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Unit 12 Interrelation Hospitality Industry and TT Assignment
Diploma in Travel And Tourism
Unit Number and Title
Unit 12 Interrelation Hospitality Industry and TT
The interrelation hospitality industry and travel tourism delves with the aspect of hospitality provision in the travel and tourism sector where the interrelationships between the hospitality and wider travel and tourism businesses are being discussed. Also, the implications of integration to the hospitality industry are being analysed. Along with that, the ways by which integration has affected a hospitality business has been discussed. Moreover, a rationale for a selected project has been developed that will clearly justify the decisions related to the target market as well as a plan has been developed in respect of the hospitality business that takes into consideration the functional needs of the organizational structure of the business regarding the allocation of human resources.
1.1 Discuss the interrelationships between hospitality and wider travel and tourism businesses.
The hospitality sector mainly comprises of hotels, restaurants as well as theme parks and takes into consideration the aspect of providing services such as food, drinks, accommodation as well as other related services for the customers to feel relaxed as well as rejuvenated, such as swimming, spas, salons, gymnasiums and so on. The major focus to deliver such services is ensuring that a customer is having complete satisfaction by receiving services of better quality, whereas tourism takes into consideration the aspect of a customer travelling from one location to another location. This travelling might be for the reason of recreational activities as well as business purposes and occurs for a precise time period that mostly takes into consideration car rentals, railway services, airline services, travel agents as well as tour operators. (Furnham, 2012)
There is an interrelation between the hospitality sector as well as the travel and tourism businesses for providing enhanced services for the customers as well as for providing improved satisfaction for the customers since obtaining of every service by the customer takes place at a single contact point. The two sectors are working in harmonization with one another having a common objective that is associated with the generation of increased scopes for employment and also assistance in the country’s economic growth. The travel and tourism industry is offering approx. 255 million jobs internationally as well as contributing approx. 9% of GDP to the UK’s economy. (Lind, 2014) The government is active towards the implementation of the policies in relation to the travel and tourism legislation but the private sector establishments have the requirement towards the running of the hotels, airlines, airports, cruise lines, as well as the functioning of the travel agents as well as tour operators for making use of the countries’ potentiality associated with travel and tourism business.
The interrelationship amongst hospitality as well as wider travel and tourism businesses are mentioned as under,
For evaluating the amalgamation amongst hospitality and travel and tourism businesses further, there have been the selections of two hospitality establishments that are Savoy Hotels as well as Hotel Ibis, London. Savoy Hotel is having a chain of hotels internationally and is a famous brand in the hospitality industry having a rich experience of many years. Savoy hotel is offering luxurious services for the customers. The hotel is famous for its pioneering approach regarding products as well as services by providing smart designs, pioneering concepts as well as bona fide assurance as well as hospitality regarding the customers. The Savoy Hotel is having its presence in various places across different countries. (Lind, 2014) The hotel’s rooms are having an operational design that has attentive facilities having the alternative towards the customization of the room according to the choice of the customers prior to their checking into the hotel.
Along with the facilities for accommodation, Savoy Hotel is also offering food as well as beverages and also different services such as beauty salons, spas, gyms, as well as activities for leisure in respect of the kids. The Savoy Hotel is also providing certain facilities particularly in respect of the business customers that comprises of the meeting rooms, conference halls, as well as latest developments associated with the technological aspects. (McDaniel, 2011) The main aim of the Savoy Hotel is to provide complete satisfaction for the customers as well as ensuring that the overall experience of the customer from the moment the individual is checking into the hotel to the moment the person is checking out should be thoroughly pleasurable. For offering a complete range of customer services, the Savoy Hotel is integrating with different hospitality establishments. The Savoy Hotel has collaborated with various airline organizations such as British Airways, Easy Jet as well as Ryan Air. There has also occurred collaboration of the hotel with various travel agencies as well as tour operators like Thomas Cook, TUI, My Travel, car rental companies and so on. The Savoy Hotel is mostly situated at strategic places that are providing a scope to the hotel towards entering into a healthy association with different establishments that is offering services to the customers. The Savoy Hotel is also having a better collaboration with the airlines as well as companies offering car rental services.
