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    Global Hospitality and Tourism Issues

    University: ARU London

    • Unit No: 010
    • Level: High school
    • Pages: 9 / Words 2259
    • Paper Type: Minor Case Study
    • Course Code: MOD006065
    • Downloads: 274
    Question :

    Case Study

    Information and communication technologies (ICTs) have enabled the rise of “Collaborative Consumption” and consequently peer to peer based activity has major impacts on many established sectors, economically, socially and environmentally.

    The recent study held by the European Commission that highlights the sharing economy activity across Europe and has accelerated in the last two years, generating revenue of €3.6bn and facilitating €28bn of transactions in 2015.

    The peer to peer platforms has enabled the individuals to make use of underutilised inventory via free based sharing. This innovative approach was seen as an opportunity to enable individuals to rent short term accommodation, acting as intermediary to connect users and end suppliers for a serve fee, thus Airnb was established in 2008. The expansion of Airnb has been growing very fast with its popularity still climbing. There are 1.5 million accommodation listings are offered in 191 countries attracting 65million guests.

    Turnkeys Vacation Rentals was introduced in 2012 when founders John Banczak and T.J. Clark feels that the vacation rental industry was missing what most travellers value: the fine hotel experience of reliable customer service, cleanliness, and quality in what was otherwise a unique and exciting way to travel.

    Answer the following two Tasks:

    Question 1:

    Evaluate and analyse the success of Turnkey and its impact. If any on the hospitality industry.

    Important points:

    Address at least 3 areas of Turnkey's business:

    1. The concept of Turnkey (use of sharing economy)
    2. scale supply
    3. Consumer demographics
    4. Disruptive innovation
    5. Market trends in the accommodation sector
    6. Occupancy or utilization of rates
    7. Data to substantiate your analyzation of Turnkey's success

    Question 2:

    Advise whether the hotel industry should strategies to minimize the actual or potential impact of Turnkeys.

    Points to remember:

    Cover at least 2 strategies

    1. Product Differentiation
    2. Effective use of technology and innovation
    3. Development of long term consumer loyalty
    4. Digital connectivity and strategic drift
    5. Concept to develop with the strategic decisions making: SWOT Strategic Matrix

    Assessment Criteria

    • Present an understanding of global issues relating to the Hospitality and Tourism industry
    • Analyse theory and practice relating to global issues
    • Develop knowledge and understanding of the impact of global issues.
    • Assess and make recommendations for short- and long-term strategies in order to minimise the impact of the issue.
    Answer :

    INTRODUCTION

    Global hospitality and tourism issues are those issues which affect industry on level at once. Such issues include various things and one things which affects the most every business is those competitors which provide similar and substitute solutions and services. One such issue have been addressed in this report. In this report effect of TurnKey Vacation Rentals' (which offers a unique service to its customers in form of houses that they can rent for their holidays instead of hotels) effect on hospitality industry have been evaluated. Later what hotel industry can do to minimize actual and potential impact of Turnkey on its business.

    TASK 1

    Success of TurnKey and its effect on the hotel industry

    TurnKey which provides the service of vacation rentals in forms of homes and villas. This is a new and modern approach which allows people to stay at home when they are going for a vacation instead of traditional idea of living at hotels. In this concept people who are owner of the property list their property with TurnKey and those who are interested in living at homes and villas during their vacation can book those from the company (Liggio and Haggerty, 2019). To do this TurnKey's local hospitality and care team work the technology of TurnKey to deliver the highest standard of service for every home, every stay, every time. In this form of business guest and those who book homes for their vacation pays for their stay and home owners get their pay and TurnKey works as broker and earn its commission. In a very short time TurnKey have joined thousands of home owners with it across the US which offers more destination and places to people where they can spend their vacation. TurnKey also employ people from locals who are well known to the place and they know the locals and place very well this contributes in their better service to the guests. This team is dedicated for the TurnKey owner which focus on the success and care of their home. Other than this TurnKey also maintains best housekeepers in al its markets so house is always clean and al the time ready for the guest.

