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Unit 1 Travel Tourism Assignment Savoy Hotel
Diploma in Travel and Tourism
Unit Number and Title
Unit 1 Travel Tourism Savoy Hotel
Savoy Hotel is the luxury hotel that is located in London and is the first hotel of the Savoy group. It provides premium quality services to the clients in order to retain them with the organization. The study identifies the role of hospitality industry in the travel and tourism sector and interrelationship among hospitality and travel and tourism businesses. The report analyzes the implication of integration to the hospitality industry and integration affects the hotel business. It develop the plan for the hospitality business that contains various stages like development stage, design stage and operation stage that help the management to set the bench mark of services for the clients in organization. The report develops the rationale that clearly justifies the decisions that are linked to the target market.
Figure 1 Hotel Savoy
1.1 Interrelationship between hospitality and tour industry
In present situation Tourism industry plays vital role in the growth of Hotel industry. Hotels provide luxury services to the clients where as tourism industry provides luxury transportation services to the customers. In United Kingdom, the business of hospitality and travel and tourism is growing rapidly because London is very popular tourist destination. Hospitality industry provides quality services to its clients and that attract the potential clients in the market. Hotel Savoy is among the successful hotels in London which provides luxury facilities to its customer. The hotel includes 268 rooms and seven restaurants. To attract the customers, Hotel Savoy provides various hospitality services like pub, spa, parks, dinner etc. On the other hand tourism organization provides quality tour packages to the clients in order to attract new customers towards organization.
The link between hotel and travel agency helps both organizations to increase the revenue. Hotel sectors provide 3 to 5 star hotels to the visitors whereas travel sector provides premium transportation services including the full service package to the customers to visit the destinations (Eid and El-Gohary, 2015). For example travel and tourism organization like Thomas Cook makes a trip for their customers to visit the different places of London. One organization will provide the accommodation and other will provide the transportation facility. Travel and tourism organizations works on different level but the objective is same to provide quality services to their customers.
The growth of hotel and tourism industry impacts the economy, as both the businesses can create opportunities for employment and support the local business. The travel and tourism industry generates revenue for the economy. Travel and tourism organization makes trip by considering the services of hotel Savoy like accommodation facility, food and lodging facility etc. The management of tour organization develops the cost plan according to services of hospitality. The additional facilities are also provided by hotel so that both organizations can develop the satisfaction level of customer. This has positive impact on the brand image of both the organization and revenue will be increased.
Hotel Savoy and Adventure Holiday has strong connection as they are developing the services and products according to customer demand that look for full services packages. The work of Savoy Hotel and Adventure Hotel is interrelated so the customer demand can be fulfilled through pooling the resources. The travel and hotel industry are interlinked with each other for providing best hospitality services to their customers according to their demand. The tourism organization also offers various packages according to their budget. The travel organization makes contact with hotel to provide services for their customers according to their needs and demand.
The hotel will try to give their best effort in providing best facilities. The services which are provided by travel and hospitality organizations have impact on the brand value and their customer retention policies. This kind of relationship is beneficial for travel and hospitality organizations that generate more profitable condition for the businesses and create competitive advantage for Savoy Hotel and Adventure Holiday. The services given by touring agency and hotel is targeted to satisfy customer demand and brings more opportunities for travel and tourism organization. The travel agency can choose the best hotel according to customer’s budget and demand (Chen.et.al.2013). By the joint operational activity like Savoy hotel and Adventure Holiday can lead to improvement in the customer services and satisfaction level of visitors and retain them for longer period of time. It can be identified that this kind of interrelationship for businesses are interlinked in terms of services and customers and their main motive is to satisfy the demand of customers.The operational cost for travel and tourism organization also reduces because the customer of hotel also integrated with them. The impact of this merger is if customer is satisfied then Savoy Hotel and Adventure Holidays objectives will be achieved and the revenue increases. An efficient hotel and tourism services and operations are capable of generating positive economic and social development whilst minimizing business environment impact. For instance the group of customers wants to have a tour to various destination of UK then they need to contact the tour organization that is offering the full services. This kind of facility is provided by the business through effective merger among or joint venture. Travel and tourism sectors are from different segment but the objective is same to increase the customer base and try to fullfill the demand of clients (Han and Hyun, 2015). These two industries not only can bring income to promote the national economy, but also solve the problem of employment. Thus the hotel industry and touring industry cannot be separated. Premium accommodation services are offered by Hotel Savoy and also help the clients to get the package as per the budget. Management tries to design the package as per the budget to the clients. It can be said that travel and tourism organizations are dependent on each other for better services and also make the services for the customers to get the services under one roof.
