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Hospitality Provision in TT Assignment - TUI AG
Diploma in Travel and Tourism
Unit Number and Title
Hospitality Provision in TT - TUI AG
Through this hospitality provision in travel and tourism assignment TUI AG hospitality industry and along with it different concepts and facts are described. The development and increasing popularity of the business in travel and tourism sector is dependent on the roles and the responsibilities of the hospitality sector in the service offerings. With the development and the growth in the hospitality sector the business of tourism has been generating the sustainability in the business. By choosing the Hilton Hotel as the Hospitality organisation the hospitality and the roles and responsibilities of this sector in the travel and tourism business are elaborated. Through this report the interrelationship between the wider travel and tourism businesses and hospitality is discussed. Different implications of the integration in the hospitality business has been analysed through considering the business approaches and integration within the business of TUI AG. The impact of the integration on the hospitality has been evaluated through this report. Later a rationale of a selected project has been developed with the justifications of the targeted market and a plan along with operational requirements of the business in relation with human resource allocation has been developed.
P1.1 Discuss the interrelationships between hospitality and wider travel and tourism businesses
Hospitality means the reception and the entertainment of the guests, visitors, or the strangers with independence and good will. The management has the role and the responsibility to organise, staffing, directing and facilitating, controlling manipulating and leading the staffs in this with the purpose of accomplishing the goals. The hospitality provision has been made with distinct services, one is to provide proper accommodation to the people and the other one is to provide proper food and beverage services. Considering the scope of the hospitality provision it has been consists of Travel, logging, assembly and event management and restaurant and management services and recreation. The products of the hospitality are accommodation, food & beverages, business services, leisure facilities and spa & wellness. The products and the services of the hospitality industry have certain characteristics such as:
- Products are intangible and consumable
- The business hours are not fixed
- There are shifting working times within the services ()
The hospitality provision has been consists of different hospitality providers such as hotels, guest houses, campo sites, centres for holiday etc. Another part of the hospitality provision has been considered as the visitor attractions, transport providers, leisure outlets, conference facilities etc. Hospitality sector has the significant role within the travel and tourism business. The travel and tourism has been gaining the increasing popularity which has been depending on the services provided by the hospitality sector. This has been increasing the importance of the hospitality sector within the travel and tourism business by influencing the overall profitability and the efficiency of the travel and tourism business. The hospitality has been based on the nature of the services. The services can be defined as the activity and the benefits which can be offered by another and are intangible in nature. The services are consists of a range of activities. In recent days the importance of the hospitality industry has been increasing with the development within it as more and more travellers are travelling and becoming more aware of the standards as well as the standards of the services which has been provided or offered by the hospitality industry. Considering the facts and the figures the hospitality industry has been characterised through industry structure which is composed by the relatively small number of multinational enterprises. Within this sector there are many small and medium sized organisation and business. (Gursoy, 2014). This industry has been considered as the heterogeneous in nature with different identifiable sectors which have been consisting of specific needs. The sector of hospitality is a widespread sector which is spread from cities to rural region. The Europe has been claiming the largest hospitality capacity as it has 36% of the total worldwide lodging. The hospitality and its growth has been estimated as the 6.3 billion in the establishment.
