Supply elasticity theory applied to tourism and hospitality

Supply elasticity theory applied to tourism and cordial receptionIntroductionThe hospitality industry is major service field in the world economy. The industry encompasses an extensive variety of service industries that include diet service, tourism and hotels.The hospitality industry is a 3.5 trillion Pound service sector within the globular economy. capital of the join Kingdom has been named the 2012 for International Games.There are a multitude of benefits for London hosting the Olympics, biggest of them is Hotel revenue in ground of Revenue, which means Demand for Hotels are already forecasted. The demand for the hotels in any grocery is determined basically by the nub of travellers inf poor in that place.This study may examine the relationship between the Supply and the factors affecting the hospitality sector using some of the theories adapted from Mr. wear thin Burton notes. address http//www.referencefor line of merchandise.comSUPPLY CONNOTEThe term Supply states the total amount of the product that producers are leading and able to provide at a special harm oer a given period of beat. Here go outingness is the keyword and this is determined using discordant analytical factors in ones mind.The hotel vocation faces the complexity in the burster of managing the chronological demand for its products put on show for the rest of the world. Also the put up of rooms has outpaced the demand over the last decade. Especially in the United Kingdom, since it is the worlds freshman industrialised country and stands sixth in the world economy with the power of purchasing parity has to follow some theories in order to have healthy in their competitive environmentAnd as per the fact in 2012 the hotels in UK needs to offer 1 million rooms, the demand in the close future is richly. The hotels have twain basic means of achieving sustainable competitive favour within their product market by focussing on low outlay and to meet the demand the Customer s.Reference http//ezinearticles.com/?cat=BusinessInternational-BusinessSUPPOSITION OF SUPPLYThe regulations of supply declares that, The Law of Supply claims that when other things are equal, the standard supplied of a good rises when the price of the good risesIMPINGE ON SUPPLYSupply agenda shows the Law of Supply states that as the price of a good rises, the step supplied of the good rises, and as the price of a good falls, the quantity supplied of the good falls, ceteris paribus. Simply put, the price of hotel supplies incr remedys the supply to the hotel also increases, when price of Hotel Supplies falls then the supply to the Hotel is also reduced. This is done because the Supplier has invested his opportunity cost in other sources.The Graph illustrates when demand for Hotel room is high the quantity supplied of Hotel Supplies are also high when compared to 2010.Source http//www.hotelnewsnow.com/Articles.aspxFACTORS AFFECTING SUPPLYThere are various factors that may affect th e Supply of the hotels every undeviating or deviating. These are some far-famed direct factors such prices of relevant resources, technology, prices of other goods, number of sellers, expectations of future price, taxes and subsidies, and government restrictions.. This is bulleted below in detail,Prices of relevant resourcesTechnologyPrices of other goodsNumber of sellersExpectations of future priceTaxes and subsidiesGovernment restrictionsSource Roger. A Arnold, Economics, quaternate Edition, Page No.72FACTORS WHICH CAUSES CHANGE IN SUPPLYPRICES OF RELEVANT RESOURCESResources are needed to produce goods. For example, Source is Steak when the price of Steak departed down, then the hotel will purchase and stock much of steak to sell more steaks in hotels which increases the supply of Steak. In that case Supply Curve will fail towards rightward.If on that point is no resource, that is less steak available thus creating less supply of rooms. Consequently, the preparation of stea k will decrease, and the supply bias will foment leftward.TECHNOLOGY more or less of the western countries have their usage of advanced technology to serve the hotel companies better. The development and in place highly integrated business helpes technologies and system are definite. The hotels states the accusatory in promoting the hotel interface technologies such as property management system, point of sales system, video on demand security and access control which improves Hotel supplies expeditiously and effectively. Therefore, the supply ignore will break of serve to the right.PRICES OF OTHER GOODSWhen smorgasbord in the price of one good gouge lead to a smorgasbord in the supply of another good For example the Lobster price increases dues to worst climatical conditions making lobster unavailable in market then supply of lean Increases.LobsterFishPriceCase- 1 Case -2 QuantityNUMBER OF SELLERSIf more sellers begin producing a particular good, perhaps because of high profits, the supply curve will shift rightward. If some sellers stop producing a particular good, perhaps because of losses, the supply curve will shift leftward.EXPECTATIONS OF FUTURE PRICEIf the price of a good is evaluate to be higher in the future, then producers may hold back some of the Hotel essential supplies today. Then they will have more to sell at the higher future price..TAXES AND SUBSIDIESSome taxes increase per-unit costs. look tax on Liqour is