2.1 Implication of integration to the hospitality industry
Savoy hotel is using integration with the travel and tour organization. Integration assists the business to work together by managing the resources and the services vertically and horizontally. Business go together to work more successfully and efficiently for the fulfillment of the clients. Organization design customized architecture to merge the present resources for the enlargement and growth of organization. Integration helps the organization to achieve the management goals with the suitable coordination among the departments. For instance Savoy hotel merge the resources with the Adventure Holiday for the better allocation of the resources (Jasper and Waldhart, 2013). Integration assists the business to discover the new legal entity with the combine of two organizations. Following are the type of integration Adventure Holiday follows:
- Vertical Integration:Vertical integration helps the business to take over the other organization. It assists Adventure Holiday to operate all the deal of Savoy hotel. Vertical integration improve the efficiency of the business and decrease the cost and increase the profit margin and competitiveness in the market. The integration allows the business to invest in highly categorized assets. With this integration business can categorize the services from the competitors. It raises the share in the market and profits of the business. Another benefit of vertical integration is that is decrease the cost of operation that happens among the merger of Adventure Holiday and Savoy hotel. Integration facilitates the business to regulate the quality for the services offered. It joins the business to produce high standard services for the client’s satisfaction and regulates the image in front of the clients (Leonidou.et.al.2013).It develops the organization internally by allotting technological updation and improves the supply chain management system and generates closer relationship among two businesses. Vertical integration gives clear line of responsibility in the business over the employees and supervises high operating efficiency. As an amalgamation business can get the single unit so it is simple for the manager to check and direct activities. Business can simply allot the information about the occupancy of rooms in the hotel. Merger of two organizations help the business to grow easily and maintain the quality of the services. Through this integration manager can maintain the quality of the products and also identifies the information related to the competitors.
- Horizontal Integration: Horizontal integration assists the organization to merge the two organizations at the same stage and provide similar services to the clients. It can help business to raise the efficiency of the organization. The integration enables the business to invest the highly specialized assets. The main reason of this integration is to raise the results and expansion of the name and size of the business. Adventure Holidays can acquire the Savoy hotel and regulate its services like rooms and various other facilities. Horizontal integration increases the competence of the business and increases the client’s retention. With the help of this integration possess power, more resources from the competitors. Organization can manage the resources of two different businesses. Adventure Holiday becomes top organization with the help of this integration and also satisfies the demand of clients.This integration facilitates the business to strength over the distributor and supplier and reduces the competition in the international market. According to the case it can be assessed that merger and combination may lead to large number of business that leads harder to handle the organization and may be the reason of closing (Eid, 2015). Another disadvantage of horizontal integration is that Adventure integration can advertise the domination that is highly hooped by the government.
2.2 Impact of integration in Savoy hotel
Integration helps the business to focus on the technological factors, process that floats the business on the positive way. Savoy hotel assists the business to compete in the global market with the proper use of the resources in the organization. Following points explain the impact of integration in Savoy hotel:
- Cost integration: Through integration business spend high volume of money that is buying the business of other organization. Integration facilitates the business to decide the cost of services by the organization. For instance Savoy hotel purchases the business of Adventure holiday that results the amount of costing on the buying of business. Price integration explains the pricing while acquiring or amalgamation of organization.
