TUI Group Case Study
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The world leading operator can be faced by challenges that can lead to merging and acquisition as depicted in the case of TUI travel agencies. The changing labor conditions can be a challenging factor even to a giant business firms in the hospitality industry. The human resource challenges include the compression and shrinking of the labor force, the issues to do with union and other escalating healthcare benefits which are attached to the laborers benefits. The labor forces have been found to be shrinking due to changing demographics. This is in cases of the slowing population growth and the aging population that renders few people in the working group.

Unions as well have vested interest in the employee’s welfare and have increasingly posed challenges to the firms. In addition, the increasing health benefits demanded by the unions to be given to the laborers are also challenges faced by these hospitality firms. The firms find it more difficult to hire and retain employees due to this threat by the unions. This has since forced the hospitality companies to be very selective when it comes to selecting the hiring process for their laborers (Hayes, & Ninemeier, 2009).

Furthermore, the escalating operational costs such as the energy costs have posed many challenges to the sector. The global increases in the demand and the witnessed natural disasters have stretched the energy supplies. With the increase in the energy priced over a decade ago, there has been a need to mitigate the rising costs which has proved to be very challenging to the company.

The insurance costs have also been the most challenging obligations ever. The cost of claims in which the industries claims translates to the higher costs of premiums which as well will change the deductibles that imply that it will only cover limited persons. This means that; the ability to participate in the large pools that can, for instance, be the chain operations may soften the impact, but it is also challenging to enter into such union (Enz, 2010).

Most importantly, the brand standards have been the most continuing challenge to the hospitality companies. Many brands have been found to be dynamic, and the companies have as well tried to move on with the changing standards. This is in an attempt to retain their competitive edge in the market which has brought about the increase in the cost of operations of many hotels in the industry.

Research carried out showed that there as well have been a challenge brought in about by the decline in the customers travel which has been found to be difficult since a personal, corporate budgets with the travel expenditures can be reduced by these hotels but have been found to be difficult to handle. This implies that the hotel are well prepared to receive visitors with food present and when they fail to turn up, then loss is experienced in terms of operations (In Gursoy,. Et al. 2015).

In an attempt to remain competitive in the market and be more attractive to the clients, the companies have embarked on renovating and constructing the existing structures that imply the additional costs of operations. This involves the rebranding so as to upgrade the physical conditions of these hotels which additionally results in escalating capital investments exposure for the hotels. This has been challenging as well as most of the industries carry out this activity and none is willing to be left behind.

However, these challenges on the other hand have been found to be the mother of energy being experienced at the hotels recently. The emergence of innovations and more conservativeness have been brought into existence due to creativity. The participants at all the levels of the industry have become more efficient and moreover have found the alternative ways of delivering the similar services to the customers at the reduced cost to the company and the client as well. This, in turn, lead to attraction of more customers (Gursoy,. Et al. 2015).

To overcome these challenges, the companies in the hospitality industry such as the hotels, travel agents and any other relevant company in the sector will have to follow the policies stipulated. The most effective way of solving the emerging challenges is for the whole companies to team together and discusses the challenges that are affecting them as a whole. However since they are competing with each other, only general strategies should be labeled out with regards to the matters affecting the general public. Other strategies should be discussed internally by the firm’s management and come up with the most effective methods of handling the same.

For each and every single company facing these challenges to assist in future developments, they should embrace technology that will help in solving alit of challenges mentioned. By embracing technology, only a few labor can be hired which can be no threat to the declining population of the working group. This is because the technology can function much faster and accurately in helping with some tasks. Moreover, companies will not be competing since the clients will have already known the hotels they will be staying in by the user of the hotels website. In addition, the hotels should seek to adhere fully to the government regulations and union’s demands so as to operate smoothly.


Enz, C. A. (2010). Hospitality strategic management: Concepts and cases. Hoboken, N.J: John Wiley & Sons.

Gursoy, D., Uysal, M., Sirakaya-Turk, E., Ekinci, Y., & Baloglu, S. (2015). Handbook of scales in tourism and hospitality research.

Hayes, D. K., & Ninemeier, J. D. (2009). Human resources management in the hospitality industry. Hoboken, N.J: John Wiley & Sons.

In Gursoy, D., In Saayman, M., & In Sotiriadis, M. (2015). Collaboration in tourism businesses and destinations: A handbook.

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