Travel and Tourism Level 5 R/601/1744 Pearson BTEC (HND)

The purpose of the report is to identify the interrelationship hospitality and wider tourism business. It also has focus on developing the understanding about effect of integration within hospitality  industry.

TASK 1

1.1 Interrelationship between hospitality as well as wider travel industry

TASK 2

2.1 Analysing the implication of integration to the hospitality industry

The concept of integration has been continued since a long time.  Integration is each and every industry including hospitality sector. This strategy is adopted by companies for reaching to the economies of scale. Integration also assist business entity in reducing the cost of production. There are several types of integration such as vertical as well as horizontal integration. Vertical integration takes place when  business entities purchase another organisation in chain of distribution (Davidson,  McPhail and Barry, 2011)

 Vertical integration :The vertical integrations' strategy has been adopted by  PKF hotel for minimising the operating cost and increasing the profitability. For instance,  PKF hotel have complete control over  the distribution chain. Business entity placed economies of scale at the top  priority. Management team in an enterprise have focus on providing the training top its workers and making investment on their development of staff members.

Horizontal integration: In this strategy two different industries come together to form a new big companies. This strategy is adopted by an organisation for gaining the several benefits including economies of scale. In context of PKF hotel , firm has form the partnership with tour and tour organisation with the intention to increase customer base.

Implication of integration in hospitality sector

In present scenario, there are many companies which has failed to sustain their business in hospitality industry due to increase in intensity of competition as well as dynamic business environment. But the unique quality of hospitality sector is that in this industry all the organisation supports each other in terms of growth and maintaining the suitability. In case of the small organisations which fails to sustain such companies are been acquired by giants organisations. There has been man\y mergers have taken place in hospitality industry. For instance, Starwood Hotels & Resorts by Marriot

International, valued at 12,2 billion US$, is the largest transaction of its kind in the hotel

industry since 2007 when private equity firm Blackstone acquired Hilton for 26 Billion US$.

In 2015, France’s Accor Hotels bought the Toronto-based parent company of the luxury

Fairmont, Raffles and Swiss hotel brands for $2.7 billion; Intercontinental Hotels Group

 acquired Kimpton Hotels and Restaurants for $430 million; Marriott acquired Delta Hotels

& Resorts for $135 million. These mergers have been taken place in hotel industry for supporting the small organisations in maintaining the suitability and assist such firm in development (Chathoth and Olsen, 2007)

The purpose of integration is to support fulfil the demand of wide range of customers and provide them with high level of satisfaction. Integration concept has been evolved and accepted by many of the companies in hospitality industry considering the  in demand of products as well as services. Integration strategy  has helped the PKF hotel and many other organisation in hospitality industry in delivering the quick and quality services to customers. Integration has great importance in hospitality industry. Effective is needed for delivering best services to customers. PKF hotel   and other companies has merged with enterprises in tourism sector with the purpose of providing high level of satisfaction to visitors. Hotel chain such as  PKF  has utilised the integration strategy in which firm has planned to outsource booking facility to some outside agency to make customer base increased. By adopting this strategy business entity has able to fulfil the queries of customer in systematic manner. Integration strategy has provided company a chance to increase their working efficiency, expand their business operations. It has allowed firm to provide additional facilities or services to customers. Integration strategy also supports an organisation is resolving several business related issues. Vertical integration assists in managing the business in systematic manner. Tourism companies provide several facilities to customers by entering into a contract  with PKF hotel which has enabled business entity to deliver quality food to its clients. Integration strategy utilised by a company has provided firm a chance to deliver services at reasonable price. It has also allowed an organisation to access the resources which are required for providing normal or basis facilities to visors (Campos-Soria,  Marchante-Mera and Ropero-García, 2011) For instance, France’s Accor Hotels bought the Toronto-based parent company of the luxury

 Fairmont which has enabled business entity to provide luxury facilities to clients. Integration also assist  tourism as well as hospitality sector to work together by sharing their customers and resources. PKF hotel manages their business resources through horizontal as well as vertical integration. The implication can be analysed in hospitality sector as it assist an organisation in bringing improvement in businesses and satisfying the needs as well as demands of customers (Espino-Rodríguez and Taylor, 2006)

2.2 Analysing the way integration have effect on hospitality business

Integration supports business entities in increasing their core competencies and also competitive strength. It allows  firm to gain competitive advantage in the market. Integration strategy has helped business entity in ensuring the effective as well as efficient utilisation of resources.

PKF hotel  is a well known market leader in the field of hotel, tourism . This is the first company who offering specialised consulting services for the hospitality industry. The main aim of hospitality industry is to build strong and fruitful relationships with the customers. And to promote the services and to promote the sale of goods provide by this organisation . If any company used to integrate that means they want to expand their markets to get global exposure. There are two types of integration horizontal and vertical.

