Contemporary policy and practice in hospitality management
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
EXECUTIVE SUMMARY Different types of hotels including boutique hotels are availing the service of 3rd party companies because of several reasons. The purpose of this research report is to evaluate the impact of third party online hotel booking websites on the hospitality and tourism industry. It states how hotel organizations can exploit and compete with the widespread growth of these websites. The study has been developed in order to create an in-depth analysis
of the
topic
and
various
factors
affecting
its
growth
and
development within the market. The study has been done on the basis of secondary research analysis. ABC is a finest 4 star boutique hotels located in Liverpool. The boutique delivers an exciting and vibrant guest experience to the local community. The hotel also takes the service of 3rd party booking websites such as Expedia and hotel.com. The study focuses on analysing the factors which motivates the businesses to develop third party portals for business growth. The stated company has been taken as the base for the research and findings. The report helped in analysing the advantage of third party portals to the company and consumers as well. It also focuses on the challenges faced by the companies in terms of technological factors etc. The report helped in analysing discounting strategies and its impact on the present business. Models such as PESTEL analysis has been used to find out the organizational position and threats associated with it. Th final part of he report discusses about clients and their needs. Hence, the study helped in developing a clear and effective analysis of third party portal for the stated business. It could be concluded that ABC has developed an effective brand image
within
the
market
using
the
stated
measure.
However,
organization still has effective scope for development.
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
the
TABLE OF CONTENTS Introduction ............................................................................................................................... 3 Popularity of 3rd party booking websites .................................................................. 3 Critical analysis of use of internal IT systems to market and promote the business .................................................................................................................................. 5 Critical analysis of discounting strategies ................................................................. 7 Pestle analysis of ABC boutique .................................................................................... 8 Critically analyse change management issues with competing with third party players .......................................................................................................................10 Critically discuss the client groups .............................................................................10 Conclusion ............................................................................................................................... 11 REFERENCES ...........................................................................................................................12
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
INTRODUCTION At present, in the hotel industry, 3rd party booking websites have gained so much popularity. Different types of hotels including boutique hotels are availing the service of 3rd party companies because of several reasons. The purpose of this research report is to evaluate the impact of third party online hotel booking websites on the hospitality and tourism industry. It states how hotel organizations can exploit and compete with the widespread growth of these websites. At last the report will end in analysing some of the change management issues associated with the services. Popularity of 3rd party booking websites ABC is a finest 4 star boutique hotel located in Liverpool. The boutique delivers an exciting and vibrant guest experience to the local community. The hotel also takes the service of 3rd party booking websites such as Expedia and hotel.com. These are the bodies which assists the customers in doing reservation for them on behalf of the hotels. Customers can compare prices of different types of hotels on these platforms (Acton, 2012). There could be many reasons why hotels make use of these services. Increasing customers – One of the best advantage derived from taking the services of these websites is the ability to gain more customers. By taking the services the boutique can reach to more number of customers which can increase its occupancy rates. More occupancy means more profits for the hotel (Anheiser, 2011). It can increase the reputation of the organization in the local community. Hence in this manner ABC will be able to reach the target customers. Ease of use – Consumers tries to make comparisons between several hotels before taking a particular decision. The busy consumer is expected to pull up comparable hotels in one browser window despite of searching six different hotel brands. Third party sites facilitates the ease of price comparison for them. It will encourage loyalty in the Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
customers who are looking for ease of reservation process (Cazcarro, Hoekstra and Chóliz, 2014). Price – Another reason why boutiques approach to third party services is the price. Consumers usually get low prices on these websites. The prices are often less expensive as compared to the listed price on the hotel website. However it is not a profit making situation for the company but at least they are getting customers for the business. Promotion – Through the third party channels, these boutiques get the chance to promote their services among the masses. The customers can see each and every information about the boutique on the websites (Falk, 2011). They promote the name and services of the company
and
it
came
into
notice
for
the
customers.