The other hospitality establishment that has been taken into consideration is the Hotel Ibis that is situated at the financial heart of the London City. The hotel is having an easy accessibility to the Liverpool station and is situated close to various corporate establishments as well as business houses. The Ibis hotel is considered to be business hotel and also a luxury hotel that is offering various customer services. The hotel is having approx. 350 rooms. The rooms are having modern amenities such as satellite television, Wi-Fi, and so on. The hotel is offering a comfortable staying experience and is also having a restaurant that offers a brilliant ambience as well as widespread menu that comprises of delicious delicacies from all over the world. (McDonald, 2012) Hotel Ibis is also offering a safe deposit box, fax machine as well as multimedia accessibility. The hotel is also providing an exclusive ’15 minute quality policy’ that states if a customer is not satisfied with the services of the hotel, he might inform the reception regarding his displeasure, and if the problem is not sorted out within 15 minutes of receiving the complaint, then the hotel does not charge any money from the customer.
Therefore, it can be stated that hospitality as well as travel and tourism are not complete without one another and it can be inferred as well that the interrelationship between hospitality and travel and tourism businesses is resulting in more profitable as well as attractive businesses. The hospitality services along with travel and tourism services are making the customers have an enriching as well as satisfying experience. (Palmer, 2011) It is not possible for a customer towards enjoying the travel in the absence of hospitality services such as food, stay, activities for leisure and so on, therefore, the hospitality sector normally makes sure that the customer is having a complete fulfilling experience in respect of travelling that takes into consideration a hygienic environment for living, hygienic food as well as better activities associated with leisure towards absolute leisure of the body as well as the mind. (Palmer, 2011) In the same manner, a customer will be unable to take pleasure in the hospitality experience if the services associated with travel and tourism is not offered. There occurs absolute collaboration amongst the hospitality as well as travel and tourism businesses for ensuring absolute customer satisfaction that consists of offering special tour packages for the customers including facilities for travel, accommodation as well as food and also activities for recreation and so on.
2.1 Analyse the implication of integration to the hospitality industry.
Integration is associated with the aspect of uniting activities of various departments or two or more organizations getting merged. Organizations often adopt this strategic aspect when they are planning to actualize economies of scale for decreasing the functional costs. Integration also assists in increasing the margin of profits through the performance of various actions. The strategic aspect related to integration also assists in increasing the share of the market by enhancing the brand’s presence in the global market. There are two kinds of integration that are considered as vertical integration as well as horizontal integration.
Vertical integration is the method in which an organization purchases its own suppliers or purchases a different organization in the distribution chain resulting in the diminishing of the functional expenses and therefore ensuring profit maximization. For instance, the Savoy Hotel is having its personal travel agency for ensuring that the hotel might be offering additional services towards the customers for ensuring satisfaction to the customers as well as increasing its personal business. (Dwyer, 2012) Horizontal integration is the method in which two organizations from relatively varied industries will be forming a larger organization leading people to the growth in the total customer strength as well as increasing the percentage of profit due to the achievement of the economies of scale. For instance, if Hotel Ibis will do the purchasing of another hotel for increasing the overall customer base and therefore, the percentage of profit as well as have a growth in the hotels’ market share in regard to the entire industry.
The implication of integration to the hospitality industry is as follows,
- A major significant implication of integration of the hospitality sector and the travel and tourism business is that it assists in the actualization of the economies of scale. The meaning of economies of scale is associated with the fact that as there occurs a growth in the scale of operations, there occurs a decrease in the overall functional costs that as a result assists in increasing the margin of profit as well as the total productivity. (Fernando, 2011)
- Integration also assists in extending the business on a global scale. For instance, Hotel Ibis will be able to purchase another hotel in another country. This extension along with assisting in increasing the overall base of customers will also assist in increasing the hotel’s global presence.
- Integration in the hospitality industry will be leading to the aspect of consistency in which similar service experience is provided to every customer irrespective of the place they are visiting. (Dwyer, 2012)For instance, every Savoy Hotel will be having similar structure as well as building design having similar ambience as well as similar theme regarding the restaurant that assists in maintaining the total service quality management as well as maintaining the brand image.
