In this report, we will be looking at Hilton Hotels Corporation, which is a global hospitality company with more than 5,500 properties and 163,000 employees (Fortune 500, 2018) over the world. This well-known hotel brand is known for their well-trained staff members, brilliant service and loved by millions of business people all over the world. One of the reasons why I chose this organization is because it has been more than one year since I started working in one of its brands, Hilton Garden Inn in Birmingham, and I am interested in the tourism and hospitality industries, as they are one of the world’s fastest growing and most dynamic fields of employment, with positive trends forecasted for the coming years. According to World Travel & Tourism Council, the hospitality industry is promising more growth and powerful economic influence in next and Travel and Tourism worldwide is expected to grow by 4% per annum from 2013 – 2023 (International Hotel School, 2018).
About the Company
Hilton Worldwide Holdings Inc., or Hilton Hotels Corporation, is an American multi-national hospitality company which owns, manages, leases and franchises hotels through subsidiaries (Hilton Hotels & Resorts, Hampton Inn). The company was founded by Conrad Hilton on 31st of May, in 1919, when he purchased his first, 40-room hotel, in Cisco, Texas. The first Mobley hotel was constantly booked so Hilton purchased two more hotels next year, one in Fort Worth and the other in Dallas. In 1925, Conrad Hilton built the first hotel bearing his name, the Dallas Hilton. Over the next 60 years, Hilton Hotels Corporation expanded rapidly in the United States and around the world. Currently, the corporation is led by Christopher J. Nassetta and is headquartered in Tysons Corner, Virginia. With more than 5,500 properties around the world, 894,000 rooms in 109 countries and territories, Forbes ranked Hilton as the 36th largest privately held company in the United States. Hilton Hotels & Resorts is also celebrating its 15th year anniversary in the Fortune 500 list. Today organization is holding the 324th place on the list (Fortune 500, 2018).
With a wide range of its brands, Hilton can offer rooms in different locations, with different price range and suite all of their customers’ needs. Room prices vary between $219-$1000 (£150-£700) a night. Costs vary based on the size of the rooms and the guest’s preference when it comes to things like a luxury or provided amenities and services.
Hilton has 15 brands across different market segments:
1. Conrad Hotels & Resorts
2. Canopy by Hilton
3. Curio Collection by Hilton
4. Hilton Hotels & Resorts
5. DoubleTree
6. Embassy Suites Hotels
7. Hilton Garden Inn
8. Hampton by Hilton
9. Home2 Suites by Hilton
10. Hilton Grand Vacations
11. Waldorf Astoria Hotels & Resorts
12. Tru by Hilton
13. Tapestry Collection by Hilton
14. Motto by Hilton
15. Homewood Suites by Hilton
Hilton Hotels Corporation’s Features & Benefits
Features Benefits
• Upscale hotels and resorts
• Wide price range
• Many locations worldwide
• Strong online and digital marketing presence
• Strong brand image and high ratings
• Customers can choose between luxury and moderately priced
• Customers can stay at Hilton Hotels all over the country and the world
• Easily accessible for customers to contact, book a room, or learn more
• Customers can trust Hilton Hotels
Marketing and promotion
Hilton Hotels is being advertised to generate more traffic from 35-49-year-old businessmen and women, particularly for their work travels and conferences. By targeting business people, they hope to show them that Hilton provides the best service and quality for the cost. The goal is to generate more revenue and check-ins from these people, by offering lower prices with their Hilton Honors loyalty programme.
Hilton Honors is ranked as 11th in the Best Hotel Rewards Programs (U.S. News, 2018). The Hilton Honors program is divided into four membership levels: Member, Silver, Gold, and Diamond. It is most advantageous for business and luxury travelers who stay in big cities in the United States, Europe, and Asia. Program members can redeem the points at more than 5,300 hotels and resorts across different Hilton brands. Points can be used to purchase tickets to concerts and sporting events, gift cards, cruise certificates and items sold on Amazon and Hilton Honors’ shopping portal. Customers can also earn points for their purchases with the Hilton Honors credit cards from American Express.
