Study of Thomas Cook Group
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Hospitality service can be stated as the crucial concept in travel and tourism business as it helps in delivering best services to people and assists them to gain best travel experience. However, such services usually connect users through internet. In addition to this, there are varied hospitality services that are delivered by any service provider i.e. accommodation, food, laundry services, entertainment and so on. Thus, it can be stated that it is essential for travel and tourism business to provide the best customer experience which helps in expanding the scope and scale of hospitality industry. In general, hospitality organization interconnects its functions with travel and tourism business so that they can work together and attain customer satisfaction. However, travelers are spending their vacations through visiting different destinations that requires the best knowledge. Therefore travel and tourism business is required to provide them high advantage by rendering peoper knowledge and information.
In the present study, Thomas Cook Plc has been undertaken which is a British multinational travel and tourism organization. It is also listed in London Stock Exchange. It contains varied hospitality operations that help in attracting tourists and satisfying their needs. For instance, it involves varied holiday packages, cruise and bookings for hotels and resorts as per the clients' requirement so that they can attain maximum satisfaction. Company also owns the scheduled airline Condor and booking website such as Hotels4u. Hence, it helps in delivering a vast range of products and services to the clients so that they can attain quality travel package.
Moreover, it is essential for organization to possess different products and services related to travel and tourism business so that tourists select the same company whenever they travel. In 2007, Thomas Cook was merged with My Travel Group Plc and expected to make savings of around 75 million Pound a year. However, such integration helped Thomas Cook to gain relatively high percentage of clients using travel and tourism services. Further, the study undertakes varied tasks such as scope and scale of hospitality services within travel and tourism sector and also examines the role of hospitality function within Thomas Cook (Cummings, Kwansa and Sussman, 2013). Other than this, this report evaluates different horizontal and vertical integration within hospitality business. At the end, a rational has been developed for a new hospitality business that outlines the product and service concept.
A. Scope and scale of the hospitality industry within travel and tourism sector
It can be stated that hospitality industry possess wide scope and scale within travel and tourism sector which involves services related to accommodation, food, laundry, entertainment etc. However, all these products and services are important within hospitality business as it help in gaining customer satisfaction. Hospitality sector as well as travel and tourism business is interconnected with each other so that required products and services can be delivered to clients as per their needs. As per the global perspective, both these functions interconnect with each other and provides different services to clients so that they can gain comparative advantage. Hence, in regard to this, Thomas Cook is providing the best travel experience and accommodation services so that guests can feel satisfied (Gilmour, 2013). Moreover, it assists travelers to choose similar organization as a tour operator whenever they plan for spending their vacations. Thus, it creates a positive brand image of firm in the market and helps in increasing profit percentage.
Furthermore, it can be stated that both hospitality business as well as travel and tourism sector interconnect with each other and involve varied facilities such as transportation, cruise, food and beverages, entertainment etc. in order to attain customer satisfaction. However, through such type of activities, scope and scale of hospitality business are increased within travel and tourism sector. Thomas Cook being a tour operator is required to make good connection with varied hotels so that they can suggest and provide best deals to travelers. Further, scope and scale of hospitality services are wider and thus it helps in delivering best services to clients and attain satisfaction. The role of hospitality in Thomas Cook is very extensive as it helps in providing wide range of products and services in order to fulfill the needs of guests.
Further, there are varied key roles and operations within hospitality business which help in providing the best services and products to clients in order to attain satisfaction. Following are the two different departments within hospitality businesses such as front house and back house. In the front department, it involves reception counter which is directly connected with travelers and focused on gaining their views and opinions in regard to make suitable changes to attain results. While, back house department involves people who work behind the scenes in order to provide the best quality services to guests (Norton,
It can be stated that role of hospitality provisions plays a critical role within travel and tourism business. However, hospitality business has become increasingly popular as it interprets varied functions within travel and tourism sector. Hospitality provisions as well as travel and tourism business are interconnected within each other so that best products and services can be delivered to guests. For instance, hospitality provision involves varied components such as food and beverages, accommodation, laundry services, transportation and entertainment etc. However, all these components of hospitality industry are effective and thus, Thomas Cook is required to involve them in order to plan an effective travel package for its clients. However, all these functions help business to ensure that consumer should feel satisfied and thus hotel can gain repeat purchases.
