Learning Objectives
Chapter 10: Product Development and
Partnership
1. Identify the four major groups of
organizations in the hospitality and travel
industry.
2. Describe the roles played by each of these
four groups of hospitality and travel
organizations.
3. Identify the trends among each of the four
groups of organizations.
4. Identify five overall trends and industry
realities.
5. Define the product/service mix.
Learning Objectives
Chapter 10: Product Development and
Partnership
6.
7.
8.
9.
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:
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Suppliers
Carriers
Travel trade intermediaries
Destination marketing
organizations
Categories of Suppliers
1. Suppliers
Provide services that travelers need at or
between destinations
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Cruise lines
Car rental
Lodging
Restaurants
Attractions
Casino operations
Categories of Carriers
2. Carriers
Provide transportation for travelers from
their origins to their destinations
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Airlines
Train
Bus
Ferry services
Categories of Travel Trade
Intermediaries
3. Travel trade intermediaries
Reserve and sell the services of suppliers,
carriers, and other intermediaries
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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
a.
b.
c.
d.
e.
f.
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
a.
b.
c.
d.
e.
f.
Major restaurant-industry trends
Restaurant franchising
Co-branding
New foodservice locations
Increasing brand segmentation
Changing ownership of major chains
Trends in Cruise Lines
a.
b.
c.
d.
e.
f.
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
a.
b.
c.
d.
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
a. Theme park business growth
Casino Operations
a. Growth in number of casino operations
b. Casinos take to the water
c. Casino resort diversification
Trends in Airlines
a.
b.
c.
d.
e.
f.
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
a.
b.
c.
d.
e.
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
1. Staff behavior,
appearance, and
uniforms
2. Building exteriors
3. Equipment
4. Furniture and fixtures
5. Signage
6. Communications with
customers and other
publics
Types of Product Development
Decisions
1. Organization-wide Decisions:
a. Width and depth of product/service mix
b. Improving or modernizing the
product/service mix
c. Branding
2. Individual Facility/Service Decisions:
a. Quality
b. Range
c. Design
Partnership
Cooperative promotions and other cooperative
marketing efforts by hospitality and travel
organizations
Potential Benefits of Partnerships
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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
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Customers
Organizations in the same business
Organizations in related businesses
Organizations in non-related businesses
Digital alliances