This is a solution of UK College Hospitality provision assignment which discusses the role of hospitality industry within the travel and tourism sector and how to develop hospitality business.
The service industry which includes the Hospitality sector, IT & Software sector, Aviation sector, Retail Sector is emerging rapidly. The main reasons for this shift are changing lifestyles and choices of the people. The service industry is considered to be different from the routine industries which normally offer goods which are in tangible form. The service sector offers deliverables that are intangible. Under these circumstances, the concept of service quality acquires tremendous impetus. One of the important features of the service industry is product differentiation and product customization as the needs of the customers are also different from person to person
L1- Understand the role of the hospitality industry within the travel and tourism sector
P 1.1 Discuss the interrelationship between hospitality and wider travel and tourism
Hospitality sector often includes hotels, restaurants and theme parks and includes offering services like food, drinks, accommodation and other associated services for the relaxation and rejuvenation of the customers like table tennis, swimming, spas, salons, gyms etc. The main aim of delivering these services is to ensure a satisfied customer by offering him quality services.(Barrows, 2011). On the other hand tourism involves the travel of a consumer from one place to another. This travel may be for any purpose-recreation or business and is for a well-defined limited period of time. This often includes car rentals, railways, airlines, star cruises, travel agents and tour operators.
The hospitality and tourism are said to be interrelated in order to provide better services to the customers and lead to better customer satisfaction as all the services are obtained by the customer at a single point of contact. Both the sectors work in co-ordination with each other with a common goal which is to generate more employment opportunities as well as help in the economic development of the country. Globally the travel and tourism industry offers around 255 million jobs and contributes around 9% of GDP to the economy of UK. The government is instrumental in implementing the policies regarding the travel and tourism legislation but the private sector organizations are required to run hotels, airlines, airports, cruise lines, travel agents and tour operators to make use of the tourism potential of the country.
The interrelationship between hospitality and travel and tourism industry (Pizam, 2009) is as follows:
Source: (Pizam, 2009)
To further analyse the integration between hospitality and travel and tourism, two hospitality organisations have been selected for this assignment. They are Hilton Hotels and Imperial London Hotels.
Hilton Hotels and Resorts is a chain of hotels worldwide and is a well-known brand in the industry with over 92 years of experience. The hoteloffers luxurious and stylishservices to their customers. The hotel is recognized for its innovative approach to products and services by offering smart designs, innovative concepts and authentic commitment and hospitality to the customers. The Hotel has its presence in more than 500 locations in about 80 countries. The rooms of the hotel have a functional design with thoughtful amenities with the option of customizing your room as per your choice before you check in the hotel with the “Request upon arrival option”.
Apart from accommodation Hilton Hotel also offers food and beverages and several other facilities like beauty salons, spas, gyms and leisure activities for kids and others depending on the star rates of the hotel. The hotel also offers some services especially for the business customers such as meetings rooms, conferences and the latest technological developments. The prime focus of the hotel is on the satisfaction of the customers and ensure that the entire experience of the customer from check in to check out is completely enjoyable.
In order to provide a full array of services to its customers, the Hilton hotels are in integration with other hospitality organizations. The Hilton Hotels and resorts have joined hands with different airline companies like British Airways, Easy Jet and Ryan air. The hotel has also collaborated with travel agencies and tour operators such as Thomas Cook, My Travel, TUI, car rentals and other organizations (Middleton, 2012).
The Hilton Hotels are often located right in the city centre and close to the airports. For example, in London one hotel is located near Heathrow Airport and another one near Gatwick Airport. Such a strategic location provides an opportunity to the Hilton group of hotels to enter into a healthy collaboration with other organizations which provide customer services in the airport. The Hilton group of Hotels can also have a good interrelationship with the airlines and car rentals companies. The Hilton Hotel near the Heathrow Airport offers a direct access to the airport terminal and also gives a fully equipped business centre for its customers and facilities like spa and an exclusive lounge with intercontinental influences.
The second hospitality organisation that has been selected is the Hotel Ibis at London City which is located in the financial heart of the city. The hotel has easy access to the Liverpool station and is located near many corporate and business buildings. The Ibis hotel is both a business as well as luxury hotel and offers many facilities to the customers. The hotel has a total of around 350 rooms. The rooms are neat and clean, well equipped with modern facilities like satellite television, Wi-Fi, functional bathrooms etc. The hotel offers a pleasant stay and it is 100% smoke free and there are smoke alarms also for the safety and security of the customers. The hotel also offers facility of a friendly bar for relaxation. The hotel also has a restaurant called L’Estaminet with an excellent ambience and extensive menu with French as well as international cuisines. The hotel also provides safe deposit box, fax machine and a special multimedia access. The hotel offers a unique quality policy of 15 minutes. If the customer is dissatisfied with the service offered, he may inform at the reception. The company promises that the problem shall be rectified in 15 minutes and if the hotel is unable to do so, they do not take money from the customers. Special facilities are also available for the disabled like access to ramps, wheelchairs and around 20 rooms especially for people with reduced mobility.24 hours service facility is available for all the customers.