Furthermore, role of hospitality provisions is effective as it assists in providing the best quality products and services so that needs of clients can be fulfilled. However, Thomas Cook is required to plan the best travel package for its clients as per their requirements so that satisfaction can be attained. For instance, it is essential for tour operator to plan the best package for its clients so that better hospitality services can be rendered with the aim to make clients comfortable (Zeng, 2015). Furthermore, it can be stated that both hospitality provisions as well as travel and tourism business are interconnected with each other. For instance, hospitality business is required to deliver the best quality products and services to travel and tourism industry. However, through adopting different methods, role of hospitality industry within travel and tourism sector can be stated as follows-
- Holiday packages- Hospitality business plays a main role within the planning of holiday packages. However, Thomas Cook being a premium tour operator involves luxurious hotels within its lists and thus clients need to choose as per their preferences. However, if any traveler prefers to choose budgeted hotels then they need to select similar travel package (Barrows, Powers and Reynolds, 2012). Thus, it is essential for Thomas Cook to plan each and every type of holiday package so that clients can gain satisfaction.
- Conferences and exhibitions- Further, at the time of organizing international meeting and conferences, tour operator such as Thomas Cook is required to arrange the best luxury hotels with all the facilities of conference room, banquet hall etc. However, arrangements done by hotel should be best because international visitors will also be come to attend meeting or conference and thus, they should feel satisfied with the services of hotel so that they can contact the management of hotel for their future staying with family or friends.
A. Integration in hospitality and travel and tourism businesses
As per early 1900's, integration can be stated that businesses were focused on reaching economies of scale through which they were able to benefit themselves in regard to gain lower operations costs. However, hospitality businesses focused on providing their own products and services through in-house efforts and thus save lot of money which can be utilized elsewhere for attaining long run profit. Thus, such type of efforts by hospitality business helps in reducing outsourcing habit of hospitality firms. Hence, such type of integration helps hospitality firms to improve its global presence and achieve high market share (Bowie and Buttle, 2007). Through integrating businesses, hospitality firms can attain results with the aim to save cost and minimize expenses. Thomas Cook undertakes integration method that helps in improving its target market.
Integration among hospitality business and travel and tourism sector assists firm to interconnect different services and products so that they can produce required products and services and do not need to outsource it. However, both hospitality as well as travel and tourism businesses are integrated with each other so that different operations can be combined and executed together. Further, there are two types of integration i.e. horizontal and vertical that affect the hospitality business. Vertical integration can be defined as a process of merger through which firm purchases another company which delivers similar products and services. However, such factor is carried out by firm with the aim to maximize profitability and also benefits in terms of lower operating costs (Brotherton, 2013). For example, any premium tour operator who provides tour and travel services may buy airlinecompany or a hotel as it can supply both types of services which are crucial for holiday package industry. However, Thomas Cook being a premium tour operator has started or merged with different hospitality businesses in order to provide a wide range of packages to clients.
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While, on the other hand, horizontal integration is important for firm that wants to acquire another businesses in order to expand their functions in different market and improve market share. However, it benefits firm to enhance the economies of scale and also maximize profitability. For instance, such situation happens with Thomas Cook at the time when they merge with another service provider such as passenger airline, cruise line etc. However, Thomas Cook also purchased an Airbus A321 in 2014 in order to attract potential consumers and enhance market share (Dale, 2005). Further, Thomas Cook also provides varied distinct travel services such as flight tickets, hotel reservation and cruise facilities. However, such type of integration affects the hospitality businesses positively in regard to enhance market share and attain desired results in terms of maximizing cost and enhancing profitability.
B. The impacts of integration
It can be evaluated that integration impacts businesses in different forms and thus, it is crucial for business to respond effectively to such integration. It is as follows-
- Standardization- It can be stated as a complex and time consuming process in an industry which has varied variables. Further, there are certain processes that are automated and can certainly be standardized while human resource element with the business is a lot more difficult to standardize. However, people want that each and every branch of Thomas Cook worldwide should be same and thus provide similar services to clients with the aim to satisfy their needs (Shields, 2015). It also helps in improving the brand image of firm in the market. For instance, there are several components within hotel services that are required to be made standardized so that person traveling to such places receives similar quality services and attains satisfaction.
- Economies of scale and high market share- It can be stated that business reduces its operating cost effectively at the time of integration. For example, Thomas Cook being travel agency merges with varied hotels in order to improve the cost of investment linked with it. Thus, it helps in gathering benefits by providing a wide range of products and services along with satisfying the needs of consumers. Further, it is essential for business to properly plan the integration and also carefully carry out the investment activities with the reputed hotels and resorts so that it benefits business in the form of low operating costs (Unegbu and Audu, 2015). Also, with the help of integration, travel operators can lower its costs of packages and thus pass benefits to the clients. Thus, adopting such tactics helps firm to improve the level of market share and profitability. Moreover, travel businesses undertake horizontal integration in order to expand its market base while adopting vertical integration businesses can enter into new diversified market and thus attract an entirely distinct consumer base.
