Hilton Hotels Marketing Strategy - Targeting the Web and Innovating Services - Case Study Example

Service Organisation A Study on Hilton Hotels Table of Contents Executive Summary Introduction History of the Organisation The Success of Hilton Hotels Marketing Strategies Targeting the World Wide Web Innovating Products and Services Customer Satisfaction and Customer Loyalty The Value of the Employees Conclusion Recommendations Executive Summary In this paper, the writer has presented information regarding the strategies implemented by the Hilton Hotels group, which has helped to make it one of the most successful players in the hotel industry and the hospitality sector as a whole. Here, the writer has outlined the strengths of the popular hotel chain, and how it has been able to continue serving their guests over the years, despite the numerous challenges faced. The writer also mentions how the company has been able to not only establish a loyal consumer following but a loyal employee following as well. At the end of the paper, further recommendations have been provided, which may further contribute to the hotel chain’s success and growth. Introduction Hotels have been considered to be one of the main players in the tourism and hospitality industry. The hotel sector has also been considered to have been able to provide millions of jobs for people all over the world. However, what with the many hotel companies all over the world today, there is a need for the implementation of proper management strategies to make sure that hotels are able to continuously serve their guests, as well as keep their employees. The writer has decided to focus on the management strategies of the Hilton Hotels group, which originated in the United States and has remained to be one of the top hotel and resorts chain in the world. History of the Organisation It was in the year 1919, when a certain Conrad Hilton bought his first hotel which was called The Mobley, located in Cisco, Texas. Fast forward to six years later, and Hilton managed to build his first hotel in Dallas which he named ‘The Hilton.’ This was the beginning of a long history of chain of hotels across the country and the company managed to build hotels overseas as well. The Hilton Group now comprises around 500 hotel chains all over the world, with 60,000 employees in around 50 countries. The entire group id divided into four global regions. These are namely, Europe, the UK and Ireland, the Middle East and Africa, Asia Pacific and South America. In the USA, it is the Hilton Hotel Corporation (or HCC) that is in charge of the country’s operations (Maxwell & Lyle, 2002). The Success of Hilton Hotels Guests pay the hotel to be pampered and the hotel must ensure that the guests get their money’s worth, and more. If the guest is able to have a good experience and is satisfied with the hotel’s service, then the hotel can be assured that the guest would return to stay again at their hotel (Stoller, 2006). Hilton’s service has been declining for the past couple of years, and can therefore take a page from Microtel and Omni group of hotels’ service strategies. The Omni chain, for instance, ensures that all the senses of the guest- his/her sight, touch, sound and smell are pleased and satisfied. In other words, there is no room for the hotel to commit an error. (Brand Report, 2007). In a study conducted by Huckestein & Duboff (1999), the Hilton Group was able to rise above the recession during the early 1990’s by creating further value in their hotel operations. In the hotel industry, as with most industries, the poor state of the global economy could easily spell the lack of guests checking in and the number of employees getting laid off from their work. Naturally, this also means that the profit level of the hotel chain decreased. Strict competition between other hotel brands that created narrow market segments meant that hotels had to always be at their feet to compete for consumer choice and differentiating their products and service among potential guests and loyal guests proved to be quite a challenge. One of the main reasons why this was a challenge was because the tastes and the expectations of the average consumer continued to change over the years, as well as their perception of value and quality. In order to combat such problems, the top management teams of the Hilton Group decided to first adopt an aggressive growth strategy to make sure that the consumers realize the full value of the company as a brand. This would essentially make sure that the consumers were able to find a Hilton property in appropriate market locations. Secondly, the hotel chain decided to implement a systematic business approach to make sure that consistency was achieved from one property to the next property. In order to fulfil the first objective, the company decided to first expand their franchise, then spending over $ 1 billion of full-service-hotel acquisitions. In addition, the company decided to form a strategic alliance with the Hilton Group PLC, the owner of the Hilton brand name outside the United States. After successfully expanding, the company then decided to concentrate on establishing a strong platform with which to conduct their hotel operations. The company then decided to focus on their second objective, which was to implement strategies that would align the company’s processes, human resources and technology together. Hilton decided to first assess their current position in the marketplace. This was done by using a ‘comprehensive conjoint analysis,’ and the research study conducted determined how the company fares as compared to its other competitors. In addition, the analysis pointed out the key areas with which its hotels were unable to meet consumer expectations. From the study, it was found out that there are ten key attributes which are important when a hotel aims to come up to the expectations of their consumer. These are namely 1) the cleanliness of the bathroom, 2) the feeling of safety, 3) the overall cleanliness of the room, 4) a good shower, 5) the availability of the type of room that a guest wants to reserve, 6) a quiet room, 7) the