2.2 Discuss how integration has affected a hospitality business.
In respect of the hotel industry of the hospitality business, integration has affected the industry in the following manners,
- Economies of scale – Integration in the hotel industry of the hospitality business assists in the attainment of the economies of scale. Thorough the achievement of economies of scale, it assists in reducing the functional costs and as a result, increase the total profit that assists in the growth of the business volume and the share of the market. The business volume might develop through the growth of the customer base or to increase the service strength or offering services at different locations that might be across borders as well.
- Better accessibility – The business integration also makes sure that there occurs an improved accessibility towards a broad array of services at a single contact point regarding the aspect of customer satisfaction as well as ease of the customers. (Daft, 2015)
- Standardization – Business integration makes sure that there occurs standardization. The various hotels most of the time accepts customary functioning processes post the development in the scale as well as functional area that enhances with integration. This process ensures that similar service related experience is offered to the customers each time they are visiting any of the hotel chain across the world. This assists in providing improved service quality for the customers, maintaining the general brand essence as well as ensuring overall customer satisfaction. (Daft, 2015)
- Conflicts –There might occur possibilities in which the goals of the hotels that enter into integration are not matching that might be leading towards conflicting situations as well as delaying the process of making decisions. Such conflicting scenarios will be leaving a strong influence on the total customer experience in respect of the individual’s relationship with the hotel industry of the hospitality business.
3.1 Develop a rationale for your chosen project, clearly justifying decisions linked to target market
The project will be based on the small hamburger based fast-food restaurant in UK where the items like hamburger, gourmet burger pan fried dishes, pizzas, coffee, soft drinks will be available. Hamburger is a kind of sandwich that is covered by the ground meat along with the bread roll. The type of meat that is mainly used in UK is the turkey burger, bison burger etc. The fast-food restaurants, cafes, food corners, mobile food vans are the distribution points where this kind of items is available. There are several big chains who are serving these items globally like Mc Donald’s, Burger King, Dominos etc. The restaurants are growing at a faster rate in UK as the trend of shifting from normal fast food restaurants to hamburger based restaurants are observed from the market research. Around 7% of the people of UK have shifted towards the hamburger based restaurants and especially the age group from 16 to 34 shows a rise in preferring theserestaurants around 12% that is significant for the business growth. From the different research it can be observed that the sales turnover of the hamburger based restaurant will increase from 3.2bn pound to 3.8bn pound within the period of 2020 in UK (Dunsby, 2016). Around 1m pound sales has come from this restaurant in UK at the end of the year 2015 and thus predicted a steady growth in the coming years. It has been observed that in UK, the people preferthese items due to the healthier alternative, easy to carry and consume. The children who are coming with their families prefer these items due to the taste and easy availability of several big and small restaurants. The other considerations can be the stable economic situation which will accelerate the growth of the business in UK. For example the reduction in the rate of the inflation from 0.5% to 0.2% will encourage the people to increase their purchase at a reasonable price. Along with that the positive approach by the Bank of England with their monetary policy will definitely bring a flow in the money and that will increase the scope of the business in UK(Gerrard, 2013). Moreover the local suppliers of the beefs and pork are easily available which will help to operate the business in UK and also provoke the customers to consider the purchase. The other favourable factors like easy to make as well as serve will help to maintain a sound margin for this business in UK. It is the favourable market as the students will find this item as a perfect choice to spend their quality time in a hamburger based restaurants with a limited budget and moreover the increase in the number of intake capacities of the colleges will support more customers for the business. As a resident of UK it will help my plan to become success due to the familiarity of the social, cultural and political factors that are related with the decision making process of an organisation. Thus all the positive factors have influenced to consider the decision forselecting the business of hamburger based small restaurant in the market of UK.
3.2 Develop a plan for a hospitality business which includes the operational requirements of the business’ organisational structure in relation to human resource allocation
The business plan for the small hamburger restaurant in UK will consist of three stages which are shown below:
Stage 1 [Development]
- Concept: The small hamburger restaurant will be focus on two aspects that are quality and pricing. Superior quality will be maintained along with the reasonable pricing in order to attract all types of customers towards the restaurant. The values of the restaurant will be to serve all the customers with equal importance and will bring changes in the menus in order to grow the interest level of the customers (Kotler, 2010.
