Implications of integration to the hospitality industry
When outsourcing is not a part of the company's operations, it becomes possible to reduce the expenses used to cater for different operations. Globalization has facilitated integration where companies join hands and work towards the achievement of common goals. There are different types of integration applied in the hospitality industry including; Vertical integration This happens when a company in the hospitality industry buys another in the same distribution chain. In other cases, a company in the hospitality industry merges with another one so that the two use joint efforts to achieve set goals and objectives. Vertical integration in the hospitality industry takes place with the aim of maximizing profits. Hotels at the same level of operations may come together to ensure that they combine efforts to overcome competition by others in the industry (Hon, 863).
Through horizontal integration, organizations become complementary and assist each other to achieve set goals and objectives. Horizontal integration is common in the airline companies and the hospitality industry. The airline companies, for example, gather data from the hotel industry which they then use in making decisions on how to perform their operations. The availability of accommodation determines how the airlines perform their functions. Branding determines the ability of an organization to create loyal customers. For example, the Sheraton Pine Cliffs hotel present similar products and services to the customers across their different branches. In this case, when a customer has an experience of the services in the hotel, it determines their choice of accommodation when traveling to another city where the hotel has its branches.
When the customers spot any difference in pricing or services offered, they feel that they should not pay for the services. Integration in the hospitality industry, therefore, focuses on the branding strategy and how well the customers know the brand based on their past experience (Šerić, 149). As a result, there might be the development of unfair competition and some of the firms in the hospitality industry have suffered while others have benefited. Some travel agents have been thrown out of business because the development of technology has led to the creation of virtual platforms. Advanced technology has resulted in changes in the hospitality industry where companies have to adjust their operations to meet the changing trends in the business environment. E-business has taken over in the hospitality industry and most of the companies have implemented strategies that will meet the demands of all customers in the market.
The use of technology has also enabled the large firms in the hospitality industry to have a competitive advantage over the smaller companies. Through expansion, globalization will become a successful activity and will have a positive impact on business operations. The combination of business activities between local and global organizations has facilitated the integration of employees from various parts of the world. This has also contributed to the development of work relationships and teamwork that has made the hospitality industry have the ability to meet the needs of customers from various parts of the world (Hon, 869). Through globalization, the hospitality industry has enjoyed reduced trade barriers and this has facilitated their success in various business activities. Integration has facilitated successful operations by different firms and made it possible for the companies in the hospitality industry to successfully take care of the customer needs.
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