The hospitality industry has been consisting of different stakeholders who are mainly focused on the customers and through positive image establishment the popularity and the positive awareness among the customers can be built which are necessary for the survival in the competitive market. Through efficient services the pleasure within the mind of the travellers or customers can be induced through different processes of the hospitality from the arrival to the departure along with the comfort staying. (Hudson and Li, 2012)
On this regard the travel and tourism industry and the hospitality industry are interrelated the travel and tourism industry has been dependent on various subsectors which also include the hospitality provision. The products and the services which are provided by the travel and tourism sector has been dependent on the hospitality provision development and growth on the success perspectives. The success factors of both the industries are interrelated to the success of another. The tourism industry develops their services and products on considering the development in the products and services of the hospitality industry, such as the food and logging. Apart from these the travel and tourism industry is also dependent on the hospitality secondary providers such as the attractions of the destinations, transport facilities of the destinations. (Medlik, 2012) With the development of these features of hospitality services the travel and tourism can develop their products. The hospitality sector has been providing the integral parts of the tourism business. The Hilton hotel has a large chain in hospitality sector. The hotel has been placing their services in different parts of the world with efficient services and standards of quality. With the presence of this hotel the travel and tourism industry can be able to include high quality offerings of lodging and food in the travel services. The hotel and the services of the hotel along with the quality are the major concern for the travellers. By placing quality and standards in the accommodation and also in the food and beverage services the hotel is contributing in the success of the travel and tourism product and services. With the expansion and development of the business the hotel and the hospitality industry has been boosting the service quality of the travel and tourism business. (Medlik, 2012)
Transport, food and accommodations are the basic requirements of the travellers while making trip. By providing the efficient services of these requirements the tourism industry has been ensuring the relaxation and leisure which are the most common demands of the travellers by having joint effort with the hospitality providers. With the globalisation the customers are well aware of the hotels, brand names and also the attractions of the destinations. In order to satisfy the customers the travel and tourism has to dependent on the services of the hospitality business. With the efficient services the satisfaction of the travellers can be approached along with the loyalty. This also needed in enhancing the revenue generation for both the hospitality and the tourism sector. (Osborn, 2013).
Having good relationships between the hotels like Hilton hotels and travel agencies like Thomas Cook has been important element for the success of hotels and the Hilton Hotel depends upon the packages of the travel operators. The success of the Hilton Hotel and Thomas Cook relies on the trust, commitment, coordination, quality of communication, participation, use of constructive resolution techniques, information exchanges, relative dependence factors etc. Through the communication between the two organisations they tend to influence and control the exercises of accommodation and the supply of the travellers. With better accommodation and facilities the Hilton Hotel tries to provide better experiences to the travellers who are provided by the Thomas Cook. Thomas Cook works along with the Hilton Hotel by promoting their services through the packages and their websites. (thomascook.com., 2016). Thomas Cook acts more like business partners with Hilton Hotel rather than intermediaries between the travellers and hotel. Through providing proper information to the customers the travel agents like Thomas Cook attracts the visitors towards purchasing the services of Hilton Hotel along with their packages. Proper information about the travellers and visitors and their requirements are interacted through proper communication methods between Thomas Cook and Hilton Hotel.
P 2.1 Analyse the implications of integration to the hospitality industry
Integration has been defined as the process which has been taken by the organisation in order to extend the existing business and having benefits from it through a specific product and services. The integration has been the repeated occurrence of the services or the business. The organisation must have the understanding of the activities which are associated with the integration. Through this strategy the organisations tend to extend their product line which can be related to the previous business or can be unrelated in order to increase the profitability aspects within the business. The organisation TUI AG was a Prussian Mine and foundry company which has the operations related to the mining, salt works and smelter business. The organisation has shifted their business in tourism and shipping business. They first invested 30 percent inertest in the travel and tourism organisation Hapag-Lloyd. In the end of the 1990s the organisation has placed its tourism business successful in globalization market the organisation also has 300 hotels in hospitality industry more than 150 aircrafts along with 5c airlines are also included within the business as the largest airport operators within Europe. (case study, 2016)
There are two types of integration one is vertical and another one is the horizontal integration. These integrations are related to the hospitality industry. The concept of the vertical integration is related to the expansion of the business in different areas but continuing the same production path. Through this strategy the organisation will be able to reduce the cost with the improvements by reducing the expanses in various operations within the business. It is helpful in increasing the profitability of different businesses. The horizontal integration has been intended in the creation of the strategy through which the organisation can have expansion in business by acquiring other organisations or shares of them which are operating in the similar business path. The TUI AG has obtained a major market share by buying the Touristic international, 30 percent of the interest of Hapag-Lloyd, 50.1 Percent stake in UK Thomas Cook. (case study, 2016)
Through the vertical integration various organisations are trying to have their control over different processes of the hospitality industry along with different services. Different procedures are developed by the organisations in order to place their business in different sector of hospitality. Various processes are developed by different organisations but managed by a single management system in the integration of hospitality provision. TUI AG has different areas of business within the hospitality services. The businesses are vertically or horizontally integrated within the singular form of management in order to have control over the wide range of business processes. This has been giving the direct control of the parent organisation on the subdivided companies or different service providers. (Sigala, 2016). Through the integration the customers are skilfully approached with organised facilities and a wide range of hospitality services and all the levels are also skilfully managed. Through mergers the vertical integration can be done such as the airlines organisations are merged with different travel and tourism business. Through this approach the TUI organisation is able to place their business in diverse market and also increase customer satisfaction through offering efficient leisure facilities under one management system. (Panyik, and Anastasiadou, 2013)
In the horizontal integration the airlines organisations tend to acquire the business of the hospitality services or travel and tourism business. Through this the expansion of the bigger business can be vast and the benefit of the brand value can be obtained by the smaller business. By analysing the growth of the hospitality and the tourism services the organisation TUI AG has placed their presence in the airlines as well as in the travel and tourism sector through acquiring and also merging and also in the hospitality provisions. (Vanhove, 2010).
