Unit 12 Hospitality Industry and TT Assignment - TUI & Hotel Hilton

Introduction

Hospitality refers to relation between host and guest where the host receives the guest including the greetings, entertainment, personalized services and products that expected by the visitors. The business of hospitality is increasing with the significant growth and encouraging the other sector organizations to start operations in this industry. On the other hand travel and tourism is process of discovering new places and providing the opportunities to spend leisure time with friends and family by selecting and buying the packages of tourism organizations according to needs and spending power. Unit 12 hospitality Industry and travel and tourism for TUI & hotel hilton report will discuss the interrelationship between hospitality and wider  travel and tourism  business using the examples of TUI and hotel Hilton for encouraging the operations by pooling the resources. In the next part report will analyze the implications of integration in hospitality industry and its affects. In the next task report will develop a rational for hospitality project and develop the plan including the operational requirements, structure of organization and allocation of human resources.

Task 1

1.1 Interrelationship between Hospitality and Tours and Travel Industry

 In recent years, society has developed a lot due to various human activities which also promote the development of many new industries. Two of these industries are hospitality and tourism. The hospitality industry is growing mainly because of tourism. The hospitality industry includes Human Resource Management, material management, equipment management etc. It also includes accommodations in hotels and provides various facilities such as night parties, bar etc. The organisation has diversity in its customs and ethics which helps the organisation to maintain its employees.

The hospitality unit is mainly formed by hotels, restaurants and amusement parks. The hotel provides quality service to its customers such as dinner, parties, clubs and gaming, proper accommodation facilities etc, and also customer feel satisfied and visit again to the same hotel. The service provided by the organisation also helps in attracting new customers. The tourism industry also provides different packages set as per the budget of the customer (Chathoth.et.al. 2011). Tourism industry encourages the tourist to enjoy completely and spent lot of time and money at a location. Travel industry and hospitality industry are very closely linked to each other. For example, a group of school students want to go for an educational tour at various geographical areas. For this the school organisation will contact any tour and travel organisation of UK which first provide best package as per their budget and will also provide proper accommodation facility, food, transportation facility etc. All the accommodating facilities and food will be provided by the hotel. Also safety and security related to students’ belongings will be provided by the hotel. Due to all the facilities provided, students will feel relaxed and will also enjoy their tour as planned. Thus, without the help of hotel tour is not possible. This proves that both the industries are dependent on each other and perform all functions in coordination with each other. Thus, Hospitality and Tour and Travel industry are interlinked.

TUI group is very renowned and worlds’ number one tourism business. It consists of its own travel agencies, hotels, airlines, cruise ships and retail stores. TUI group was created on 3rd September 2007 by the merger of First Choice Holidays PLC and the Tourism Divisions of TUI AG. It has recently owned 6 European airlines- one of the largest holiday fleet in Europe and UK-based tour operator Thomson. Its headquarters are located in Crawley, West Sussex, UK (Campos-Soria.et.al. 2011). It also consists of 3000 hotels and public limited organisation with 76000 employees working in more than 180 countries worldwide. It has given quality based service to around 30 million customers worldwide. In UK, the Thompson Airways is the largest of TUI airlines. TUI has become one of the leading organizations on the international platform with the revenue of £15,051 million as on 2013. Here is the logo of the organisation.

                                         Figure 1: Logo TUI

TUI group has leading business with 1800 travel agencies and online portals also it operates both scheduled and chartered flights to more than 150 destinations worldwide. TUI Plc merged with the airline organisations in 2008 and then new business was carried out with new name “First choice Airlines” which provided quality service to its customers. After sometime it also carried out joint venture with hospitality organisation (Espino-Rodríguez.et.al. 2016).  The organisation designs its time table according to the customers by providing more ease to them and also high quality service to its customers. TUI offers various offers to its customers for example, it provides discount on tickets to the customers and various other services like travel packages, food, transport etc. With all these facilities customers feel satisfied which leads to increase in the growth of an organisation.

                                                   Figure 2: TUI airline

Hilton hotel is the global brand and one of the largest hotel brands in the world. It was founded by Conrad Hilton in May 31, 1919. Its headquarters are situated in McLean, Virginia. Hilton hotel also participates in Hilton HHonors, Hilton worldwide guest loyalty program. The hotel provides various facilities to its customers, for example, exclusive discounts, WI-FI facility, keyless entry and also allows the customer to select room of their choice by using Hilton HHonors app. Recently the company has upgraded energy efficiency in many of its branch in UK, by installing green controls for doors and windows.