increased and producer is suppose to pay 2 pounds per Bottle. This tax leads to a leftward shift in the supply curve, indicating that the manufacturer wants to produce and offer to sell few of Liqour at all(prenominal) price. If the tax is eliminated, the supply curve shifts rightward.Subsidies have the opposite effect. Suppose the government subsidizes the production of Rice by paying wheat farmers 3 pounds for every bushel of wheat they produce. Because of the subsidy, the quantity supplied of rice is greater at each price , and the supply curve of Rice shifts rightward. Removal of the subsidy shifts the supply curve of corn leftward.Government RestrictionsThe government restrictions affects import of hotel supplies for international market, For example stricter Import duties implies ill affect on hotel essentials thus giving less Output, the supply to the guest will be restricted with available foods. In this case the Supply curve moves towards left.Reference Roger A Arnold, Economics, 2008 edition, P.No-71PART BPrice elasticity of supplyWhen price changes, there will be not only a change in the quantity demanded, but also a change in the quantity supplied. Frequently we will want to know just how responsive quantity supplied is to a change in price. The measure we use is the price elasticity of supply.( PeS )In simple terms the responsiveness of quantity supplied to a change in price. is called Price Elasticity of Supply. When it relates to hotel industry the responsiveness of Hotel supplier to a change in price of the product. The supply to hotel supplies in market will depends on change in price of hotel supplies in market or price offered by the Competitors.suppliesHotelQuantity DemandedThe figure shows two supply curves. Curve S 2 is more elastic between any two prices than curve S 1. Thus, when price of Hotel Supplies rises from P 1 to P 2 there is a large increase in quantity supplied of Hotel Supplies with S 2 (namely, Q 1 to Q 3 ) than there is with S 1 (namely, Q 1 to Q 2 ). For any shift in the demand curve there will be a larger change in quantity supplied of Hotel Supplies and a smaller change in price of Hotel Supplies with curve S 2 than with curve S 1. Thus the effect on price and quantity of a shift in the demand curve will depend on the price elasticity of supply.Reference Roger. A Arnold, Economics, 2008 Edition, Page No.57Source http//economics.about.comINTERPRETATION OF SUPPLY CURVESource A. M. Shella , Economies of Hotel management , 2002 edition, P- No.91 central CONCEPTS IN DETERMINING THE PES WITH HOTEL SUPPLIES AREFACTORS AFFECTING PESSpare production capacityWhen there is plenty of spare capacitythen the business will increase its output and therefore the Hotel Supplies supply will Elastic in response to Demand.Stocks of finished products and componentsIf the stocks are products are high in the market supply will be elastic. Conversely when Hotel Supplies stocks are low, supply will be inelastic in response to a change in demand.The ease and cost of factor substitutionIf both capital and ram resources areoccupationally mobilethen the elasticity of supply for a Hotel Supplies is higher than if capital and labour digestnot easily and quickly be switched4) Time period involved in the production processSupply is more price elastic the longer the while periodthat a firm is deed overed to adjust its production levels. Themomentary supplyis fixed and is determined mainly by planting decisions made months before, and also cli matic conditions, which affect the overall production yield.Source http//www.amosweb.comFACTORS DETERMINING PESTwo factors that affect the numerical value of the price elasticity of supply areThe hail that costs rises as output Rises and time period of analysis.1) The Amount that costs rises as output RisesWhen the Additional cost for producing additional output, this encourages more firms to produce for a given price which is raised, then more elastic will be supply. The lees the conditions apply, the less Elastic will supply be.2) Analysis of Time Periodwhen time period is longer then the time for analysis is more, responsiveness to the price change. Longer times enables the supplier to find alternatives. Time period are of two Long Runand Short Run. For example, the supply of the Ethnic Restaurants is not very elastic for a period, because Raw material used in production micklenot easily switch to other goods. However, given enough time, a year or more, resources can move betwe en productions, resulting in a more elastic supply.Reference John Sloman Alison Wride, Economics, 7th Edition, Page 58.ConclusionSubsequent to the above text consisting of the Supply theories and its implication we could identify the factors that may directly cause the Supply either Surplus or Shortage. Having said that, the necessities of the supply are proposed transparently combining various abilities and the willingness of the producer and their assumption. Also the producer Supplying behaviour is related to the nations stinting status and external factors (Climate, Transport, Trend) in the United Kingdom on the whole.TASK 2 WORD COUNT 1500ANALYSE THE REASONS THAT FIRMS SEEK TO EXPAND THEIR BUSINESSES VIA INTERNATIONALISATION.HOW FIRMS THAT YOU gravel RESEARCHED HAVE PURSUED THE GLOBALISATION OBJECTIVE?IntroductionSurfacing the fact that the humankind business endeavours eyeing on high levels of branding and marking their presence all over the world by