes, club, bar, pub, swimming pool etc. There are various facilities which are
provided by the UTI Group as per the requirement of consumers. It is important to understand
the needs of consumers so that it can generates more revenue as a result organisation will able
to capture more market share. To sustain for a long term it is important for the tourist industry
to provide the products and services as per the needs of travellers and that they become loyal
with the corporation (Iancu and et. al., 2013).
There are various companies which are involved in this sector because of high
growth and scope in the business. It is require for the company to provide quality services at
affordable price so that consumers can retain and does not go outside to find any alternative
or substitute. As the tourism industry provides various services and facilities to the tourist and
so that they feel happy and get better experience. The services which are provided by the UTI
group are based upon demand and as per the budget of the consumers. As hotel and travel
industry both are linked to each other. As an instance, if there are family members who want
to travel at different locations and for that purpose they have to make contact to the specific
tour operator of United Kingdom which provide best package with quality services (Ghany
and Latif, 2012). The services which are provided by it as food and beverage,
accommodation and other facilities. As hotels will provide the food & accommodation to the
tourist and with it tour cannot be possible so it can be said that hotel and travel industry are
interlinked to each other. As TUI is famous company who provide the services which are
related to the travel and tourism business. It provide travel and tourism services and provide
the facilities which are related to accommodation and food because it has contact with the
hotels and while tour the tourist visit the hotel and get the services and facilities as per their
desire so that their needs can be satisfy. As the TUI group has contact with the
Intercontinental hotel group which provide various facilities and services to the tourist of TUI
Group which involves, accommodation, breakfast, lunch, dinner, pool, bar, swimming and
other facilities as per the desire of consumers. So it has been analysed that hospitality and
travel and tourism business are interlinked with each other and it contribute in the growth of
hospitality industry (El-Gohary, 2016).
Scope: In present time, the scope of hospitality industry mainly includes to the variety
of businesses that are beneficial for customer and providing useful services and facilities. It is
observed that hospitality is consider to be one of the main economical sectors that support in
major growth and prospects in jobs. Different businesses such as hotels, pubs, clubs,

restaurants are helpful in raising employment level and support in overall growth of
economy. In fact, it is a high revenue generator segment and produces a large number of jobs
as well. TUI has wider scope to expand its business in those countries in which it is not
operating its business operations so that it can earn more revenue which help the corporation
to grab more market share.
Scale: The industry of hospitality is being increasing at a very fast pace all over the
world that is consider to be the most elaborate working sectors in the market today.
According to Chris cooper the tourism industry could be defined as a complete range of
individual, businesses, companies and other sectors that are combine to deliver the best travel
experience to wide range of customer. The Hospitality Industry consists of a very broad
category of various fields within the industry itself also, Such as –
 Restaurants & bars
 Marketing & sales
 Human resources
 Housekeeping
 Travel agencies
 Tourism management
 Front office
 Hotels/Lodging etc
As the scale of TUI group is high because its business operations are wast and it is a
multinational company. The business of comapny is profitable because of its high scale of
business activities which help the corporation to maximize its revenue.
TASK 2
2.1 analyse the implications of integration to the hospitality industry
Integration is beneficial for the growth of company and generally corporation choose
this so that it can maximize its reach by focusing on economies of scale as a result they can
lower its operating cost. To increase the reach and minimize the cost the production there are
various companies which prefer outsourcing so that their time as well as money can be save
and TUI Group can make integration which is helpful for the growth of company and there

are two types of integration which can be seen in the organisation which involves: vertical
integration and horizontal integration (Lam and McKercher, 2013).
Verticle intergration: Verticle intergartion is an aggangement in that supply chain of
an organisation is owned by the corporation. When a company buys its suppliers or buys
other corporation in distribution chain than it is consider as vertical integration. It is
beneficial for the business of corporation because it minimize the cost and maximize the
revenue. For that purpose company can provide training to the employees rather than
employing from outside. As organisation will emphasis to deliver quality products and
services and focuses to maintain standard of services. As an instance, company try to provide
the services to another city and it has good reputation so consumers will attract towards the
organisation. TUI Group has focuses to provide better services in order to satisfy the needs of
consumers so that they become loyal and feel great experience with the corporation. For that
purpose company can merge with hotel Magic life and it is helpful for both because
maximum profits can will be generated which provide help to achieve the objectives. After
this integration name of company will be TUI Magic Life and this is successful when
innovative technology has been used by the organisation which is helpful to make the supply
chain more stronger and provides the requirements of consumers by delivering the quality
products and services (Airey and Gross, 2015).
Horizontal integration: In this type of integration two companies integrate to make
bigger corporation but is required that products have to be similar in nature and both
companies have provide similar types of products and services. As an instance, TUI Group
has merged with First Choice Airways to make bigger company. As a result its sales will
increase which is helpful the capture more market share and help the company to maximize
the revenue. As an instance, Company can make integration with Edward House Hotel so that
it can improve accommodation & service and other facilities which are require to provide in
order to fulfil the desires of consumers (Martínez and Rodríguez, 2013). This is beneficial for
the growth of corporation and business will expand and large number of people will attract
towards the company. As the resources will increase and consumers will get better facilities
and services as a result their needs can be satisfy which help the corporation to improve its
brand image. There is more competition in the market because of high growth in this business
so if two companies will merge than its strength will be double which provide help the
corporation to maximize its profits and expand its market share and to achieve its goals and
objectives within stipulated time period (Abubakar and Ilkan, 2016).