Hospitality and travel may hence be considered to be incomplete without each other and it can also be concluded that the integration of hospitality with travel and tourism makes the business more profitable and attractive. The services of Hospitality put together with the service of travel and tourism make the experience of the customer more enjoyable and satisfying.
A customercannot enjoy the travel if hospitality services like food, stay, leisure activities are not present. Hence, the hospitality sector basically ensures that the customer has an overall satisfying experience while travelling which includes a clean living environment, hygienic food and good leisure activities for complete relaxation of the body and mind. Similarly, a customer cannot fully enjoy the hospitality experience of the customer if travel and tourism services are not provided (Middleton, 2012).
There is complete integration of systems in the Hospitality and Travel and Tourism service sector. The services of both these sectors are often collaborated together by one single organisation to ensure complete satisfaction of the customers. This includes providing special package tours to the customers thatincludes travel, stay and food arrangements as well as leisure activities and sightseeing (Ritchie, 1994). The rate of the packages depends on the place, season and the total number of visitors visiting the place in a group and is usually decided beforehand.
P2- Understand the impact of integration within the hospitality industry
P2.1 Analyse the implications of integration to the hospitality industry
Integration means combining activities of different departments or merger of two or more companies. This strategy is often adopted by companies when they plan to achieve economies of scale to decrease the cost of operations. Integration also helps to increase the profit margins by performing all the actions in house instead of outsourcing some operations as this helps to save money. The strategy of integration also helps to increase the market share by increasing the presence of the brand in the international market. Integration may be classified as Vertical Integration or Horizontal Integration.
Vertical Integration is the process when a company buys its own suppliers or buys another company in the chain of distribution. This results in lowering of the operating costs and hence ensures maximization of the profits. For example hotel Hilton has its own travel agency to ensure that the hotel may offer more services to its customers to ensure customer satisfaction and increase its own business as well.
Horizontal integration is the process when two companies from relatively different industries form a bigger organisation. This leads to an increase the overall number of customers and increase the profitability because of achieving economies of scale. Example would be if Ibis hotel purchases another hotel XYZto increase the total base of customers and hence the profitability and also increases the market shares of the hotel in the overall industry.
The implications of integration in the hospitality industry are as mentioned below:
- One of the most important implications of integration of hospitality sector with the travel and tourism sector is that it helps in achieving the economies of scale. Economies of Scale basically means that as the scale of operations increase the overall cost of operations decreases which is turn helps to increase the profit margins and the overall profitability.
- The concept of package deals has recently become more popular. This is an outcome of the integration of hospitality with tourism. The package deals are considered to be beneficial for both the business as well as the customers. It is beneficial for the business as it gives the power to control the rates of the services being provided and also attract more number of customers, hence increase the profits for the business. The package deals are beneficial for the customers as they get many services at the same point of contact and at highly competitive price. So this offers both economy as well as convenience (Middleton, 2012).
- Integration also helps in extension of the business on an international scale. For example Ibis Hotel can acquire another hotel in a different country. This extension will not only help to increase the total customer base but also increase the international presence of the hotel.
- Integration in the hospitality industry also leads to standardisation. The same service experience is offered to all the customers irrespective of the place of visit. For e.g. all Hilton hotels will have the same structure and design of the building with the same ambienceand same theme of the restaurant. This helps to maintain the overall quality of the service and maintain the image of the brand.
- Integration in the hospitality sector may sometimes lead to dissatisfied customers also. This can happen if the basic policies and procedures of the two companies are different which usually lead to conflicts in the management. These conflicts can go to the extent of affecting the present business as well as the level of customer satisfaction.
- Integration in the hospitality sector is also has an impact on the market competition. The integration between two large organisations can vanish the smaller competitor as the smaller competitors will be unable to match the quantity as well as the quality of service being offered by the larger players.
- This can also cause unemployment as a number of employees in the smaller organisations will not have their jobs when they close down.
P2.2 Discuss how integration has affected a hospitality business
Integration in a business can be horizontal or vertical integration and any kind of integration has an impact on the overall business. The impact may be negative or positive. The same is true for the hospitality business as well and been discussed in detail below. The positive impacts of integration on the hospitality business have been discussed first (Ritchie, 1994).
