This is a solution of Unit 2 Sample Of Hospitality Assignment Assignment in which we discuss Developing business
LO2 Understand the impact of integration within the hospitality industry
P2.1 Analyse the implications of integration to the hospitality industry
Integration had at the very first gained popularity in the 1990’s when the businesses had laid focus on reaching the economies of scale, by the way of which businesses benefited from the lowered operating costs and when the companies were providing their own products and services by internal efforts then outsourcing was not a longer period. Hence were saving the money of the company in long run. Integration also helped the companies to gain global presence and have increasing market share. There are basically two types of integration as vertical and horizontal integration (Sloan et al, 2013). There are various implications of integration on the hospitality industry and those are:
The success of the tourism industry is dependent on the branding techniques which are adopted by the key players and how effectively the messages would have to be delivered to the target markets. The clients would have to be associated with such brands as is the case with Ritz Carlton hotel. With the help of integration the hospitality business flourishes by having a new name and brand and it becomes less riskier for the company to start a new venture, although at times it is difficult for the customers to trust on a new company but if the company which is merging with another is already having good name in the market then to generate trust is not a difficult task. See more : Internet Marketing Assignment Help
Many of the UK’s tour operators have purchased hotels across the globe so as to increase their presence globally. In this way they are able to control the hotel rates and upbringing affordable packages for their ultimate clients, thereby increasing sales. (Barrows, Powers, and Reynolds, 2012) 8
Control Over the Market
Integration amongst the large organisations is a threat for smaller organisations and behavior on the other hand internet is limiting the forward integration especially in cases of holiday packages. Although the prospective clients benefit from the low cost over internet but could be a threat for the society as many people due to this reason may suffer from the unemployment stage. As direct selling over the net is employed by the hotels as Carlton also does the same so as to have its own online booking system, in this manner the reservation process becomes easier, simpler and cheaper as well, but the reservation team is required by certain hotels for making the bookings over phone as some of the clients feel it riskier to pay on the internet for accommodations and may prefer to give the personal details and payment physically or by being there.
With the help of integration the company expands successfully in its goal, as globalization is the resultant of collection of expansions which is effectively analysed both internally and externally. The internal globalization is where the employees from around the world would develop relations with one another and the external globalization is linked to the team members who interact with the clients from everywhere. Globalization is linked with reduction in trade barriers, basically within the European Union. As these countries also benefit from the lower priced products. When one is purchasing in bulk then it readily benefits to the catering providers and to accommodation providers as well. As is the case with both the hotels Carlton and hotel Savoy that which have its branches in various areas and tend to provide excellent service in each of its chains.
Therefore there are very many practical implications of integration on the hospitality sector as organisations are having very different firms under their control would find it a bit hard to manage each and every aspect of such firms. As it is the case with the 9 vertical integration that those firms would be under the control by different outlets but would be under one organisation only. This will create problems for whole of the organisation especially in case where the majority problem has aroused in any specific sector and the organisation as a whole will move towards the crisis control. (Saunders, et. al., 2009)
P2.2 Discuss how integration has affected a hospitality business
Integration is having an effect on the hospitality business as in cases where one or more than one company merges then the whole of the organisation would be credited being the main organisation under the control. For example Ryan Air and Easy Jet both of them are having flights to the destinations across Europe at affordable rates are having a decision of merging and one company declines then it starts affect the other and would ruin the reputation as well. No doubt integration is positive and effective and there is no meaning of having negative effect as one management is placed with two different companies. Therefore there are three basic effects of integration: Click Here
Economies of scale: It is so as the operating costs of the company can be reduced when integration takes place between the companies. When a tour operator over takes a hotel in that case cost is associated with investment which would be high and the benefits attached with wider variety of products or a service is also seen. In such a case the dependency of the tour operator on other accommodation providers would be reduced as most of the operations are taken good care within the company. For the most reputed hotels for which the tour operator is able to invest then it would be more benefited from the point of view of operating cost. In this manner the tour operator might lower the cost of their packages and benefit the consumers. With the help of horizontal integration, the companies can extend their existing client base whereas by vertical integration companies would tend to enter into new markets and attract different customers. (Sustainable Tourism, n.d.)
Standardization: It is a complex and time consuming process in companies which are having many of the variables as the Carlton Hotel. The automated process could be 10
standardized, but it is difficult to standardize the human element. For example as discussed earlier the Hotel Savoy provides services in various locations, all being standardized and of quality. The destination which the people are visiting and the procedures followed by the employees are of identical nature and same it is for food. Therefore the company or the hotel is efficient, time oriented and having the control over the processes. Standardization is possible in hotels but it is limited. For example the way the telephone operator is answering the phone could be standardized.
Quality: It is not necessary that quality could be improved by way of integration. It totally depends on the variability of the human element, as for instance is a hotel is taken over by another person then it certainly does not mean that the new owner is going to make improvements in quality. Managers should therefore listen to their employees, what they are trying to say as they are the people maintaining regular contact with the customers. The hotels which are within the same hotel chain tend to face problem like that as it can be a case with Hotel Ritz Carlton chains even though they are trying hard to offer the quality services. (Barrows, 2011) 11
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