adapting the input ca lled the Internationalisation. Most of the third world nations are now in the realism of making the most out of it, in terms of manpower and technological progression. With the presence of WTO the world trade organisation and its phenomenal allow it has even made easier to connect nations crosswise the globe with traditional business evolution in the way it is suppose to be. Having said that, the key notion is globalisation and its revolution in the modern-day business environment.This perceived text from the enquiry will clarify the concept of internationalisation and the purpose it serves to aid the organisation picked as an example. And will also justify the adaptation on globalisation to engage the objectives with complete satisfaction.InternationalisationThe expression is closely attached with the term economic globalisation. This concept can be rephrased as the integration of national economy in to the international economy. Which is done by trade foreign investment, capi tal flows, spread of technology and the presence of security. The late 20th century offers the rural sociology and revitalization in the crisis of development theorist. The rising concern in the sustainability reveals the limits of up gradation concept. It is vital that every nation and the business existing should imply the globalization in their environment. Of-course the unrevealing support of the nations involved in the globalisations speaks loud for its own steps forward in the long lasting business era.However internationalisation is commonly recognised and road driven by amalgamation of vital aspects such asEconomicTechnologicalSocio culturalpoliticalBiological factors.Source http//www.dadalos.org/globalisation/grundkurs_4.htmThis phrase can also be acknowledged for the fact that it is transnational circulation of ideas, languages or cultural variance. These aspects are belonging to the humanity across the world which has gone through the process can be said to globalised.Si gnificance of internationalisationGlobalisation has a various aspects which affects the world business in several different ways. The emergence of the concept was very vital and as discussed earlier the positive outcomes are way too longer. It is advised to adhere to the principles of global marketing instances. The swiftness of internationalisation will continue to have a growing impact on business organisations and their practices evenly.Internationalisation hastens the development of the third world countries.Internationalisation of communication has a phenomenal upshot.Internationalisation fetches equalization of income distribution.Internationalisation brings about increased opportunity in the poor countries.Pessimistic values on internationalisationAlthough the rising concerns in the firms attached with the paradigm internationalisation, which has left hardly any hurdles or negative effects relating the organisation with that of its man power resource etc.The developed nation s in this modern business environment adapt the policy of outsourcing which happens in manufacturing and white collar jobs.The exploitations of the globalisation have led the child workers usage in atrocious conditions in order to produce cheap good by ignoring safety concerns.Earlier in this business world, the workers had stable jobs but now the people populate in constant dread of losing their jobs to competitiveness in the environment..The world of terrorism has involved them in usage of internet for their global terror information postal. that the growing concerns of the firm have witnessed these negative aspects in establishing their brand.Submission of Internationalisation in relation to a hospitality firm.Globalisation is measured in various key aspects and the most immense thought has to be prearranged to the people industry which is called the hospitality trade. This concept is symbolized by the rapid movement of people, information and capital across national borders wo rldwide. Although this paradigm is a contemporary force with careful definition it is accepted.Global expansion with common product and branding position are in place to acquire the establishment in control.Sales and marketing of the firm programming in such a way they capture the global economy.Organisational structures that allow delivery of service with local operational control and the usage of world capital market as a primary source of funding.Quilon a avatar in the taskSucceeding to the illustration and the task given, in which the concept of internationalisation is completely implemented and has witnessed a global accolades for its idea. Quilon the hospitality firm cosmos an example for the task given demonstrates certain prolific dimension to the global restaurant chains.A group of TAJ HOTELS RESORTSConcerning QuilonAs a part of an iconic Indian hotel group called the the Taj hotels and resorts Established in 1903, Taj Hotels Resorts and Palaces is one of Asias largest a nd finest group of hotels, comprising 61 hotels in 42 locations across India with an additional 16 international hotels in the UK, Maldives, Mauritius, Malaysia, Australia, USA, Bhutan, Sri Lanka, Africa and the Middle East. From world-renowned landmarks to modern business hotels, idyllic beach resorts to authentic Rajput palaces, each Taj hotel offers an unrivalled fusion of warm Indian hospitality, world-class service and modern luxury.As they march on in the United