This is a sample on Contemporary policy and practice, for complete Assignment writing Kindly, contact us at: +61 879 057 034
help@instantassignmenthelp.com.au
Quick payment – Online booking systems requires customers to make prepayment for the activities and rentals. In this way company can put the money into its pockets quickly and there is no need to make a request a deposit or wait for payment on the day of the transaction. Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
Advantages for the consumers There could be different reasons behind the popularity of third party websites among the customers. These can be discussed as follows: Price - The first and the most obvious benefit is the price. The prices placed on the sites are comparatively less expensive than the listed price on hotel websites. It is evident that price is the biggest influencing factor for every customer (Fons, Fierro and y Patiño, 2011). They will definitely drive towards hotels which are offering them better prices. They can also easily compare the prices between different options and then take a sound decision A faster booking process – These platforms also offer a faster booking process. It offers ease and comfort to the customers. They can easily book their accommodation. The process becomes even faster in case if the individual is a repeat customers and the website is already having all the details about them. Infrastructure – The infrastructure behind sites like Expedia, hotel.com etc, is rock solid. It means booking and payment process can be seen very reliable (Future trends in the tourism industry. 2012). These things attracts the customers and make them go towards adopting the services. Range of options – Another benefit derived by the customers is the availability of wide range of products and services. On these websites, they can do various types of comparison on the basis of price, reviews, facilities, food etc. It helps in making their decision making process more sound and effective. Easy availability and accessibility – The third party website services are opened for 24 hours a day (Blanke and Chiesa, 2013). Customers can access at any point of time and it is very useful in case of emergencies. They do not have to wait to book a tour or boutique. Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
Critical analysis of use of internal IT systems to market and promote the business Apart from having many advantages from the use of IT systems, the boutique also suffers from many drawbacks. These are as follows: Expensive installation – The installation of IT system can be very expensive as they tend to be custom made. The website must contain the user friendly features which can offer comfort and relaxation to the customers (Cuccia and Rizzo, 2011). The installation is not easy as lot of research and development work is needed on it. For a small boutique it may be difficult to adopt the IT systems into the business. Need of internet access – If the boutique is running its operations in the remote areas where there is no availability of the internet, then it may create many disturbances. There is a need of reliable internet access so that reservation status can be checked. Till date there are many areas where internet is not available for the local communities. It is also evident that without internet life is considered dead for the humans (Hall, 2011). It may create lack of knowledge and information for the customers. Hence this may restrict the marketing and promotion activities of the company. So constant access to the internet is needed in case of third party booking services. High commission charges – The boutique can also face high commission charges on use of third party website services. It can be a big drawback as it may affect the financial position of the hotel. These days the websites charge different types of expenditures for giving the services (Liu, Tzeng and Lee, 2012). It can be difficult for the hotels to meet up those expenses. Hence hotels will have to look for websites which charges appropriate prices and delivers quality services. Technical errors – Sometimes technology also comes with many flaws and errors. These errors can negatively impact the functioning of Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
the websites. The systems are to be highly reliable. In case if the systems breaks down, then a lot of business can be lost for the company (Sundbo, Orfila-Sintes and Sørensen, 2007). The technical errors can occur at any point of time without any estimation. The consequences of the errors can be very painful and devastating for the business. Apart from that it will also affect the reputation of the boutique within the market. Hence the systems are to be free from errors and must be capable of handling the issues. In case if anything happens, appropriate measures are to be adopted at immediate point of time. Skilled workforce – In order to operate the IT systems for the purpose of promotion and marketing, there is a requirement of highly skilled and talented manpower. These people must be skilled enough to fight with the issues which occur during the functioning of websites (Willis, 2011). However affording such IT guys can be difficult for the boutique because generally these people are paid high salaries. This may disturb the financial budget of the business and also act as financial burden. Employees are the assets of the company and adequate value should be given to them for the contribution they make towards the business. Lack of consistency – Another point of concern for the users is the lack of consistency in the services. It has been seen that due to technical errors the IT systems loses their consistency in the delivery of
the
services.
Due
to
inconsistency
customers
faces
many
inconvenience and discomfort (Tourism today. 2014). It also damages the reputation in the local community. Hence there is a need to have consistency in what has been offered as this helps in promoting customer loyalty.
