Learning Objectives Chapter 10: Product Development and Partnership Identify the four major groups of organizations in the hospitality and travel industry. Describe the roles played by each of these four groups of hospitality and travel organizations. Identify the trends among each of the four groups of organizations. Identify five overall trends and industry realities. Define the product/service mix.

Learning Objectives Chapter 10: Product Development and Partnership Identify and describe the six components of an organization’s product/service mix. Explain the types of product development decisions that an organization must make. Define the term partnership and list the potential benefits of marketing partnerships to hospitality and travel organizations. Identify the types of partners available to hospitality and travel organizations.

Major Groups of Organizations in the Hospitality and Travel Industry There are four major groupings: Suppliers Carriers Travel trade intermediaries Destination marketing organizations

Categories of Suppliers Provide services that travelers need at or between destinations Cruise lines Car rental Lodging Restaurants Attractions Casino operations

Categories of Carriers Provide transportation for travelers from their origins to their destinations Airlines Train Bus Ferry services

Categories of Travel Trade Intermediaries Reserve and sell the services of suppliers, carriers, and other intermediaries Retail travel agents Tour wholesalers and operators Corporate travel managers and agencies Incentive travel planners Convention/meeting planners

Categories of Destination Marketing Organizations 4. Destination Marketing Organizations (DMOs) Government and non-government organizations that market all the hospitality and travel services within their destination areas National/Federal and State Tourism Marketing Agencies Convention and Visitors Bureaus (CVBs)

Trends in Lodging Facilities Chain domination Increasing brand segmentation Mergers and joint-marketing programs All-suite/extended-stay hotels Frequent guest programs Special services and amenities

Trends in Restaurant and Food Service Facilities Major restaurant-industry trends Restaurant franchising Co-branding New foodservice locations Increasing brand segmentation Changing ownership of major chains

Trends in Cruise Lines Rapid growth in cruising Creativity and expansion of target markets Dependence on travel agents Changing cruiser demographics Entry of hotel/resort companies into the cruise business Consolidation

Trends in Car Rental Companies Sales concentrated among business leaders Dependence on airlines and travel agents Participation in frequent-traveler programs New services

Trends in Attractions and Casinos Theme Parks Theme park business growth Casino Operations Growth in number of casino operations Casinos take to the water Casino resort diversification

Trends in Airlines Mergers and industry concentration More regional and commuter airlines Frequent-flier programs Strategic alliances Ticketless travel and e-ticketing Changes in travel agency commission policies

Overall Trends and Industry Realities More horizontal integration More vertical integration Introduction of a wide variety of new services, facilities, and travel alternatives Great future opportunities for new services, facilities, and travel alternatives Increasingly competitive industry

The Product/Service Mix Staff behavior, appearance, and uniforms Building exteriors Equipment Furniture and fixtures Signage Communications with customers and other publics

Types of Product Development Decisions Organization-wide Decisions: Width and depth of product/service mix Improving or modernizing the product/service mix Branding Individual Facility/Service Decisions: Quality Range Design

Partnership Cooperative promotions and other cooperative marketing efforts by hospitality and travel organizations

Potential Benefits of Partnerships Access to new markets Expansion of product/service mixes Increased ability to serve customer needs Increased marketing budgets Sharing of facilities and facility costs Enhanced image or positioning Access to partners’ databases Access to partners’ expertise

Types of Partners Customers Organizations in the same business Organizations in related businesses Organizations in non-related businesses Digital alliances