- Market Research: Market research will give insight in to the actual facts related to the business strategy by considering the secondary and primary research. Primary research will be done by collecting the responses of the people from different areas in order to understand the growth possibilities of the restaurant. From the secondary research it is observed that around 7% of the people of UK have shifted towards the hamburger based restaurants and especially the age group from 16 to 34 shows a rise in preferring these restaurants that is around 12% which is significant for the business growth. Moreover the students are showing their interest towards these restaurants in order to spend their quality time with their mates and also to cope with their pocket money.
- Target Market:For targeting the market it is needed to segment the market at first. Segmentation is the process of classifying the group of customers with a similar buying behaviour in order to select the target audience effectively (Jain and Haley, 2010). The segmentation criteria will be based on the following parameters that are as follows:
- Substantial: The target market must be adequate in order to achieve higher volume of sales and profit. The loss in the business can be occurred at any time and if the target market is large then it will be easy to compensate that loss at a low cost. The students and the job holders will find this place appropriate in order to spend their quality time as well as to consume the food at a reasonable price. The preference towards the hamburger restaurantfor this grouphas shown an increase nearly 12% which is a positive sign for the selected business plan.
- Accessible: The reach and availability is the prime concern for any business. Initially the business will consider only the customers who will come to the restaurant. After that if the business grows positively then delivery service will be started within 30 to 40 Km from the restaurant to serve the customers effectively.
- Responsive: As the target segment will be adequate so it is justified to categorise the customers in to certain divisions like gender, age group, frequency in order to tap the segment more effectively.
- Actionable: All the customers will be served effectively by the trained employeesof the restaurant
- Location: The location of the selected business is the major consideration as it will influence the revenue generation from the customers (Phillips, 2015). The place can be Stratford which has the potential to attract the tourist as well as students towards the restaurant. As it is a small restaurant with a limited budget so it will not be feasible to open the restaurant near Mc Donald’s or Starbucks due to high rent and taxes. On the other hand the traffic can be maximum at this places which can double the revenue for the coming years.
- Scale: As the demand for the hamburger restaurant is increasing as per the different market research in UK so it will be feasible to open the restaurant at size which can support at least 20 people at a time. The increase in the seating capacity will be considered after 6 months of the restaurant. The demand of the people or the sales turnover for the 6 months will be considered in taking decisions regarding the increase in the seating capacity.
- Funding: As the budget is short and the size of the restaurant is also limited so it will be feasible to have a proportion of 60:40 that is 60% will be the capital of the owner and 40% will be raised from the other sources like financial institutions, investors etc. The 40% of the fund will have interest which will be the liability of the owner and for that sales turnover will be given more focus in order to make the interest payment easily. The debt period will be maximum 3 years based on the growth rate of the hamburger restaurant. This will help the business to achieve the breakeven more easily. The investment will be around 50, 000 pounds that will be fixed for the establishment cost.
- Products and service: All types of burger including vegetable, pork, beef, chicken, as well as pizzas, baked items, soft drinks, will be available. Initially the restaurant will have 20 seating capacity and if the sales growth shows positive then the delivery service will be open around 50 Km from the restaurant. It will facilitate the people to get the food items at their door steps without wasting their time. The services that will be there are the free Wi-fi and charging facilities which will help the customers to use the internet for his/her need.
- Licensing:Minimum 10 working days will be required to get the approval of the licence from the Council. The fee is 21 pound and it is needed to fill up the specific format during the application. All the requirements prescribed by the Food Standard Agency and Hazard Analysis Critical Control Point (HACCP) will be considered for the restaurant.
Stage 2 [Design]
- Ambience: The ambience will support the customers to find the place as a perfect destination to spend their quality time. The LED lights, designing walls and ceilings, light music, dress code for the waiters will be maintained in order to attract the customers frequently in the restaurant. The clean and hygienic environment will be given high priority for maintaining the business values that is quality foods.
- Culture: Diversification in the cultural background will be considered during the employee selection to the customer’s preference (Brotherton& Wood, 2015). It is normal that people from different culture will have different taste and preference. In order to align the culture, food items are designed accordingly.
- Exterior: The exterior will be made from long glasses with a big size widows and two doors for entry and exit respectively. Different flowers, plants will be there to make the feeling of freshness to the customers. The customers can be allowed to visit the kitchen in order to establish the transparency factor of the business.
