Impact of Integration on the Hospitality Business

1.1 Interrelationships between hospitality and wider travel and tourism businesses

There is strong relationship between tourism and hospitality. Hospitality industry is considered as service providers for the travel industry. There are many hotels, restaurants those which are offering amazing services to the travellers. Travel business conduct tour for the visitors, they make connection with hospitality business those which can offer these visitors facilities to stay and eat (Cook, Hsu and Marqua, 2014). Hospitality sector is integral part of entire travel industry that helps in making people satisfy in destination and giving them amazing experience. There are many big hotels, night clubs, food service providers those are offering high quality services to travellers. Travel and tourism industry provides accommodation facilities, transportation facilities to the visitors. This sector cannot meet with needs of consumers without support of hospitality industry. Accommodation is the main aspect of holiday packages that is provided by tour operators. Aviation industry also the part of hospitality industry. Tour operators have to book tickets of the person. They ask for the budget of the travel and accordingly design entire tour for them. As per their budget they book air ticket, hotel. Visitors travel from one place to another from different purposes. Theme parks are considered as most amazing attraction point (Tussyadiah and Pesonen, 2016). There are many theme parks where travellers can stay. This is also the feature of holiday package. Thus, there is close interrelationship between hospitality and travel and tourism industry.

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The role of hospitality in supporting various types of travel and tourism such as business travel, aviation, conference, theme park, visitors attraction etc. In order to that, hospitality play role in increasing visitor attraction for hotels services, theme parks, resort facilities, restaurant services etc. For example, Hilton and Thomas Cook connect with each other. Travel operators are recommended to their tourist to stay in Hilton. Ultimately this type of interrelationship helps in increasing business of travel and hotel. Taxi services are also connecting with hotels that helps in easily reaching in the hotel place. It is easy to visitor who are not known about nations.

2.1 Implications of integration to the hospitality industry

There are main two types of integration: vertical and horizontal. Vertical integration is the process of buying another company or merge with other firm. In the case of France’s AccorHotels, it has acquired Toronto based parent company (Xiang and et.al, 2015). Vertical integration impacts positive on business unit and has helped in raising profit of the organization. Vertical integration supports in minimizing operational cost and control over distribution chain as well.

Horizontal integration is another type of process in which companies expand their business by merging with the company that is having same distribution chain. As in the case of Marriot international hotel has takeover Starwood hotel & resort. This takeover was profitable for the Starwood hotel & resort because this has supported in maximizing its profit and increasing its number of customers as well (Kasiri and et.al, 2017). Horizontal integration is complementary for the companies because it gives additional benefits to the business and supports these firms in expanding their operations across the world. It also aid in raising brand image of the entity to great extent.

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Implication of integration:

There are various implications of integration such as importance of branding and pricing policies, association with large organization etc. In order to that, Marriott takeover Starwood, so that their branding and pricing policies are increasing, profits enhancing of both hotel business. If Marriott is associated with Intercontinental hotel, so that it is impacted on brand and pricing on both the businesses. This helps in increasing profits and value of product as well as services in front of consumers. This aids in expanding of individual business of hospitality sector.

2.2 How integration has affected a hospitality business

There is a huge impact on hospitality business with the integration of travel and tourism sector as both these industries helped each other in increasing their business in the market. It also helped in branding each other. For example, if a travel company ties up with a hospitality industry than it will help them in booking rooms of their hotel from their customers if they choose to travel with them which can be beneficiary for both of them (Interrelationship Between Hospitality And Travel Organisations Tourism, 2015). There is a huge impact of this integration on hospitality industries, such as,

• It will help them in increasing the economies of scale and their market share which will eventually increase their business in the market and can gain a good revenue as well.
• It will also increase standardisation of both the industries. It gives them control over providers at different or the same stages of the distribution chain, with the aim of increasing market share, reducing operating costs, improving quality and maximising profitability (Tussyadiah and Pesonen, 2016).
• It will help them to enhance their quality of work. This will increase their productivity as well which can be very useful for them in expanding their business as well.
• By integration, it is reduced independent business in the hospitality industry. This also decrease profits and branding image to individual hospitality organization.
• But some time, it is positive impact of business in terms of increasing market share in the hospitality industry. This also enhancing pricing and branding if business.
• Through integration, it is increased globalisation of the hospitality industry. It is negative impact on overall sector of hospitality.

CONCLUSION

From the above report it can be concluded that hospitality and travel and tourism business works effectively together. Both are interrelated with each other as they helped each other in increasing their business. It also discussed about the different types of implications, for example, vertical and horizontal. It also discussed about the impact of this integration on hospitality business.