Horizontal integration:-  It means company can go through acquisitions and mergers to expand their business horizontally  (Baraban and Durocher,2010)

Vertical integration :- Different members of supply chain in vertically are responsible for producing different products.

            In the case of PKF hotel  has adopted integration for complete diversification of the products  and services . Any act of helping or any service of being hospitable can be stated as hospitality. In the  travel and tourism industry where hotels provide extra services like booking a cab , flights tickets etc. All comes under hospitality. Using this integration any organization can expand their business. The main aim of hospitality is that tourist must be comfortable and are enjoying their stay (Buhalis and Crotts,2013)

            It is important that any services which is provided by company should be same at all places, anything less would be not acceptable and it will be threat for its reputation. If integration has done between two big organizations it will affect to the society and for small organization .

            The main importance of integration is  to provide competitive advantage. Merging of two companies will help a lot in satisfying and attracting more customers. Monopoly is market where only one seller and many buyer so this integration of two organization or a company can created by providing the best which is not available easily. After doing integration company having more dominant in nature and its reduce the choices of customer (Alonso and O’Neill,  2010)

Integration will also help in diversifying the business in other countries. Globalization has an effect on this country. Tourism is a very revenue generating for any country. So this has been encouraged the company to think worldwide and to expand their business . The most important  impact of integration would be the economies of scale can be achieved . This also reduce the operating cost and the profit should be maximised. By following any integration method the cost can be reduced which helps in increasing the profit. Integration will also help in diversifying the business in other countries . PKF hotel  is one of the large industry of tours and travels and hospitality . After integration the company should diversified their business globally . PKF hotel main aim is to provide good services to their customer and to earn more profit. In integration company can expand their business globally and earn more reputation and to create more and more customer  . So integration has a good effect hospitality business  (Litvin,Goldsmith and Pan, 2008)

TASK 3

3.1 Creating a rationale for selected project

PKF hotel is planning to enter into the food and beverages business .As it has been analysed by business entity that this field has wide scope of growth and several benefits can be gained. Management team in an enterprise has realised that increasing in level of income by people and economic development has inspired people to live healthy life and spend more on foods and beverage. Top level managers are planning to establish certain standards for improving the quality of food and services. As this strategy will support business entity in providing high level of satisfaction to customers and influencing people to buy products or services. The standards are being set by an enterprise with the purpose of fulfilling the needs as well as  requirements of customers seeking for different and unique tastes in food products. In present era,  customers in the market are mainly conscious about the quality of good rather than price.  Inauguration function will be organised at place near shopping mall .This location has been selected as  upper-class people and visitors from different countries come at that place for spending leisure as well as quality time. social media sites and new promotional technique will be used by marketing team in  PKF hotel for promoting the products or services as well as generating brand awareness. The marketing  manager in an enterprise to reach more customers is simple to apply as restaurant is making use of sponsorship programs and offering discount on goods (Crotts, Mason and Davis, 2009)

3.2 Developing the rational for selected project

Product service concept: The  PKF hotel  has adopted the concept of  provide customer a comfort as well as quality services during their stay in hotel. Purpose an organisation is to provide high level of satisfaction to client and allow customers to have good experience. Business entity is mainly concerned with providing facilities to customers so that their stay could be pleasurable. Management team in an enterprise has planned to make separate department who will responsible for handling the queries of customers. Role of special department is to gain feedback or advice from client. As this will assist business entity in recognising the area of improvement and analysing the way change can be bought in particular field.

Target customers:By analysing the market as well as economic situations ,  PKF hotel has planned to target people belonging to the high income level group. As by targeting such people business entity will be able to increase its profit margins. Management team in an enterprise has also planned to target  youth and also working  men and women. As it will be easy for firm to attract these people, as they are working and these people prefers to purchase food from hotels because of lack of time for cooking.

Location: The business will be located at the central are in London and also near shopping mall. This specific  location has been selected as it will provide customer an ease in availing the products or services offered by an organisation. As company will be located at the centre of the city, all the resources which are required for smooth functioning of business can be easily accessed from the market.

Funding :management team in  PKF hotel has planned to make investment mainly in two fields. These are training to employees and on the infrastructure. As establishing a hotel is very big project , the resources are required to be allocated efficiently as well as effectively.

Licensing:All the permission related to the business operation will be taken by the specific legal authority.

Design of the hotel: interior management company has been hired for decorating the hotel and designing the interior. Ambience of the hotel will be luxurious , management team in an enterprise is planning to give the royal look to hotel. As this will help business entity in attracting more number of

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