Strategic Hospitality Management in Hilton Hotels - Case Study Example

STRАTЕGIС НОSРITАLITY МАNАGЕMЕNT 1 Name: Course Instructor’s name Institution Date STRАTЕGIС НОSРITАLITY МАNАGЕMЕNT Hilton Hotels and resorts is one of the most reputable global hospitality businesses. It originates in America and is owned by Blackstone Group, a multinational private equity also located in the U.S. However, its founder is Conrad Hilton who founded the first Hilton Hotel in Cusco, Texas. Hilton Hotels and resorts headquarters were located in Beverly Hills, California but from the year 2009 they shifted to Fairfax County, Virginia. Hilton Hotels and resorts Corporation was ranked the 38th biggest hotel and privately held company by Forbes. In December, 2013 the company announced its second IPO which was later conducted and it was valued to be worth $2.35 billion. As from the year 2014 this company reported to have an estimated 4,000 hotels under its global Hilton Brand this figure is further broken down to an estimated 680,117 rooms in 91 countries. This paper therefore seeks to review Hilton hotels corporate strategy, business strategy and future strategic potential in the hospitality industry. Corporate strategy One of Hilton hotels and resorts corporate strategy is its divested international operations that helps it share activities and transfer skills across its various branches globally. Since its creation Hilton Hotel is known for its aggressiveness in growth and expansion. Over the past decade Hilton Hotel has focused its efforts in increasing its presence globally, it is estimated that Hilton Hotel global hotel portfolio is nearly 2,000 hotels in exception of its franchise (Yeboah, 2015,p10(2).). On the other hand Hilton Hotel growth and expansion as part of the company’s corporate strategy has been instigated by its vibrant management culture that helps identify places globally that are instrumental in adding value to the Hilton portfolio. It is also estimated that Hilton hotel has nearly 100,000 franchises under its global brand (Xiao, O'Neill, & Mattila 2012 pp.122-139). The other cooperation strategy of Hilton Hotel that is attributed for its success is its organization culture. In this case Hilton Hotels is claimed to have a specific organization structure that ensures effective management of all its hotels despite their regional location, the employees are taught on the importance of the values, brands and guest of Hilton. To make this a success each Hilton Hotels region branch is headed by a senior Vice-president who head the functional divisions within Hilton Hotels with the same competences experienced throughout all the countries they operate in (Watson, Maxwell and Farquharson, 2006, pp.30-49). It emphasizes on a unified culture, a global talent strategy committed to innovations and continuous training and development more so on the management of its resorts and casinos. On the other hand Hilton Hotel culture is also characterized by dedicates and unique service delivery associated with its luxury and posh properties. In this case, Hilton Hotel is also focuses on light and warmth hospitality where it has built is core values on delivering exceptional guest experiences. Additionally, Hilton Hotels corporate strategy emphasizes on five core values which entail; hospitality, integrity, leadership, teamwork and ownership. It seeks to understand its unique global culture by investing in effective employees training programs that help employees overcome culture shocks more in in third world countries and some parts of Asia. This helps in advocating for diversity ensuring that its management teams quickly adapt to other cultures in the course of international expansions. Through its motto “travel should take you places” Hilton has distinct brands within that help advance its unique corporate strategy. For instance, the double tree, embassy suites, Hampton Inn, Hilton garden Inn and Conrad hotel are essential in providing luxurious services to customers and advance the growth and vision of Hilton hotels and resorts (Noone and Mattila, 2009, pp.272-279) Moreover, Hilton Hotels’ corporate strategy entails buying, renovating and repositioning full-service hotels through acquisition. In this case Hilton Hotel basically adds value to these hotels then adds them to its growth brand portfolio. Hilton hotels is also committed in increasing its presence in local communities through partnerships, take part in community programs and volunteerism an issue which is attributed to increase its brand awareness in countries where it has expanded into as part of its vision and mission (McNeill and McNamara, 2009, pp.369-386). Business strategy Hilton Hotels’ most significant business strategy is service differentiation. In fact this is claimed to be the cornerstone of its global hospitality business strategy. Hilton Hotels ensures that it differentiates its services on the basis of services quality and maintaining the highest standards as well as integration of Information Technology into various aspects of its service provision(Maxwell and Watson, 2006, pp.1152-1170). It has adopted digital hospitality as one of its main competitive advantage. This has enabled the company to adopt digitalization efforts which are related to mobile service, guest experience and privacy, loyalty, data driven-personalization and booking channels (Lacap 2014, p.115). Through the adoption of Information technology Hilton Hotels has been able to benefit from synergetic impact drawn from digitalization which has formed an essential part of its business strategy. Extensive business expansion strategies are also employed by Hilton hotels and resorts; this has enabled it to add an estimated 100,000 rooms in its portfolio in the year 2015 alone. This also includes an estimated 14,500 room acquired from its competitors and other independent hotels globally. Therefore, Hilton Hotel business strategy is the business being involved in an aggressive push for international