P 2.2 Discuss how integration has affected a hospitality business
There are different examples of integration which has been seen within the hospitality sector in recent days. The hospitality has been the sector which has different offerings and different products which are mostly intangible in nature. The organisations of the service industry have been approaching the strategies of the integration in order to have efficient relationships within the business sector on promoting the offerings. Through the vertical integration various processes can be taken in control by the organisations along with preparing different kinds of products for the customer’s satisfaction. Through this control the organisation tends have better operations and business as they can be able to place different products and service qualities through improved way of placement. Through the integration of both ways the organisations which are having the direct control over all the services can be able to place single management on different services and have the ability to place the services with efficient manner. (Blanke, and Chiesa, 2013)
Considering the future trends more prediction has been made on the closer alignment within the marketing in the revenue management. Integration within different operations is profitable for the organisations in hospitality as well as travel and tourism business. Through vertical integration organisation tends to place the integration vertically under same authority. With the horizontal integration the business and the services are provided by different providers which are in the merger with the parent company. Through the integration the hospitality sector is not only facing the expansion of the business but also placing efficient relationship among different service providers and different stockholder of the sector. Different factors are associated with the travel and tourism and hospitality business. These factors are affecting the demand and the supply of the business. Different economic, legal, integration, technological factors are imposing over the performances of hospitality provision. The trends are increasing the completion within the market and the instability issues within the market. (Heung, Kucukusta, and Song, 2010) The organisation TUI AG has been merged with different tour organisation and the acquisition the hotel and tourism organisation along with the acquisition of share has been increasing the profitability of the business. Through the integration the pressure of the stakeholders as well as the pressure within the organisational factors can be faced with efficient strategies. (Bednarska, 2013)
With the growth of the hospitality industry and its demands along with the increase of the travel and tourism industry services the integration within the various services of the hospitality has been increased. Through the integration the organisations like TUI AG can approach the customers with various budgets and various facilities. The horizontal integration has been helpful in this regard. Through this integration the organisation is placing their presence on different locations or destinations. Through using the brand name the smaller providers are also having benefits and the brand also get the opportunities in attracting diverse travellers. (case study, 2016)
As the organisation has been a largest services provider in the airlines the brand has been a profitable measure for placing their presence within the hospitality. This type of integration has been generating more revenues for the organisation. Through this integration the organisation has been able to approach diverse business fields such as airlines, hospitality and also tourism business. Through the integration strategy the organisation has been placing the control over these businesses with efficiency and also on the value chain. (case study, 2016) Through the integration the organisation is having access to commercial alliances and long termed management over different businesses. Through the integration the organisation can have more support on the financial basis form the investment in different areas as well as increasing the popularity in wider market. (Heung, Kucukusta, and Song, 2010)