- Economies of scale: Integration of business in hospitality helps to attain economies of scale. Achieving economies of scale help to decrease the operating costs and hence increase the overall profit which helps in increasing the volume of business as well as the market share. Volume of business may be increased by increasing the customer base or increasing the number of services or providing service at many places even across boundaries.
- Better Access: The integration of business also ensures a better access to a wide range of services at a single point of contact for the convenience and satisfaction of the customers.
- Standardisation: Integration of business also ensures standardisation. The organisations often adopt standard operating procedures after an increase in the scale and area of operations increase with integration. These procedures make sure that the same experience of service is provided to the customers every time theyvisit any of the company outlets anywhere. This helps in offering better quality services to the customers, maintains the basic essence of the brand and also ensures complete satisfaction of the customers.
Integration is associated with some negative impacts on business as well. The same has been discussed below:
- Unemployment: As a result of integration, the struggle for survival exists between the bigger players only. The smaller players gradually shut down their business and vanish away as they cannot match the quality and quantity of products and service being offered being the larger companies. This also leads to an increased competition amongst the larger players. The shutdown of the smaller firms leads to increased chances of unemployment.
- Conflicts: There are chances that the objectives of the organisations entering into integration do not match which leads to conflicts and delay in decision making.These kinds of conflict leaves a deep impact on the overall experience of the customer while his association with the hospitality organisation.
P3- Be able to plan the development of Hospitality Business
P3.1 Develop a rationale for a selected project clearly justifying decisions linked to target market
The hospitality industry is a vast as well as growing tremendously. It seems to be a very profitable option for starting up a new venture. Entering into the hospitality sector offers the choice to explore various options to venture into like hotel, restaurant, clubs, pubs etc. The given task is about developing a rationale for hospitality project mentioning its operation requirements, allocation or managing human resources and deciding the structure of the organisation.
Before discussing the concept of developing such a project, it is first important to understand the basic elements to be kept in mind while setting up a project in hospitality sector like a holiday resort. This has been discussed below:
- Developing the general concept of the business which includes deciding the vision.
- Using marketing research as a tool to decide the target market keeping into consideration various socio-economic and demographic parameters. (Olsen & Roper, 1998)
- Deciding the location of the holiday resort and also the size of the market.
- Evaluating the total capital required and the source of capital required.
- Deciding the products and services which will be offered to the customers based on the customer needs and the competitor products and services.
- Planning the human resource requirement and marketing strategy for the resort.
- Deciding the price structure of the services being offered.
Plan: The basic plan of the project is to start a Holiday Resort in London. This option has been chosen because London has a large number of visiting tourists because of many places of tourist interest with excellent scenic beauties in London. The resort will cater to the needs of the visiting tourists as well as the people living in London who have hectic lifestyles and just want to plan a weekend vacation with the family to relax and rejuvenate them. The main objective of the resort is to make the stay of the customers a memorable one by providing complete quality experience to the customers, thereby creating loyal customers in the process.
Market Research: Market research is important before venturing into a new business proposition as a certain degree of risk is involved. The setting up of a resort requires a massive capital investment. It is important to do an in depth market research for estimating the market size and customer expectations before making the final investment. Primary research with be done with the help of surveys and questionnaires for a sample set of 1000 people without any biases of gender or age. The main objectives of research would be to assess the total market size and analyse the various target segments of the resorts. This research will also help us to study the customer’s basic expectations from a holiday resorts and also give us an idea about the amount of money the customers are ready to shed for staying at such a resort.(Veal, 2006).
Target Market: The basic idea of the resort is to have a holiday destination for visitors as well as people in London. Hence the main segments which may be included as a potential target for the Holiday Resort are Families interested in going for vacations, Newly wedded couples, college goers for trips, travellers and business organisations for meetings and conferences.
Location:The resort shall be located on the outskirts of the main city. This is mainly because a resort will need a huge premises and it will not be possible to arrange such a space within the city. Also the customers who plan to spend time in a resort want to mainly want relaxation away from the hustle and bustle of the main city so that they can relax at their leisure.
Size:There will be a total of 60 rooms in the resort which will be centrally air conditioned with attached washrooms with all modern facilities, a double bed, study table, sofa and LCD TV. Then there will be another 20 deluxe rooms which will have an additional balcony for a better view. In addition to this there will be 10 deluxe cottages which will have two rooms with double beds, a kitchenette and a living area with extra modern facilities and super interiors for a rich exotic feel.