    Current trend in accommodation sector are adding to the success of TurnKey and along with that current trend also requires that TurnKey keep working on increasing its standards of service that it provides. Some of the current trends are as follows-

    Local Experience- This trend in accommodation sector is increasing day by day and travellers and guest desire to enjoy local experience. This is a positive factor for TurnKey as in this people who are on vacation stay at house and local team of TurnKey can manage that the guests have the best local experience and for that TurnKey employs local people who are well versed with the place.

    Healthy and Organic Food and Drinks- Another trend in accommodation sector is that with increasing number of people becoming health conscious they want to have healthy and organic food which do not affect health negatively (Apte and Davis, 2019). It is possible for people to have healthy and organic food when they stay at home as this provides personalised service to the guest and along with that local experience of the guest can also include local food experience of people.

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    Technology- Growing impact of technology on every sector have not excluded accommodation sector from this. Technology gives more and better customization, convenience and control than before. One unique addition in the experience of vacation have been added by TurnKey with help of technology is that it have introduced door code instead of keys this allows that guest can leave anytime and eliminates the problem of losing the key.

    Sustainability- People are becoming more aware of nature and natural sources and do like to associate with the companies and services which are ethical in their practices. People when stay at home during their vacation they do not have to think about such issues as house owner doing any unethical practice have less chances than big hotels doing so. Along with this TurnKey also needs to take steps for being more responsible towards environment and society (Mele, Gomez and Garay, 2019). In this their first step is that they give best services and assistance to TurnKey owners which are in first contact with the guest and experience and perception of guest is mainly affected by those only.

    Other factor which contribute in success of TurnKey is tourist type. First factor in this is that the TurnKey operates in US and people of US like to follow their own cultural framework and that is why they are more likely to visit local places during their vacation so that they can enjoy authentic local experience. There are various other factors which can include in this such as decision of tourist depend upon few factors like facilities, electricity, water, proper accessibility etc. houses of TurnKey do have all such things which is another factor of is success tough all the hotels do also have such factors but they miss the authentic local experience that home stay from TurnKey can provide.

    In relation with the impact of TurnKey on hotel industry. Existence and success of TurnKey definitely have added it in the competitors of hotel industry. There are various things and factors which make TurnKey a preferred choice for the travellers. Important element in this is increasing people with desire to have authentic local experience (Zavodna and Pospisil, 2016). TurnKey definitely do this better than any hotel can do. Other aspect is that it is able to provide more personalised service to guests than hotels. Hotels are concerned about many people at a time and TurnKey is not concerned about that many people at a time.

    In this manner hotels have competition from TurnKey. This is a relatively new experience than traditional hotel living which is also a factor that attract many people to stay at houses and this is possible and easy through TurnKey. There are some reasons which make TurnKey a better option than any other site which offers the same service and which is why TurnKey is a strong competitor for hotels (Njuguna, Namada and Muchara, 2019). This have impact on its business as those who are using hotels and its services during their vacation and travels now have a more choice in their options.

    You Can Also Read - Customer Experience Management of Ritz Hotel

    TASK 2

    Strategies of Hotel Industry to minimise actual and potential impact of TurnKey

    The world is getting more and more competitive with each passing day and reason behind this is ever increasing number of people who are able to provide same and similar services. This situation requires that companies are able to increase the sales of their products and services. In this report TurnKey and its vacation rental services were discussed with the factors which make TurnKey a preferred choice for the travellers (Sukawati and Astawa, 2017). TurnKey when provides vacation rentals for the travellers and tourists it affect the business of hotel industry and to deal with that and minimize the impact of TurnKey on its business hotel industry needs to develop some strategies which are as follows-

    Product Differentiation

    Widely used and one of the most effective strategy which can reduce actual and potential impact of TurnKey on hotel industry. Product of the hotel industry is their hospitality services which is advantage for the industry that it is very easy to differentiate based on different perception of the people who are using their service. But though hotel industry need to strategies their product differentiation for which there are various factors which hotel industry need to consider. Strategies of product differentiation is as follows-

    Product Positioning

    This refers to occupying a different place in the market and setting the organisation apart from others, in relation with this hotel industry includes many organisations which are part of this industry (Giantari and Jatra, 2019). This includes that all the organisations in the industry adopt their different positioning strategy which they think is suitable for their organisation. For the objective of positioning organisation can target a specific group of people, doing one or few things very well which can set apart organisation. Providing something which every organisation cannot provide.