                Figure 3: Logo Hilton hotel

Hilton hotel provides suitable environment to its customers where they feel like home and want to visit again. Organisation provides quality service that is from proper accommodation to food everything in organised manner to the customers which suit their budget as well. Organization focuses mainly on the  customer satisfaction , because it is assumed that if the customer is satisfied, then the individual will visit the same place again. Organisation with the help of its staff members is achieving its goal.

The businesses which are mentioned above are interrelated with each other in their services. Both are dependent on the services provided by these organisations. TUI group design packages according to the services provided by the Hilton hotel.  In terms of service both organisations shares strong connection (Chen.et.al. 2013). For example, if TUI is offering free transportation facility on the other hand Hilton hotel is offering quality service that is accommodation, food, beverages etc. When both the services are merged then customer feels that quality services are being provided. Through this study it can be known that both the organizations are interlinked and interdependent on their services to improve customer satisfaction.

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Task 2

P2.1 Analyse the implications of integration to the hospitality industry           

Integration is a process of combining the resources as well sharing of information to meet the business objectives. In the current scenario the organizations are using the different types of integration like vertical and horizontal for encouraging the performance by optimum utilization of resources. According to given scenario, TUI has started the business as mining organization in 1920 and in 1990 organization has made bold strategic action to move from its rusting steel production (CG Davidson.et.al. 2011). Moreover, in 1990 become the leading tourism organization by acquisition of Thomas Cook by 50.1 %. Now, TUI is having the more than 300 hotels that include the brand like RIU, Grecotel, Grupotel, Iberotel and Magic life as well fleet of more than 150 aircraft. TUI AG was continuing the expansion of business by purchasing the First Choice Holiday in 2007 and getting the support of Australian Sports for developing the business with the significant growth.

For development of business and expanding the areas of services, top management of TUI is using the integration approaches according to needs and situations which helping to maintain the customized services and proper utilization of resources to meet the both organizational and customer objectives (McCarthy.et.al. 2010). Using the integration process the tourism and hospitality organizations are setting the common goals and having major concern over the needs and demand of the target customer groups. According to evaluation, TUI organization has integrated with the leading hotel and airline organization across the world which helping the management to develop customized architecture by combining the resources. This has positive impact on the outcome of TUI as the reputation as the brand is increasing which influencing the demand of TUI services in both travel and hospitality sector. Following are the key integration which have made by TUI:

• Vertical integration: It is the process in which a leading organization purchases the suppliers or other organizations from the same industry known as vertical integration. TUI management is using the integration process for developing and expanding the business in different areas by analyzing the capabilities of the local brand and effectiveness in services. This type of integration is helping organization for lowering the cost, proper utilization of resources and reduces the cost of establishing the infrastructure (O’neill and Mattila, 2016). These are the major implications of vertical integration which empowering the brand TUI in global prospective as well enhancing the standard of services that supporting to retain the customers and attract the potential customers. For example, organization has made vertical integration with the Magic Life to generate the high quality services and products according to needs of the potential customer groups. This integration has provided the many positive outcomes for organization such as both organizations are using the technical tools for better communication, monitoring and offering the training to staff members which helping to maintain the high quality services in different segments of business operations. Moreover, major implications that have been identified through vertical integration are improvement in the business strategy, planning of resources, meeting the customer expectations and enhancement of brand image which providing the proper control.
• Horizontal integration: This type of integration refers to combination of two organizations to establish the bigger and better organization that offer all kind of services that required meeting the needs and existing and potential customers. TUI has applied this type of integration to expand the business and encourage the brand awareness in the areas where people are looking for better service options. For global expansion horizontal integration is beneficial that helps to maintain the quality of services according to global standard. The major implication that identified through the horizontal integration is improvement in the productivity and range of services that has been provided to different types of customers (Law.et.al. 2014). For example, TUI has merged the services with the First Choice Airways to include the transpiration services as well as integrated the services with the Edward House Hotel UK. By having this integration organization has improved the accommodation and ground level services options. This kind of approach has provided the positive outcome for both the organization to maintain the flow of services. By having the horizontal integration, TUI has expanded the business globally and enhanced the capacity of managing the tourism packages for different types of customers. Moreover this integration has helped organization to generate the higher revenue and get the attention of people from across the globe.