Culture: The name of the resort is Royal Resorts. The essence of the resort is to provide a royal treatment to the customers by giving them luxurious services. Special care is taken for cleanliness and hygiene and the staff is qualified and well trained to tackle any situation.
Products & Services: The services which the resort offers include neat and luxurious rooms with air conditioners, Wi-Fi, LCD Televisions etc. There is also a facility for laundry and 24 hrs. room service. Special evening activities are organised specially for the entertainment of the children like magic shows and gaming zones & rides are also there. For the relaxation and rejuvenation of the adults, the resort has a swimming pool, gym, spa centre and an in-house bar. There is also a library of books and movie DVDs for the entertainment of the guests. The resort has an exclusive restaurant which offers a huge variety of ethnic and delicious cuisines.The resort also provides the facility of car rentals and special airport pick and drop facilities on prior request.
Investment: The source of funds shall be partially from the owners and partners of the resort and partially as a loan from the bank.
Marketing: The marketing of the resort shall be done mainly through the internet. In addition to this advertisements in the newspapers and travel magazines shall also be done. The customers can have the option for customising their package as per their needs. Such special packages help the customers to get value for money for their own preferences. (Kotler, Bowen, Makens, 2010).
P3.2 Development a Plan for Hospitality business including the operational requirements of the business’ organisational structure in relation to human resource allocation.
Handling the operations of a resort can be a challenging task. The operations should be managed in way so as to ensure maximum profits with complete customer satisfaction. Since the resort is a part of the hospitality segment which is a service industry, the most significant element is ensuring complete customer satisfaction is the service providers or the employees. The employees are considered to be the biggest assets for any service industry. Hence the recruitment and selection of well qualified staff is necessary at the resort to ensure complete success. Special training programs may also be planned for the employees to raise their standards of quality up to the value systems and cultures of the resort (Riley,. 1996). The staff members must have a good personality and excellent communication skills. In addition to this, the organisational structure of the resort is another important element. This is to ensure that there is proper delegation of roles and responsibilities for better accountability and performance.
The organisational structure of the resort may be explained as:
The main role of the General Manager is to coordinate with all department heads to ensure that ensure that the resort is complying with the organisational objectives. He also needs to make sure that the resort is running as a profit centre without compromising on the quality and there are many satisfied customers of the resort (Bull, 1991).
The Front Office includes the reception, security and bell services. The services offered include welcoming the guests, delivering their luggage to the respective rooms, taking care of the mail and information services of guests and providing extended services like providing information and directions, making ticket bookings and arranging sightseeing.
The Food and Beverage Manager ensures that quality and variety food and drinks are served the guests and they are completely satisfied with the services. He also looks after designing of the menus for buffet. (Kay & Russette, 2000).
The House Keeping manager is mainly responsible for the cleanliness of the resort. He basically looks after cleaning of the rooms regularly and on check out, delivery of clean rooms to the customers while check in, laundry and room service.
Engineering and Maintenance looks after the maintenance and repairing of the resorts. This can include the furniture, plumbing, electronic or electrical fittings.
Finance and Accounting manager is responsible for maintaining the book of records and handling petty cash at the resort. The responsibility of purchase of the routine needs of the resort also lies with this department.
Marketing Manager: The marketing manager is responsible for the promotion of the resort and also designing special packages and plans as per the customer needs.
Manager doing Human Resource Management plans the recruitment and selection especially during seasonal changes in demand and also develops training programs for the staff as per the requirements. He also takes care of the staff pay, appraisal and leave records.
- Barrows, C. W. 2011. Introduction to the hospitality industry, New York, John Wiley and Sons.
- Cook, R., HSU, C. & Marqua, J. 2013 Tourism: The business of hospitality and travel. London Prentice hall
- Kay, C., & Russette, J. 2000. Hospitality-management competencies identifying managers' essential skills. Cornell Hotel and Restaurant Administration Quarterly, 41(2), 52-63.
- Kotler, P.,Bowen, J.T.& Makens, J.C 2010. Marketing for hospitality and tourismLondon Pearson
- Olsen, M. D., & Roper, A. (1998). Research in strategic management in the hospitality industry. International Journal of Hospitality Management, 17(2), 111-124.
- Pizam A., 2009, International Journal of Hospitality Management, Vol 2, Publisher Elsevier
- Powers, T., & Barrows, C. W. 1999. Introduction to the hospitality industry(No. Ed. 4). John Wiley and Sons.
- Riley, M. 1996. Human resource management in the hospitality and tourism industry (No. Ed. 2). Butterworth-Heinemann Ltd.