3.1 Develop a rationale for a selected project clearly justifying decisions linked to target market.
In order to develop a rationale for the chosen project the target market should be analysed. By clearing the outline of the target market the project proposal can be developed. Considering the business Hilton Hotel chain the profitability of the business can be defined through the current and emerging trends within the hospitality services as well as approaching them with efficient strategies. In order to understand the current trends the particular market segment should be targeted. Through the analysis on the current market trends the new project can be developed with efficient manner. Particular destination can be approached for the new project placement. On considering the project goals the destination can be chosen. In this case placing a new hotel chain can be taken consideration. Through analysis on the location with demographic and geographic factors the project rationale can be developed. Considering the emerging destinations like Costa Rica the placement of a new chain of hotel can be considered. The location has different visitors’ attractions which can be profitable for the hotel chain. Through this approach the organisation can be able to place its presence in an emerging business market as well as extend the operations. There are different small and medium hotels which can be considered as the opposition for the business and also place a wide range of competition. As Costa Rica has been an emerging destination the travellers are considering value services along with different ranges of prices.
The low cost hotel services are most effective within the hotel business as rivals. There are many small hotels which are offering services on lower budget as well as different facilities like bed & breakfast. Considering the customers the local inbound services can be approached with lower services in food and beverages. The outbound tourists can be approached with different facilities and range of products. The higher price of the products can place challenges in the competition. Through developing different products and services along with different discounts or offers in the services the target market can be approaches and the organisation can place itself within the market premises. Local business consumer can be approached through the conference facilities, longer stay of the professional guests, facilities or different services on room nights for visiting executives. The marketing placing also needed to be considered while placing the brand image in the target market. With the efficient strategic implementation the brand can be placed and the successful development of the products can be done.
3.2 Develop a plan for hospitality business including the operational requirements of the business’ organisational structure in relation to human resource allocation.
By considering the operational requirements within the business along with the organisational structure with relation to the human resource allocation the planning for the new business project can be done. There are different stages which are related to the development of the planning of the new project. These are:
Stage 1 development:
- Concept: the concept of the new project is based on placing an efficient business on the new and developing destination in order to enlarge the presence in the wider market. The vision of this project is to provide batter facilities and better services in the hospitality provision and create a brand image. The objectives are set and clarified to the related personnel as well as internal stakeholders on the successful approach to the target market.
- Market research: on considering the market research different areas and topics relating to the business should be concerned. The potential attractions of the location or near the locations must be measured while considering the market research. The information will be helpful to attract more tourists through empowering their purchasing power. The Costa Rica has been considered as the fastest economic tourism sector with largest foreign exchanges. In 2012 the tourism of Cost Rica has contributed 12.5% of country’s GDP. There are different attractions within the Costa Rica as a tourism destination. The current trends in the ecotourism in the destination are also a major attraction of it as a destination. Through the analysis of the journals and visiting the place before planning the survey on the market can be done. Apart from these methods the market analysis of the current trends throu8gh graphs and charts can also be used in this research.
- Target research: through segmentation the target market can be analysed. In this project the income of the people or the tourists and the current trends which are enforcing the increasing purchase of the travel and tourism products should be considered while segmenting the market. While targeting the market segment different tourists can be chosen depending n their reason to travel such as the tourists on the educational purpose, the travellers on business purpose, the tourists with leisure objectives, the inbound tourist on holiday spending etc.
- Location: Central Costa Rica can be referred as the location. As a tourist destination the location have different features such as vocations, national park, museum etc. It has been gaining popularity for hiking and other sports for outdoor recreation.
- Funding: In order to have funding or creditors the banks can be approached, as the Hilton is a large chain of hotels it has the financial capabilities in establishing a larger chain in another location.
- Products: considering the products and the services the hospitality services wit higher quality and standards will be placed. Along with accommodation the hotel will provide food, beverages and transportation facilities also. While considering the services and the products the prices and health and safety policy along with the food hygiene policy should be considered.
Stage 2 design:
- Ambience: the ambience has been referring to the inner environment of the hotel and restaurants. With creativity and innovation the ambience can be designed in order to pace the services along with customer satisfaction. On designing the ambience proper measures of the health and safety legislations must be followed by placing fire and exit procedures, alert system etc.