- Technology: Technological integration support business to assessing the modernism in the technology and assist the business to make changes as per the demand of market. The expertise helps out the Savoy hotel to do the transaction more quickly. Technology helps the business to serve quality services to the clients and also help the business to identify the demand of customers in the market (Binder.et.al.2013). With the help of technological integration management can gain the competitive advantage also identify the innovative ways to fulfill the demand of the clients. Integration helps the organization to use the resources in more easy way and gain the competitive advantage at the global level.
- Lack of knowledge: According to the study we know that Savoy hotel is new in hospitality sector thus business has to face the problems while going into latest market segments. The business has to lack of information about the integration that is has to vertical integration and horizontal integration. The employees of Savoy hotel may face various problems related to understanding the strategies of organization and targeted customers of the organization. While going in the market with the help of merger organization may not be able to get the information about the merger organization that what is the reputation of business in the market. Lack of knowledge may lead to the sever loss in the market.
- Green policy: While merging the organization Savoy hotel may face the problem of environmental sustainability that business does not know the go green policies launched by the government. For instance business is assembling the new hotel for development of the business but the department does not know the policy like pollution control policy is regulated by the government (Oliver and Jayaweera, 2013). This kind difficulties faced by the business while entering in the market.
- Globalization: Integration may increase the globalization factor like business may face problem like lack of information about the international factors like rules and regulation of other country, regulation made by the government of particular country etc. Horizontal integration may increase to the cause for the breakdown of amalgamation because business may not be able to assess the global factors while maintaining the integration. Sometimes business is not able to assess to evaluate the policy of competitors at the international level thus of new entrants in the market (Jayashree.et.al.2016).
3.1a And 3.2 Rationale for a selected project decisions linked to the target market
Rationale :Hotel Savoy is one of the leading organizations of UK that aims to start the business in hospitality sector. The main reason of developing the hospitality organization is expansion and to beat the dependence on the hospitality business in UK. This kind of methods will assist the business to reduce the cost of hospitality charges that affects the price of different packages that are offered to the clients and also help the manager to manage the services offered to the customers. In addition to this the general idea for entering into the business hotels is to raise the profits and also reduce the dependency on the merged organization. This kind service helps the management to serve better services to the clients and also identify the demand of clients in the organization. By having the business of hotel management can easily identify the drawback of services and also assess the quality of services offered by the management. In relation to this business encourage the management to fulfill the demand of clients and also motivate them to allocate the resources properly (Hauck.et.al.2013). The constant economic situations, allocation of resources and increased demand are the important element that boasts up the Hotel Savoy to enter into travel industry.
Following are the stages that help the business to plan the luxury services to the clients:
Stage 1: The main objective of business with the project to locate the hotel in London is to retain the old clients in the organization and serve them quality services to them. The top management is focused to serve best services to the clients and try to encourage the employees to identify the needs of new customers in the organization. The plan is designed to create the good brand image of organization and also help the management to overcome the cost of agreement with the travel agency and owe the own hotel that help the organization to reduce the operation and also get the good base of customers. It will help the management to gain the competitive advantage and it will also increase the brand image of organization. For starting the business, main aim of organizations is to provide quality services to the clients and always focus on the demand, service standards and feedback of the clients over the services. The basic idea of management is to serve global services at economic cost and competitive advantage from the global competitors. The vision of Hotel Savoy is crystal clear that organization is focusing to expand the business and develop the products and services as per the current market trends (Foxall, 2014). In order to meet the vision management has done merger with the travel agency like Adventure travel that help the Hotel Savoy to meet the mission and vision.
The basic concept of organization is to propose premium quality to the customers thus they are able to retain them for longer tenure. The accommodation must be clean, healthy, service on time, security, availability of demanded food and beverages. Apart from that management should have good command over the services that help management to plan the allocation resources properly. Tour planning services facilitates the management to attract the clients and also improve the brand image of organization. At first stage management will target the people and that are looking to visit the London, for that Hotel Savoy will provide whole services in the package. For development of sustainable plan to enter in the hotel business, Adventure Holidays will consider the market research that helps the business to identify the taste and preference of clients and they are able to satisfy their demand. To collect the information, Adventure Holidays adopt the online platform that helps the management to collect the feedback of the clients and also develop the base of customers for better services and to earn more profits. It assists the management to basic detail of the customers like age, name, gender, number of visitors etc. The market research help the management to identify the current market trends like interior, exterior, views about different destinations etc (Stadtler, 2015). By analyzing the collected data as toe the market research management of Adventure Holidays will able to reach decision to evaluate the quality of service and products offered to the customers. It also helps the management to identify the pros and cons of new policy that are being given by the clients through feedback.