- Functional Areas: There will be two managers who will be responsible to manage the operations and procurement. Under the operation the manager needs to take care of the employees, chefs, manufacturing process etc. On the other hand the manager of the procurement will take care of the dealings with the suppliers, order monitoring, order placing, accounting etc. The waiters will have one supervisor and one head chef to manage the staffs. Two employees will be responsible to manage the daily accounts and report the transactions to the manger in charge of operation.
- Target Market:The target market will be the age group from 16 to 34 primarily. For the kids there will be some dishes in order to attract the families. In a brief it can be said that Differentiated targeting approach will be consider to satisfy all types of customers with the products and service of the restaurant.
- Sustainably:It is the responsibility of the business to give back some contribution towards the environment in order to establish a future that is beautiful and sustainable. Based on the suitability all the communications will be done by considering the e-mails which will save the use of papers. Moreover the energy consumption will be given priority to save the energy.
Stage 3 [Operation]
- Staffing by functional areas: The functional areas will be divided in to two areas that are operation and procurement. As this is small budget restaurant so it will not be feasible to employ more people initially. Thus a supervisor will be there under the operation that will manage the duties of the staffs and prepare the time charts. Secondly the chefs will have a head chef who will lead the team. The procurement manager will have two employees that will take care of the entire supply chain and order placement process (Boella, 2013).
The organisation chart will help to clear the structure of this small restaurant
- Specialist qualifications:The chefs should have minimum 2 to 3 years of experience in the field of cooking. The waiters must have 1 year experience in the hospitality sector and must have strong communication skills. The executives in the Finance should have minimum 1 year experience in the field of accounting. Training will be given to the waiters and the staffs under the procurement area in order to manage the operation effectively in the restaurant.
- Staffing issues related to seasonality:It is common that issues related to the staffing will be there in some season and for that outsourcing of the temporary staffs will be done in order to continue the operation.
- Cultural diversity and ways to deal with conflicts:The staffs will be selected from different cultural background and their approach of giving the performances will be varied. This can affect the team work or team bonding. In order to remove the conflict, training as well as job rotation will be consider for having positive team work (Wacksma, 2014).
- Recruitment policies and procedures:The recruitment will be done by the third party recruiter and the final assessment will be done by the owner or the operation manager to check the capability of the candidate. Discrimination is prohibited on the ground like cultural background, gender, religion, race etc. After the selection medical test will be done for checking the fitness level of the candidate. The doctor specified fit candidate will be given final job offer where the salary, incentives, job responsibilities, terms and conditions will be mentioned clearly.
- Compliance with legislation: Equality Act 2010 will be followed while selecting the candidate. Secondly, the Health and Safety Act will be considered by conducting the risk assessment in the restaurant. Thirdly, Data protection Act will be followed in order to secure the personal data or information of the customers.
- Promotional Activities: One of the important considerations of the business which will aware and inform the people about the new business. Initially three elements under the promotional mix will be consider which are as follows (Harrell, 2011)
- Internet Marketing: Social media platform will be utilised to attract the tech savvy people of UK. Around 90% of the people used to surf internet and thus it can be the potential platform to attract the people.
- Sales promotion: Mobile app will be developed where the coupon codes will be given to the app users. The coupon code will be redeemed at the counter after the purchase of certain items. This will create interest among the youth people
- Advertisement: Leaflets will be distributed among the students of the colleges near buy and to the local people to aware the offering of the restaurant.
- Pricing strategies: The strategy for the pricing is one of the prime considerations of the business planning. This is the only area where the revenue generation is attached. The pricing objective of the restaurant will be Market Penetration in order to attract more customers with a reasonable price in comparison with competitors pricing. The pricing method will be Value based pricing which will fix the price after considering fixed and variable cost. The value will be the main focus for the business and that will be delivered at a reasonable price to the customers.
The report has given the essence of the overall hospitality sector and more specifically the business plan that has been prepared at the last of the report based on a small restaurant in UK. The interrelationship with the tourism industry with overall hospitality sector has been discussed at the beginning of the report. The most important part is the business plan which will be introduced with a rationale to select the business, place and target audience for the business. The business plan will give clear understanding about the direction of the business which has included the communication process, relevant target market and profitability factors. The business plan will help to plan the activities which are required for the business and along with those misunderstandings will be removed from the work process.
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