The organization is using a mix of traditional media advertising (television, print, outdoor). As well as, heavy social media usage promotion (Facebook, Twitter) and an iPhone and iPad application, which makes the actual booking process for rooms electronic, and extremely convenient for travelers. The goal is to show pictures of every hotel room so there is no surprise when you open the door upon arrival. The company also promotes their conference rooms for hiring and any other functions, such as weddings, baby showers etc.
The ads are designed to show customers that the company understands their needs, promises to meet them and even exceed them at an affordable cost. Each advertisement is urging consumers to consider Hilton hotels for their next business or vacation trip.
PESTLE Analysis
• Political Factors:
Brexit: fewer tourists are coming to visit the UK due to restrictions.
Terrorism: tourists avoid coming to a city where terror attack has happened in the past (BBC News, 2015).
• Economic Factors:
Tax: Government charges a huge amount of taxes depending on the hotel’s luxury and star category.
Slowing economic growth and the debt crisis in Europe reduce individuals’ buying power and their ability to travel.
High exchange rates discourage tourists and business people to travel abroad.
• Social Factors:
Increasing number of people who are willing to travel and paying more just for experiences.
Older populations are increasing the demand for luxury resorts and packaged tours.
Increasing number of multinational companies allows business people to travel around the world for conferences, meetings.
• Technological:
Increasing number of Facebook, Twitter and other social media pages help the hotel to promote all special offers and discounts. It also helps to attract more customers from all over the world.
Hotel booking websites (tripadvisor.com, booking.com, hotels.com) make room booking process way easier than it was before and customers can choose the best option by reading the reviews.
• Legal Factors:
Visa restriction policies: USA and EU countries play a big role in the hotel industry and visa restrictions can reduce the number of tourists coming to the hotel.
External factors, such as wars, leave a negative impact on the hotel as it reduces a huge number of tourists coming to visit the country.
• Environmental Factors:
Extreme weather conditions (floods, rainstorms, hurricanes) reduces the number of tourists, causes damage to the hotel.
Pollution: a huge amount of waste goes into the environment (plastic, glass, chemicals).
Porter’s Five Forces
THREAT OF NEW ENTRANTS BUYER POWER
• Video-conferencing
• Cheap alternatives (hostels, motels)
• Airbnb
• Rooms in bulk: tour operators, organizations, convention organizers
• Business travelers
• Leisure travelers and tourists
• Concerts and big events
THREAT OF SUBSTITUTION SUPPLIER POWER
• Marriot, Hyatt Regency, Radisson Blu hotels
• Airbnb
• Short-term let apartments
• Staying in the homes of friends and relatives
• Hostels, motels
• Runs Supplier Diversity Program
• Not subject to the bargaining power of suppliers
• Low indirect pressure on competitiveness
• Must maintain a cost advantage over its rivals
Conclusion
Hospitality industry continues to be by economic, social, industrial development and capital forces. Currently, hotel and hospitality industries are facing many challenges. Some of them are the shortage of labor and skills, global emerging markets, technology and media, unavailability of capital, evolving customer expectations among others. The most common ones are increased costs and high level and intensity of competition. In the second part of the report, I will be looking at two of them, as well as how Brexit is going to affect this industry. We will come up with strategies on how to reduce fixed costs, increase customer satisfaction, fight competitors and build loyalty among customers.
REFERENCES
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Appendixes
SWOT Analysis
Strengths Weaknesses
• Quality stay
• Upscale to mid-range accommodations
• Many locations worldwide
• Helpful, well-trained staff
• Wide price range
• Well known, strong brand image
• A wide range of services
• iPhone and iPad touch applications
• Too expensive to many, price-conscious consumers
• High operating costs as a result of being premium hotel service
Opportunities Threats
• International expansion of hotel and resort industry
• Take advantage of mid-priced business class market
• Mid-range to low-cost hotels
• Heavy competition from similar competitors (Westin Hotels and Sheraton Hotels)
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