P2.2 Discuss how integration has affected a hospitality business

The hospitality and tourism organizations are using the vertical and horizontal integration approach for developing the business and getting the high attention of customers by offering the personalized and wide range of services in one package. Integration majorly focuses on the utilization of resources and gaining the competitive advantage by setting the competitive prices as well implementation of technology. In spite of that, integration has affected the hospitality business of TUI in following manners:

                                  Figure 4: Impact of integration

• Lack of knowledge: This is been considered that lack of knowledge about the key aspects of vertical and horizontal integration make issues for organization as the staff members are not having the information about the changes in the process and strategy (Kim and Jogaratnam, 2010). For example, by having the integration with the hospitality organization TUI has to develop plan and packages according to specific culture, tourism season and quality of services. However lack of research about these elements affect the planning and influence the expected service standard of organization which results in negative outcome for TUI.
• Use of technology: Integration of technology has major impact on the business of hotel organizations as people are gaining the information directly from the website and having communication personally (Hyun, 2009). These technical changes are introduced for better functioning and coordination of two organizations but lack of training and understanding is affecting the business of TUI hospitality as delay in decision making, error in sharing of information and less knowledge about the key objectives of technology is affecting the operations of hotel industry.
• Cost integration: Both vertical and horizontal integration has significant impact on the cost planning and expenses for different organizations. The aim of using the integration is to overcome the cost of developing and offering the services by pooling the resources but high investment and developing the new training module is affecting the overall cost for hotel organization to maintain the breakeven point situation (Hertog, et.al. 2011). For example, by having the vertical integration with Magic Life hotel management of TUI has invested lot of amount. Hence, it is been considered that integration is affecting the business objectives of hospitality as it requires high amount of investment.   

Task 3

3.1 Develop a rationale for a selected project clearly justifying decisions linked to target market

By analyzing the growth of hospitality, I have decided to open a hotel restaurant named Desire. The major reason for entering into this business is to improvement in the disposable income of people like they are giving preference to new food, ambiances, quality and additional services for accommodation and spending leisure time with the friends and family. Moreover, stable economic conditions and demand of quality services and products in the hospitality has encouraged the management to enter into the business by offering the international level services using research facts according to current conditions (Baraban and Durocher, 2010).  The mission for establishing the hospitality organization is to offer the quality services in food and accommodation by having the all famous food items, eco-friendly interior, customized housekeeping services as well concern over the health and safety of staff and visitors. The most suitable location for establishing the business is central London which is hub of international visitors and good place for attracting the upper-middle class people.

In order to gain the knowledge about the needs and expectation of local and international visitors, market research has been conducted by the management in which questioner form filled and collected from random people. Moreover, strategy of existing hospitality organization and process of handling the domestic and international customers also been analyzed through research. The major elements of conducting research are prices, quality, range of services in food and accommodation, funding and knowledge about the licensing process for pub and bar. By analyzing the information, management has made the decisions for targeting the upper-middle class market, choosing the London as location and appointing the expert chief for preparing food of different culture with original taste. For gaining the attention of target customers and establishing the reputation of brand, management will offer the promotional offers and membership cards for customers. In addition to this, hospitality organization will offer high speed WiFi for customers and visitors as well provide the online booking and communication facilities for internet users (Alonso and O’Neill, 2010). This kind of planning and approach will be followed by the management of Desire hotel restaurant to meet the business objectives as well satisfied the needs of customer by offering unique and high quality services in food, front office and housekeeping.

For execution of plan, the organization will requires high amount of funds approx £ 50 million for developing infrastructure, staffing, inventory and security as well licensing. For that, management will contact to the leading banking organization and investors for borrowing the amount and maintain the operations according to planning. 

3.2 Business plan

Stage 2: Design: In this stage organization covers the outfit of the hotel for example what will the interior, exterior of the restaurant, culture, taste etc. The interior of the hotel must be attractive and please the customer in the first visit. Various factors are being considered while developing the plan for the hotel like ambience, culture, interior and exterior etc. Following points helps the organization to develop the quality business plan:

Ambience: The management will decorate the hotel in very pleasant manner that attracts the clients in the first visit of the hotel. The lighting of Hotel Desire is very attractive and pleases the eyes of the visitor. When clients come for the candle light dinner they will take good experience during the dinner. The management of Desire Hotel uses the fountains with lighting that creates the peaceful environment in the Hotel. All the corners of the hotel must be lighted with multi colour lamp which is the current trend in the hotel industry. Interior can de designed with modern art by which youth can be attracted towards the restaurant (Jani and Han, 2014). The organization will provide decent services in the accommodation in the rooms like wall paintings, modern statues in the corners etc.