    Other differentiation strategies are-

    Product Differentiation- This refers to differentiation of the product of the company in context of hotel industry. Differentiation of its services.

    Service Differentiation- This refers to differentiation of service which refers to supporting elements and customer service.

    Distribution Differentiation- This refers to differentiation in distribution channel of the company (Magnini and Simon, 2016). In context of hotel industry this is not possible reason being it does not provide any type of physical goods which can be delivered by any distribution channel.

    Relationship Differentiation- This includes difference on the basis of company personnel, employees and associates, team members with customer interface can provide and demonstrate competence, courtesy and responsiveness.

    Image Differentiation- There are various factors which manage and control image of the organisation such as communication, advertising and media of al types. Organisation can differentiate its image on the basis of this image.

    Price Differentiation- This refers to difference of the price of services which an organisation charge from its customers. There are various type of price strategy which are low price strategy and premium price strategy. Hotel can chose suitable strategy which can differentiate it from other and which can specially compete with TurnKey.

    Students Also Like to Read About - SWOT and PESTLE Analysis of Hotel Hilton

    Fostering of long term consumer loyalty

    Consumer loyalty is an effective way and strategy using which hotel industry can minimise the impact of TurnKey on its operations and profitability. Consumer Loyalty refers to the extent to which consumers are dedicated for a organisations' products and services. This refers to tendency of consumers which make them chose only one brand from the various choices available (Vaičiukynaitė and Gatautis, 2018). This is a very effective way which can reduce and minimise impact of TurnKey over Hotel industry. This is possible in manner that when consumers are loyal for a hotel organisation even when they have option of TurnKey they will use services of hotel only. This loyalty of customer is a result of customer satisfaction and customers who have positive and happy experience at hotel. Significant factor of customer loyalty is that customers chose one hotel even when TurnKey can give better services. But there are some strategies which hotel industry can use to build and enhance customer loyalty.

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    Frequent Communication with Customer

    Hotel industry should maintain frequent communication with its customers. To give all the information to customers even when they do not ask for it. There are various ways in which hotel industry can do this. Social media, Email are some platforms through which hotels can regularly contact and communicate with its customers to maintain and enhance their loyalty for the hotel.

    Giving rewards to loyal customers

    Hotel should reward those who are loyal to the organisation to know about the loyalty of people who have been loyal for the organisation they can check past records and stay of people. In this hotel should consider brand loyalty instead of loyalty to a particular hotel. Rewards will enhance loyalty of the customers of the people.

    Know the Customer

    This is very important strategy to build and maintain customer loyalty (Bowen, 2017). Hotels when know their customer they are able to provide more personalized service to their customers and along with that they are able to make their customers feel special and this can build and increase loyalty of a customer for a brand and its hotels. This is because everyone likes it when they are treated differently and specially.

    These strategies will help hotel industry to reduce and minimise impact of TurnKey.

    Students Also Seek Help - Hospitality Assignment Help

    CONCLUSION

    On the basis of this report it can be concluded that there are various issues that a company and hotel faces which required to be dealt very effectively to avoid their impact on its profitability. One such issue is the company who are providing substitute products to customers. In this report TurnKey which provide services for vacation rentals which affect business of hotel industry. There are some specific features which make a good choice for the customers that they can avoid hospitality services and move towards services of TurnKey. This report have included some strategies using which hotel industry can minimise impact of TurnKey.

    You can also check more samples from the Hospitality Samples category

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