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
Dependency – In case of third party services, the boutique will have to remain dependent on the website for the business. This dependency may create many chaos. High dependence may also lead to loss of clients from the other sales channels. It may also affect the quality of the services creating lot of inconvenience for the customers (Impacts of Tourism. 2014). Selection of wrong channel – It is believed that not all the online booking systems are equal. The use of IT systems can be frustrating if it offers poor customer service or few features. Hence in this case it is important to do the homework first and select a system which is long lasting and effective. It must be capable enough to provide great amount
of
support
(Anheiser,
2011).
This is a sample on Contemporary policy and practice, for complete Assignment writing Kindly, contact us at: +61 879 057 034
help@instantassignmenthelp.com.au No perks available – When customer book through third party sites, they are not liable to earn points through the company’s loyalty programs. It is a loss for the consumers as well as the boutique (Janta, 2011). It is decreasing the loyalty rate for the business. Another perk for consumer booking direct is the online booking systems that the hotel brands offer. Consumers are able to establish an account and save their preferences. It makes the reservation process easy every Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
time. Hence the boutique is required to advertise this perk as a method to attract more direct reservations. Poor customer service – It has been noticed that more third party website outsourced their customer service departments. It is a drawback for the hotel itself. In case of third party online booking, the website acts on the behalf of the hotel, so whatever the wrong happens will reflect on the image of the hotel (Novelli, 2008). In case one bad service experience, next time the customer will hesitate to use the service. Critical analysis of discounting strategies There can be many discounting strategies used by the companies. These are as follows: Improving the cash flow – Giving discount is an effective approach to give the buyers an incentive to pay the company early. For example, if the company has 60 days terms for invoices, then it might consider offering a two percent discount for the payments received within 30 days (Rihova, 2010). This gives customers a meaningful financial benefit and it also improves the revenue management by accelerating the payments. Solving issues – Different types of issues can be solved by giving the customers the needed discount. For instance if customers calls in with a complain, for refund etc, then discounting may be an effective method to resolve the issues and retain a valuable customers Reducing excess products - Company should focus on avoiding steep discounts. It may be more advantageous to sell of the stock than to keep the prices high (Falk, 2011). In case if the company is dealing with seasonal products or perishable items having limited shelf life, then adopting discounting approach can be effective. Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
Breaking into new markets and creating loyalty - When boutique expands into new market, discounting method offer ways to generate interest and encourage buyers to try out the new product. Discounts are very useful in building the customer loyalty in the target markets. Time sensitive discounts - Offering time sensitive discounts can also help in speeding up the sales. For instance discounts can be offered at any point of time (Huang, 2009). Driving volume – A very common strategy in the business to business market place is to extend the financial opportunities across the customer various business units. Offering a large volume of discount is useful in case if the business has a large customer segment. This approach can fill capacity and increase the purchasing power with the suppliers. Addressing a competitive threat - Firms operating in the B2B space make efforts to avoid discounting. However it creates a possible entry point for the competitors (Stronza, 2009). In case if other companies are using the approach of lower prices in order to increase the market share, then organization needs to consider making strategic discounts. It helps in customer retention and keep the barriers to entry high. Hence it is also an effective discounting strategy for the business. Pestle analysis of ABC boutique Political – The business of ABC is affected by political factors. The tourism authorities such as CTH (The Confederation of Tourism and Hospitality), Visit England etc affects the business practices of ABC boutique. There are some standards and provisions set by these bodies which are needed to be fulfilled by the companies operating in the industry (Acton, 2012). It is done to make sure that no inconvenience is caused to the tourists coming in UK. Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
Economic – Factors such as interest rates, inflation, recession etc creates an impact on the business activities of the company. At present the economic position of UK is stable and gradually it has recovered from the 2008 recession storm (Cazcarro, Hoekstra and Chóliz, 2014). The slowdown in the economy is causing the travellers to abandon the expensive hotels chains to save money. It sound good opportunity for boutique hotels like ABC. Social - The increasing role of social media also affects the business practices of the company. The taste and preferences of the customer changes from time to time. Factors like shifting values in society, changes in family patters etc also affects the business activities. Technological – Increasing integration of internet into various aspects of life can be seen. Presence of advance booking functionalities put an impact on the existing services. Use of Information technology systems has become essential because customers have also become technofriendly (Fons, Fierro and y Patiño, 2011). The third party booking websites creates many change management issues for the company. Environmental – There is an impact of changes in the weather conditions also on the ABC boutique. Customers would not like to visit a destination where the environment is not good. Things like natural calamities, environment pollution highly affects the business practices of the ABC. There is a potential damage to the reputation due to environment pollution (Future trends in the tourism industry. 2012). Legal - Any changes in the UK rules and regulations related to the hotel industry can affect the company. The Food Safety Act and Consumer Protection Act make influence on the functioning.