                        Figure 5 Ambience of the hotel

Culture: The culture of the restaurant must be effective and innovative that reflects the image of the hotel. The management needs to put more efforts on the bar, dance floor, pub etc which depicts the modern culture in the Desire Hotel. The waiters of the restaurant must be well behaved and they should communicate with the customers in the polite way. The organization will more focus towards the cleanliness of the rooms and provide the quality services to the clients.

Interiors and Exteriors: Exterior of the hotel helps the organization to attract the customer and interior assist the customer to visit again. The exterior of the hotel is well designed and well furnished and all the facilities will be available to the customer for which they are paying. The interior must be attractive and pleasant that convinces the customer to visit again and again. The interior of the rooms must be good and cover all the necessary items like coral sofa and surround with ancient statues and paintings. The wall must be paint covered with paintings colour combination must be decent that please the eyes of visitor. The gallery must be designed with Kelly green, bright gold and graphic prints to make the interior more attractive (Kim and Perdue, 2013). The bathroom Hotel provides various services like bathtub, high quality accessories, premium quality bathing material etc. In exterior Hotel will provide oversized window to allow the sunlight and outdoor scenes by which client feels amazing to reside in the room.

                                         Figure 6: Interior of the room

Functional Areas: Desire Hotel will put lots of efforts to interact with the customers by which they can visit the hotel once. Management will use various services in order to make the services reliable and convenient for the customers so they can easily book the rooms in the hotel. Business will apply “Delivery on Time” method for the customers by which there is no chance for the delay in delivery.

Sustainability: For sustainability organization will adopt innovative techniques to attract the customers like hiring skilled employees for operation, quality services etc. Management will design various innovative strategies to compete in the market like occasional offers, WIFI facility for youth, organize the live concerts of celebrities, distribute the free breakfast coupons, gaming facility for the children, complimentary items on the order of high amount of food etc (dos.et.al.2016).

Brand:The organization is more focused to create the brand of the Hotel Desire. Another aim of the organization is to gain the trust of the customers by delivering quality services to the customers. For customer satisfactionmanagement design the website on which representative of the organization will solve the issues of the customers related to the services.  

Stage 3: operation

Operation is the most important part for the Hotel Desire through this stage the management can achieve the  development and design  stage. In this stage staff of the hotel put efforts to achieve the organizational goal. The management designs the sound operational strategy in order to achieve the set benchmark. Management design the various operational strategies related to staffing, recruitment, legislation etc. This all strategies assist Hotel Desire for smooth functioning of hotel and restaurant.

                            Figure 7: Structure of organization

• Recruitment: Under this management will hire the skilled candidates in the organization so the management will be able to serve better services to the clients. According to this process HR team of the Hotel Desire will hire the skilled candidate for quality work. The HR team will enhance the capability of the candidate by providing training to the candidates. The manager will identify the capability of the candidate then assign the task to the candidate (Gibbs.et.al.2015).
• Staffing: Staffing is the important process for the Hotel Desire by which management will assign the task to the selected candidates. HR team will conduct the training sessions for the employees in order to improve the efficiency of the employees. Hotel Desire will allot the task to the candidates in various positions like cleaning, receptionist, telesales, chefs etc. In this process HR team will allot the right job to the capable candidate.
• Cultural Diversity: For quality working environment organization will treat all the employees equal and provide the growth opportunity to the employees in order to maintain the cultural diversity. HR team will design the policies to maintain the cultural diversity in the organization. For instance HR team will implement the rules that rules are applicable on all the levels of the management (Sourouklis and Tsagdis, 2013).
• Legislation: Hotel will follow all the rules and regulation which are created under law like Equality act, non-discrimination act etc. Management will clear all the doubts of the clients regarding brand name, packaging, food quality standards etc. All the services and products are registered under the government law etc.

From the above study it is been considered that hospitality and travel and tourism are two interrelated industries that are using the integration approaches for achieving the business objectives and retaining the customers. Report has provided information about the interrelationship between TUI and Hilton hotel for managing the business and developing the areas of services. In the next task, report has analyzed the implications of vertical and horizontal integration for TUI using the case scenario as well discussed about the impacts of integrations on the business of organizations. At the end, report has developed the plan for hospitality business for Desire hotel restaurant and provided the information about the strategic and operational activities to sustain the place.