2.2: Discuss how integration has affected a hospitality business
In hospitality sector travel and tourism sector plays a vital role, As a huge amount of
revenue is generated from the sector. The main reason of adopting integration is to get global
exposure, that why company focuses on integration. There are mainly two types of
integration –Horizontal and Vertical.
 Horizontal Integration– A process by which a company can ensure the rapid
increase or rise in production of goods and services by being a part of the same supply
chain. They can opt for horizontal integration by means of merger and acquisition.
 Vertical Integration – These is different from horizontal integration. Different
supply chain are responsible for the production of different goods and services.
With the help of integration the company was able to get a significant control over
market and by that they were able to get cost advantage as well. After associating with the top
companies, TUI Group was able to get the advantage of economies of scale and by that they
were able to avoid the competition by restricting the entry of new firm via economies of scale
which was only possible after integration. As the company have the market control, they
become price maker. They had a control over prices and other companies had to alter the
pricing according to the companies pricing. Tourism success also depends upon the branding
techniques by different companies in the industry. Providing different hospitality services
with the name of one brand helps a company to retain their old customer and it also give them
assurance that the service rendered by the company will not get compromised. Brand names
gives customer loyalty and if a brand is for long period the chances of more loyal customer
are always there. Globalization not only provide global exposure to a company but it also
provide opportunity to generate revenue and extract an untapped market too. Trade barriers
are also reduced with the help of globalization. Furthermore, the European countries benefit
from the products and services when the trade regarding the same occurs within the Eurozone
which in turn proves to be beneficial for the accommodation and the catering providers as
well. The organization in travel and tourism sector generally uses horizontal integration.
As there are various benefits of horizontal intergration such as: TUI can capture large
market share, bigger base of customers and organisation can generate higher profits. It has
various disadvantages such as: the problem of regulatory scrutiny can be faced by the
organisation and the flexibility and transaparency can be reduce from the business operation
of TUI.

As there are various advantages of verticle integration such as: it is helpful for the
TUI to make positive differentiation and the assets investments can focuses on specialization.
As the market share of compny will increase and organisation will able to produce quality
products. There are various disadvantages of it such as: it will creates unforeseen barriers For
TUI while entering into new market and there is huge investmet is require and if comapny
does not have sufficient funds than verticle intergration can not be sucessful.
TASK 3
3.1:Develop a rationale
If a company had to develop rationale for their business they need to analyze the
target market first. By target market we mean the public who are really interested in the
goods and services of the company and company sees a scope of doing business with them. If
the company can analyze the target market and the necessary services a company can place
for that target market, rationale can be prepared after that. In this regard the destination of the
hotel must be identified as the location can impact over the cost and the resources along with
the type of holiday destination. As the company deals in travel and tourism the target market
therefore they use to develop special packages according to the age group for example, for
old age by reducing the price up-to 60% and they use to distribute templates so that they get
easily understand the message. Similarly for youngsters they add benefit of adventure visit
and for student they give educational trips that help to gain knowledge about different
cultures. In case of children will be considered in the target market as by tempting children a
company can convince the parents also for travel and tourism. As travel and tourism is done
out of hobby, for refreshment, for luxury basis. The target market in that case can be
premium customers who are high income group people and are ready to spend money.
Company is mindful of that in most the cases travel is done in group. A group can be of
friends, family or in any form so targeting is done by taking that into consideration as well.
On considering new location within UK the hotel can approach the target market
through the analysis over the demographic factors along with socio-cultural factors within the
region. Proper location will be efficient for attracting both inbound and outbound customers.
Various lucrative offer can be offered by the company. They can offer free breakfast in hotels
or some discount for customer, so that they can gather the attention of the customer and by
that more application can be received by the company as the interested customer may
increase because of those offers. Different offers in the transport like airlines and other