Kingdom and established two hotels out of which the crown plaza has the significant Michelin starred restaurant named Quilon.Three other considerations in global expansion for Quilon Restaurant (A Taj Group)Source Managing the Multinational opening move, John M Stopford, P.no 697Strategic scope for QuilonGlobal perception is a matter of survival of the business. That is why a schema is formed to drive the organisation to attain its penultimate vision of a firm. In the following text lets notify the significant feat ures or strategy adopted by the hospitality firm which I have chosen in order to showcase the firms benefit in using the paradigm internationalisation as a business tool.Quilon has adopted Porters diamond theory of international competitive advantage identifies a diamond of four interrelated areas within a nation that process that country to be more competitive in international markets the four areas being factor conditions, competing firms within the country, support industries of the country and lieu demand.Source Porter, M E (1990) The Competitive Advantage of Nations, Macmillan, P.No 6911) FACTOR CONDITIONSThe success of Quilon was depended on the national governments willingness to invest in these areas over long periods of time. Porter emphasise that competitiveness was not just a matter of comparative advantage. Resources can also be home-grown and specialised. Thus, goes well beyond natural resources but can assist in delivering national competitiveness.The Quilon has m anaged to take competitive advantage on UK market with resources being efficiently used for its establishment has No.1 Ethnic Indian Restaurant.2) RELATED AND keep INDUSTRIESInternationally competitive suppliers and other related industries represent a critical resource for international success. Clusters of such industries, each offering expertise and world-class service, can be vital.For example, Quilon (THE TAJ GROUP) relies on its world success not just from Hospitality sector but on a range of other products like forage Products, Automobile, Steel and Telecom.3) FIRM STRATEGY, STRUCTURE AND RIVALRYFierce national competition will drive innovation, force down costs and develop new methods of competing that can then be used internationally by the same companies.Similarly, the Quilon success in Uk was its strength of the highly competitive home market. In Asia the parent community of Quilon has TATA GOUP has established major share of Indian Market. TAG group in UK Hospitality sector has first started with TETLY tea 51 BUKINGHAM PALACE HOTEL and BOMBAY BRAISSIERE which helped Quilon to survive contention between the competitors.Source http//uk.tata.com/4) DEMAND CONDITIONSHighly sophisticated and demanding Customers in a nations home market will drive up innovation and quality. Quilon Authentic food with taste and quality created demand among the customer which resulted in tailoring the Menu and delivering the innovate food within the Market. Which awarded Quilon with One Michelin Star for the Quality Delivered.In addition, there are two other factors that are important 1. The role of Government-Quilon stages of improvement can be influenced by the government regulatios and subsidies.2. The role of Chance Events The competitive advantage of Quilon can shift in unpredictable ways by various reasons like Recession, Oil price rise and So on.Source Managing the Multinational Enterprise by John M Stopford, P.No-707Quilon (The TAJ Group) Market PortfoliosThe Taj group examines its existing Hospitality portfolio and decides whether new products are necessary. Initially, the firm may provide additional products and services for the domestic market before expanding into international markets . Alternatively, the company may decide to internationalize on the basis of a single successful product.Source MANAGEMENT CONCEPTS PRACTICES, Tim Hannagan, 4th Edition, P.No- 43More frequently firms expand internationally by first developing a portfolio of products with the ultimate objective of entering numerous international markets. This was the start followed initially by Taj Group when it first decided to internationalize. The company built up a portfolio of Hotels and restaurant before venturing abroad. Less frequently firms expand promptly into many international markets first with a single product and only later do they develop a full portfolio of products.51 Buckingham Gate was the first international property from the luxury group Taj Ho tels Resorts and Palaces which was acquired in 1982, formerly known as St Jamess Court Hotel. After the success of 51 Buckingham Gate, they expanded their hospitality sector by Opening Quilon Restaurant and Bombay Brassiere by 1903.ConclusionConversely speaking it is incumbent on all hotel organizations that have aspirations to develop brand names across national boundaries to understand what globalization means. A truly global enterprise will have the ability to react quickly to market opportunities, no matter where they present themselves by applying business concepts that have been proven in the context of a global undertaking.In a world moving more and more towards globalization, hotel organizations will need to communicate more quickly, operate more productively, offer their employees greater opportunity and deliver their customers enhanced benefits. Those companies that address these issues today will be better prepared for the global market space of tomorrow.