In order to reach the management goals management needs funds to develop the infrastructure, operational activities, staffing other services and products. Adventure Holidays get the funds from different investors and from banks as a loan. This all institutes fulfill the cash need of organization and help the business to reach the next stage (Babin and Zikmund, 2015). Apart from that organization will offer bars, disco, gym, pool to the clients in order to retain them. For business expansion Adventure Holidays it is important for the business to maintain the quality of service and provide responsibility to the employees in order to serve better.
Stage 2 : For hotel organization there are various factors that have direct and indirect impact on the business growth chances and development of brand image. Interior and exterior of the organization plays vital role to attract the clients in the organization and also help the business to prefer the Hotel Savoy for accommodation. Now to develop unique design to create different position within hospitality business Adventure Holidays will consider the following points:
- Ambiance: It is the best way to please the clients towards organization and it is the most important factor to that all the business must consider. As per the current trend all the organization are preferring the Indo- classical that is most unique concept and it is current trend. For maintaining standard and give the unique look to the organization.
Figure 2 Ambiance Savoy hotel London
- Culture: To maintain the good brand image and meet the satisfaction level of visitors Adventure Holidays give focus to local culture of UK as people will get the pleasant experience while visiting the hotel. This kind of method will provide the competitive advantage to the organization as visitor will be satisfied with the services to organization (Pitta and Franzak, 2013).
- Interior and exterior: As per the current trends, Adventure Holidays will follows the theme that contains various innovative colorful wall, antique signs, photo frames on the walls etc. for exterior organization will use the proper lighting that highlight the name of organization. Adventure Holidays use the glass that is based on the attractive glass designs.
Figure 3 Interior Savoy hotel London
Figure 4 Exterior Savoy hotel London
- Functional areas: For hospitality business it is most important for the organization to focus on the client’s desire and maintain the operation of the business. The areas of functioning of Adventure Holidays are housekeeping, quality food, good services at reception etc.
- Sustainability: The organization will offer various discount to the clients this help the business to retain the clients in organization (Truong and Hall, 2013). For new venture it is important to provide the quality services to the clients.
Stage 3: Operational activities and management is the basic element for the hospitality organization that supports to preserve the efficiency of the organization process. The major factors are that have important contribution in increasing and implementing the new venture. Adventure Holidays will also consider the different factors:
- Staffing: It is the important element that helps the business to get the advantage with qualified employee. Adventure Holidays will appoint the qualified employee in the organization that has skill to handle the clients. The employee must have skill to identify the demand of the customer.
- Recruitment: It is another process that helps the organization to select the right person at right place and also analyze their quality thus it can be said that it is the most essential process for the organization.
- Pricing strategy: Under this management decide the price of the product it is the foremost step that helps the organization to identify the return of the product that what will be the accurate price of the product and is it economic or not (Foxall, 2014).
- Promotion strategy: Promotion is another important element in the growth of the organization. It helps the business to gain the competitive advantage and increase the brand value of the organization. This strategy facilitates the organization to attract the new clients in the organization and try to fulfill their demand as per the requirement. Online portal of the organization gives best marketing to the organization and also help the business to maintain the good customer base.
Figure 5 Operational activities
The study identifies the interrelationship among the travel sector and hotel sector and also describes the dependency of both the organization behaviour on each other. It helps the organization to identify the pros and cons of different policies and try to overcome them with the help of integration. The report explains different kind of integration like horizontal and vertical integration. It develops the plan for the organization that helps the new venture in the market and also helps the business to gain the competitive advantage.
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