facilities will be efficient to attract outbound tourists. The local tourists can be approached
with business facilities like conference, banquette etc. Some benefits are given to those
customer who goes for a complete package of the company which includes hotels, air tickets
which means a complete package.
3.2: Develop a plan for a hospitality business including the operational requirements
Customer satisfaction or services is one of the most important component which
needs to be taken care by the company. The information are provided to customer on time so
that no conflict is aroused and customer loyalty can be maintained. The market that is
targeted is of premium customer as travel and tourism is done by the people who have a
purchasing power so company try to entertain those customer only. As they know they are
ready to spend money so the services which are provided to them is on premium basis. As
they are providing service to the people who have purchasing power, they should not
compromised in the services provided by them. As one thing is clear money is not a problem
in this case so they should not think of compromising in any case and try to provide what is
best for the customer. Company should make sure that proper training is given to the
employees also. As employees are the face of the company so they are carrying the goodwill
of the company. Any fault from their part may hamper the company, so company should train
the employee regularly. The main focus behind the training is development of employee, so
that they know the best way to handle any tricky situation and they know how to satisfy
different types of customers and build relations with them. A healthy relation with the
customer is a favorable situation for any company as it also spread word of mouth and it may
result in new customers for the company. Funding for the same can be raised by the company
through shareholders, company can put their money also whichever they find feasible or
possible at that moment of time. If s business don’t want any hindrance in the operation they
should opt for licensing in various services provided by them. The ambiance should be such
which attract customer and that can be done with creative measures and some innovation.
Health and hygiene is also one factor that should be taken into consideration by the company.
The whole reason behind an attractive ambiance is that customer should choose the company
over their competitors. As the company is well aware about that tourist from different places
will come to avail the services, so culture of the company should be of reflective nature and
tourist should feel comfortable and that can be made possible by implementation of their own
culture. Providing various services with a brand name may help a company as the loyalty of a
customer to a brand can be attained. The external environment should also be taken into

consideration as the tourist should get all the facilities they thrive for and that can be made
possible by giving them a good exterior also along with interior. Promotions should be done
so that the market know about the company and the services provided by the company.
Staffing by functional areas: there are different functional areas within the hotel such as:
 Management team as well as managers
 Finance department
 Line managers
 Housekeeping department
 Front line
 Kitchen staff such as chef
 Security department
 Conyence and transport
 Area management
While doing staffing also all the factor should be taken into consideration. Proper
background check of the employee should be done. All the amenities should be given to the
employee so that they are in good space and while doing their job they are giving everything
to it. Employee should be recruited from various part of the world so that the company can
get the cultural diversity in their management too. As the company had to handle the
customer from different backgrounds, recruitment should be done taking that point into
consideration. Qualification required for a particular job should be checked with the applicant
and they should be interviewed accordingly. It is obvious that different type of qualification
are required for different employees so that should be maintained properly. Company should
make sure managerial experience is utmost for hotel job and a person who have that only
those would be qualified for such type of jobs. All the conflict related to the season staffing
should also be taken care by the management as in travel and tourism business staffing are
also done on basis of seasons. Staff should be sophisticated and should know how to carry
themselves in front of customers.
Plan for a hospitality business
Operrations: As the operations of TUI has spered in different nations and it provide
tour and travel facilities to all tourist and also arrange the accomodation so that consumers

feel comfortable. To manage day to day operation the staffs plays a vital role and perform as
per the requirement.
Design: After the intergration the design has been changed so that with the new name
people can recognise the company and know what are the facilities are provided by it. As Tui
make integration with First Choice Airways so that name can de updated and it will help the
organisation to attract more number of consumers and earn higher revenue.
Staffing: It is very importnat for company to hire proper skilled and trained staff that
help to run business activity in proper manner and provide best services to their entire
visitors. The manager of TUI have hire various member for differnt position such as,
receptionist, cleaner, waiters, manager etc. Staffing will be considered as major part of
presentation at customer side communication.
Supply: In hotels, customer mainly visit to relax and feel the comfort, thus it is the
responsibilities of manager of TUI to make sure that product and services must be supplied in
perfect manner on the actual demand of customer. They make sure that servioces are supplied
in best suitable manner that so that customer get the actual value fro their money.
CONCLUSION
As from the above report, it has been concluded that it is required for the travel and
tourism business to fulfil the requirement of consumers by providing quality products and
services. As hospitality industry and travel and tourism business are interlinked with each
other. For the growth and success of a company integration is very helpful. Because strength
will be double which provide help the corporation to maximize its profits and expand its
market share. As integration affect the industry in positive way because it help the
organisation to increase its profits and achieve the objectives as per requirement. To
accomplish the goals it is important to take effective decisions which are linked to the target
market. It is important to develop business organisational structure in relation to the human
resource allocation.

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