- Quality- Further, it impacts integration because it cannot be guaranteed that quality will enhance through carrying out integration process. For example, if any hotel is acquired by another business it cannot be determined that they possess a better service approach as compared to other. Also, workers of hotel are required to perform their functions effectively through minimizing error and delivering quality services to the guests (Picard and Moreira, 2015). Thus, Thomas Cook should maintain quality within firm at the time of acquiring other businesses or starting new diversified business in the market.
Furthermore, it can be conferred that both the integration methods i.e. horizontal and vertical are positively responded to undertake effectual decision making within business. Further, it also helps business to overcome all the results and thus attain proper outcomes in business at the time of practicing horizontal and vertical integration.
A. Rational for a new hospitality business outlining product-service concept
An outline or design of product-service concept is developed which is as follows-
- Food and beverages- It is also considered as a prime factor which needs to be planned and designed effectively within hotel. However, it is essential for hospitality firm to maintain their menu list and provide a wide range of food and beverages to its client in order to fulfill their demand (Lashley, 2013). Moreover, business should also arrange additional services for customers on different occasions such as birthday celebrations, marriage parties etc.
- Luxury rooms- It is essential for hospitality firm to develop luxury suites with well-furnished facilities that attract guests. However, accommodation is the main element of any hotel and thus it is essential to be well maintained and decorated so that it provides unique culture and ambiance to the clients in order to give the best value in return.
Wi-fi- Further, it is a basic necessity so that it is essential for a hotel to provide Wi-Fi to its guests. There must have 24 hour internet connection within every room so that client can access internet at anytime and anywhere within hotel campus (Law, 2010). For instance: providing such type of services maintains the image of hotel and grabs potential consumers for the long run (Mahony, 2007).
- Entertainment facilities- Hotel is required to focus on the entertainment part for clients. However, it is essential for business to provide varied recreational services such as indoor and outdoor gaming zone so that customers can relax. Thus, it impacts clients and attracts people to use the services of hotel constantly (McDonald and Hopkin, 2002). For instance: different facilities that can be provided by hotel such as swimming pool, badminton and squash court, indoor space for kids playground or mini club area etc.
- Payment options- It is crucial for business to be flexible while collecting payments from the clients. It means that hotel should provide varied options to guests to pay their bills using American Express, Master card, Visa or Debit card etc. Thus, providing varied type of payment mode helps in conveyancing clients and satisfying their needs (Edgell, 2002).
B. Produce a project proposal including target market, location, operating model and design based on a thorough market potential analysis
Furthermore, a project proposal needs to be developed that involves varied components which are essential in order to start a new hospitality business. It is as follows-
- Target market- Target market for 5 star hotels is upper middle class people or business professionals. Thus, it is essential for business to market its products and services through social media, mobile marketing, e-mail etc. Also, firm should provide the best quality services to consumers in order to retain them for the long run (Tapking and Yang, 2004).
- Location- However, luxurious hotel should be situated in Manchester that is developed city in the North West of England and it is a preferable location by clients to visit the place. Thus, it helps in attracting consumers and enhancing the sales and profitability.
- Operating model- It involves numerous departments within hotel and also includes staff that is required to maintain consistency within firm. However, layout of the hotel should be such as that there should be front desk within the lobby of hotel and from here, guests should be welcomed by the hotel staff. After that, the bell boy will take the luggage to the respective room (Poulston and Pernecky, 2014). There is another crucial department which is food and beverage department and it is their duty to provide quality food to guests. Further, housekeeping department is required to maintain proper cleanliness and provide hygiene facilities so that customer satisfaction can be attained.
- Market potential- It can be stated that there is high market potential within hospitality industry because consumer frequently demands for unique products and services. Also, business should develop varied recreational facilities as per the consumer preferences so that they can give tough competition to rivals (Norton, 2015).
It can be articulated from the above study that hospitality provisions as well as travel and tourism businesses are interconnected with each other. However, it helps firm to improve its scope and scale along with satisfying the requirements of clients. Further, businesses such as Thomas Cook is required to undertake horizontal integration so that they can provide varied products and services to the consumers and expand the market share. Moreover, a rational proposal has been developed for a new hospitality business and its potential market analysis has been done so that market share can be enhanced.
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