- Culture: culture is established on considering the existing culture of the organisation. In order to have efficient business the culture of the business should be place according to the travellers and the tourists size and cultural aspects. Diversity within the culture will attract different kinds of travellers from different geographic and demographic backgrounds.
- Brand: the brad has already placed its name on the global market as Hilton Hotel Chain.
- Interior: the interior of the hotel should be well furnished rooms and accommodation system with skilled personnel in front line and also in management system. Within the internal functions the management should also place proper checkups with regular visits to the guests. 24 hours service availability is also needed to be implemented for increasing the customer satisfaction.
- Exterior: the exterior can be referred to the area and the measurement of the building or total functional areas.
- Functional areas: the functional areas are different considering hospitality services, such as the storage rooms, offices, management departments, housing department, accommodation functional facilities, room services, and other areas associated with the hotel such as the transportation, security measures etc.
- Customers: the customers should be considered as the foreign as well as inbound tourists. As the destination has been consisting of the popularity of the ecotourism, the hotel management should considered the travellers with educational purposes, such as the researchers, educational groups etc.
- Sustainability: the sustainability can be measured with the capabilities in adapting the changing and current trends within the market of travel and tourism and hospitality industry. Through continuous development the sustainability within the most complicating and competitive market can be approached.
Stage 3 operations:
Staffing: within the hospitality services the staffing is related to the different roles and responsibility assignments in different functional areas. The skilled personnel are required within the services of the Hilton Hotel. Through employing experienced skilled personnel within the functional areas the management can have better organisational performances. In order to have better relationship within the social measures and ethical aspects local communities must be approached in recruitment. This will helpful in contributing in the national economy and employment.
Different functional areas in staffing:
- Managerial position in different departments
- Accounting departments
- Housekeeping staffs, front line management staffs
- Security services
- Transport system
- Accommodation and other development area manager
- Specialist qualifications: different qualifications are needed for increasing the performances. By ensuring the managerial qualifications the managers must be appointed. The security qualifications are essential for the security department personnel such as proper training or license over arms etc. Apart from the all the staffs should have communicational abilities and key functional areas abilities within the skills.
- Staffing issues: seasonality is a large issue in hotel business. Considering this the staffing should be planned.
- Cultural diversity: cultural diversity is helpful in approaching different guests with several backgrounds, it can also creates certain issues in the employment. By placing proper policy and legislations within the working environment such conflicts can be handled.
- Recruitment policies and procedures: through proper legislations and policy the recruitment and the employment can be held.
- Promotional activities: through approaching different media as well as different methods the promotions can be done. Through different travel magazines the promotions can be done on considering the different kinds of travellers. Apart from this social media, websites, promotional campaign can also be arranged for this purpose.
- Pricing: the pricing strategy can be developed by considering the current market price and also the brand image of the hotel.
The above report has been created on the hospitality provision in the travel and tourism business. Hospitality and the travel and tourism business are interrelated business. The services and the quality of standards within e services are the promoters of the willingness for travelling within the travellers or the visitors. As a result the customers are encouraged to purchase the travel and tourism packages. Without the hospitality services the travel and tourism sector cannot be able to place their products. Hospitality has been developed by taking different services in account such as transportations, food & beverages, accommodation, attractions of the destinations, leisure products etc. These are the influencing factors which creates wiliness to purchase the tourism services. By merging with different hospitality business the travel and tourism has been providing the products and services apart from the merging integration has been considered within the hospitality provision for placing integration with merger and acquisition in the business. Through the integration the current larger organisations like TUI AG has been placing their presence in different fields of the similar sector and having largest amount of profitability from each sector.
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Heung, V.C., Kucukusta, D. and Song, H., 2010. A conceptual model of medical tourism: Implications for future research. Journal of Travel & Tourism Marketing, 27(3), pp.236-251.
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(assessed on 13/6/16)
Panyik, E. and Anastasiadou, C., 2013. Mapping the EU's evolving role in tourism: implications of the new EU tourism competence. Trends in european tourism planning and organisation, p.189.
Sigala, M. (2016). Social Media in Travel, Tourism and Hospitality. Routledge