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
Critically analyse change management issues with competing with third party players Change management is a process of resisting and dealing with the change. There are many issues related to the change which can be faced by the company while competing with third party players: Market dominance – It is evident that at present the market is filled with the presence of many third party service companies. This has created high level of competition for the boutiques. Players like Expedia, hotel.com and many others are showing high level of market dominance. They are regulating the market conditions not giving too much space for the hotels (Cuccia and Rizzo, 2011). High level of effectiveness of the third party firms are shown on the customers. Dominance shown by one player is encouraging other players also to come forward and join the race of competition. These things are establishing many challenges for the hotels and boutiques. They are not
been
able
to
reflect
their
presence
within
the
market.
This is a sample on Contemporary policy and practice, for complete Assignment writing Kindly, contact us at: +61 879 057 034
help@instantassignmenthelp.com.au Diversion of customers - Due to easy accessibility of services, customers are also taking the help of third party websites. There are many advantages available to them such better price, faster booking Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
process, better infrastructure, range of options, user friendly features etc. Hence customers are preferring to do reservation from the third party despite of going to the hotel website (Liu, Tzeng and Lee, 2012). This has diverted the customer traffic for the companies. It is costing them in form of loss of customers. Government support – In the present context, for the benefit of the customers, government is encouraging the emergence of different types of third party websites. It is strengthening their position and giving them high amount of support (Huang, 2009). However it can be a de-motivating situation for the hotels as it is increasing the level of competition for them. Critically discuss the client groups Millenniums - These are the demographic cohort following generation X. It refers to the generation having the birth years ranging from the early 1980s to the early 2000s (Falk, 2011). The third party services are likely to be less availed by this generation because the economic prospectus for millennials have been declined largely from many authorities. Baby boomers - These are the people born during the demographic post world war II. These lie between the age range of 51 and 70. The third party service are likely to be less availed by this generation because this kind of people are more of traditional values and beliefs. XY generation – This is more referred to the young generation. It is believed that third party services are more likely to be used by this generation because they are more techno-friendly (Rihova, 2010).
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
CONCLUSION From the above study it can be concluded that third party website players have the potential to show dominance in the market. Gradually their presence in establishing in the market. Through the third party channels, the boutiques get the chance to promote their services among the masses. The prices placed on the sites are relatively less expensive than the listed price on hotel websites. The installation of IT system can be very expensive as they tend to be custom made. Apart from many advantage there are many disadvantages also in the services of third party. It is expected that mostly the services will be used by XY generation in the future.
This is a sample on Contemporary policy and practice, for complete Assignment writing Kindly, contact us at: +61 879 057 034
help@instantassignmenthelp.com.au
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.
REFERENCES Books and journals ● Acton, Q. A., 2012. Issues in Hospitality, Travel, and Tourism: 2011 Edition. Scholarly Edition. ● Anheiser, H., 2011. Cultures and Globalization: Heritage, Memory and Identity. SAGE ● Blanke, J. and Chiesa, T., 2013. The Travel & Tourism Competitiveness Report 2013. In The World Economic Forum. ● Cazcarro, I., Hoekstra, A. Y. and Chóliz, J. S., 2014. The water footprint of tourism in Spain. Tourism management. ● Cuccia, T. and Rizzo, I., 2011. Tourism seasonality in cultural destinations: Empirical evidence from Sicily. Tourism Management. ● Falk, J. 2011. Visitors’ learning for environmental sustainability: Testing short-and long-term impacts of wildlife tourism experiences using structural equation modeling. Tourism Management.
Instant Assignment Help Australia provides hospitality assignment help from professional management writers.