expansion and broadening its operation daily (Huckestein and Duboff, 2009, pp.28-38). The success of this business strategy is attributed to the enormous opportunities in the hotels’ and the global sharing economy’s industry. Moreover, it is estimated that for every 1000 people in the U.S there are a total of 15.7 hotels whereas in the Chinese market there are 14 hotels for every 1000 people. This shows the potential of the luxurious hotel industry globally (Gröschl, 2011, pp.224-240). In line with expansion Hilton Hotel business strategy also revolves around its luxury brand. Hilton Hotels and resorts comprise of has 90 luxury brand hotels spread out globally in line with its extensive brand expansion portfolio. For this luxury brand hotels Hilton Hotels ensures that they are supported with its customer service and in-class revenue delivery programs. The most crucial business strategy for Hilton Hotels is its marketing prowess and strategy where its goal is to reconnect with its customers on an emotional level (Phalippou n.d., p. 67). This concept has been adopted by all Hilton Hotels regional branches therefore ensuring that it is facilitating its customer’s life experiences. Through a vibrant market strategy they are able to access a mass market that entails both high-end and middle class customers who have a unique taste for luxury and class (Huckestein & Duboff 2009,p. 33). This particular marketing strategy is evident through Hilton Hotel famous marketing campaign slogan "Travel Takes you Places”. In is claimed that through this marketing campaign Hilton Hotel has been able to reconnect with its customers on a personal level making it an accommodation for a wide range of customers traveling anywhere globally. This has led to Hilton Hotels to focus more on its marketing and advertising strategies. Since then Hilton Hotel advertisement have been top notch for instance it’s most famous ones include; "be hospitable” and "Tomorrow's a big day"(Eva M Smith, 2015). These particular media advertisement were with no doubt one of the most moving advertisement and due to these adverts Hilton Hotels and resorts brand grew significantly especially in its overseas market (Brown et al. 2008 pp.37-57). Future strategic potential One of Hilton Hotel future strategic potential lies with its wide range of business segmentation. However, Hilton is yet to embrace all the potential brought by its business segmentation. Thus, Hilton has the advantage of acquiring or forming mergers with any hotel in the commercial spaces brought about by the hospitality business industry globally (Crossan, 2014 pp.511-512 p,04(01)). Hilton is presented with a wide range of business segments and consumer types which entail; luxury hotels, full service hotels, curio hotels, select service hotels, extended service suites hotels and timeshare hotels to tap into and expand its operations (Chen, Wang and Chu, 2011, p,4(2).). In this case Hilton Hotel has the rare opportunity to convert its wide range of commercial space into any type of these business segments. This will help Hilton Hotels ensure that it has an escape route in case of market saturation in the future. The other future strategic potential for Hilton Hotel lies with franchising. Hilton Hotels has the opportunity to turn from its tradition style of business to the modern franchising business model more so in venturing into unchartered territories which over businesses uncertainties (Bohdanowicz & Martinac 2007, p. 87). In this case the company has the potential of using fewer efforts in managing its subsidiaries but in the long end earn a substantial amount in profits. On the other hand through this business model Hilton Hotel has the opportunity to avoid incurring of the property value concerns, capital investment into building development and maintenance(Carbone, 2008, pp.416-417). Hence, this business model also ensures that the Hilton Hotel has the potential of overcoming the economic downturns therefore this global hotel business has more time and finances to focus on brand development growing its customer range and ensuring that all its subsidiaries comply with the hotel standards. The other future strategic potential is digitalization and fully embracing information technology. In this case Hilton Hotel will embrace technology evolution in an effort to improve its service provision as well as the state of the hotels (Yeboah, 2015,p10(2).). On the other hand through embracing Information Technology Hilton Hotels also have the potential of improving their marketing strategies therefore guaranteeing them a significantly higher potential to appeal to more customers as well as increase their customer base. Conclusion It is evident that Hilton Hotels is one of the biggest global hotel brands. However to be in this position Hilton Hotels and resorts has adopted a number of corporate and business strategies in order to guarantee the success that this global brand is currently enjoying. Moreover, its current success is also attributed to the ability of its global hotel brand to focus on specific aspects and attributes which have improved its service provision hence lead to increased revenues and growth. However, there are also a number of future strategic potential that Hilton Hotels can enjoy if it decides to utilize them thus if focused on strategically can result to success for this global hotel brand. References Bohdanowicz, P. and Martinac, I. (2007). Determinants and benchmarking of resource consumption in hotels—Case study of Hilton International and Scandic in Europe. Energy and Buildings, 39(1), pp.82-95. Carbone, C. (2008). Building the Cold War: Hilton International Hotels and Modern Architecture Annabel Jane Wharton. Journal of the Society of Architectural Chen, Y., Wang, W. and Chu, Y. (2011). A Case Study on the Business Performance Management of Hilton Hotels Corporation. International Business Research, p,4(2). Crossan, M. (2014). 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