odor of the room (based on the initial entry of the guest), 8) the responsiveness of the hotel’s staff to the requests of the guests, 9) the helpfulness and courtesy of the hotel staff and 10) being able to handle errors with regards to billing. Based on the research study conducted by the company, it was found out if these criteria were not met, and guests were not satisfied, then all other hotel services that a hotel attempts to provide their guest would make no difference. The research study also pointed out that no matter how the hotel decides improve the performance and the quality of the guest experience, this was not consistent with all Hilton properties. Marketing Strategies Targeting the World Wide Web According to Bahamas Business (2004), Hilton Hotels has succeeded in winning the ‘Marketing Strategy of the Year Award,’ in the year 2004. This was due to the company’s ability to emerge as an innovative organisation, with the ability to stay committed to their consumers and being able to remain on top of the hospitality industry amidst competition from other hotels. One of the best examples is how Hilton Hotels has successfully conquered the Internet, one of the best mediums for information in the world today. In the year 1995 Hilton Hotels Corporation were able to considerably improve their organisation’s development by establishing themselves over the internet with the launch of www.hilton.com. (Hilton Hotels Corp, 2008). For Hilton, this turned out to be a good move, since it meant that they could reach out to their clients on a wider level to find out more about their needs and wants regarding customer service. When it comes to the hospitality industry, a little extra always goes a long way. An extra chocolate and rose petals scattered on a bed when a guest enters his room can mean the difference between an economy hotel and a deluxe hotel. The success ingredient of such deluxe hotels lies on the management focusing on the ‘wants’ of a guest and not just the needs. This is what would make the guest come back for more. Hilton Hotels also relaunched HiltonJourneys.com and HiltontoHome.com, which can be translated into other languages, particularly French and Spanish. The company sought to take their marketing efforts to another level altogether when they decided to advertise the brand during the Grammy Awards in the year 2007. The main focus of the campaign was to utilize music in order to connect with their consumers by appealing to their emotions. For instance, in the advertisements that were part of the campaign, six artists were featured in the ads and consumers or visitors of the site can follow these artists in their own personal journeys, complete with ‘Behind the Scenes’ interviews and other articles about them. These were all featured in the HiltonJourneys.com website. On the other hand, HiltontoHome.com focused on the collaboration of the Hilton brand with other products such as Crabtree and Evelyn, Cuisinart Two to Go Coffeemakers and the like, all of which can be enjoyed by the guests in the Hilton hotel rooms (Hotelmarketing.com, 2007). Innovating Products and Services In 2007, Hilton decided to renovate their Hilton Orange County/ Costa Mesa branch. Aside from changing the interior design of the hotel, Hilton also invested in ensuring that the guests were treated like royalty with London style cabs being used by the hotel for their guests who wish to travel around Orange County in style. A Starbucks has also been built inside the hotel for people wanting to get their coffee fix, in addition to the upgraded fitness center and the new wine bar (where guests can taste different varieties of wine). Businessmen would also be glad to find out that the lounge inside the hotel has also been improved, complete with a convenient workstation and wireless internet for business purposes and convenience. Such recent innovations and renovations have made the Hilton quite popular (Chao, 2007). Business travellers are different from other travellers in the sense that for business travellers, luxury is extremely important. According to the Guest Satisfaction Survey posted on HotelChatter.com, business travellers prefer utmost privacy, while being surrounded by luxury and expensive bed sheets and bath products. They also prefer hotels that are closely located to the airport. Customer Satisfaction and Customer Loyalty Customer satisfaction can be found out through the Market Metrix Hospitality Index (MMHI) which provides reports from different clients and/or consumers with regards to hotels, airlines and even car-rental companies. In-depth interviews are usually carried out among 35,000 individuals where they are given the freedom to talk about their experiences with a certain company, and where they can share what they like and do not like. For 13 quarters, Homewood Suites, a Hilton-owned upscale brand of residential-style hotels, has received recognitions for being one of the leaders in the hotel industry. They are known for their stellar customer service and prove to be quite a competition against other rival hotels. The survey system done by Market Metrix has received awards for providing hotels with tools on how they can further improve their management. It must be noted here that hotel management does not only refer to guest satisfaction, but also to the satisfaction of the employees employed at the hotel (Carmony, 2008). According to Gillin, (2008), Hilton companies take advantage of the online community to find out more about their performance as a company in the guests’ eyes. Online forums on websites help a great deal in ensuring quality performance for all guests. Through such online communities, the hotel can find out their weak points and their strong points in running the establishment. This way also, the hotel can find out what appropriate marketing strategies they should make to ensure that guest turnout improves and does not decline, despite the economic crisis happening across the globe today. Conversations between guests are encouraged and monitored by an efficient staff, who provide reports regarding their findings. These conversations are also started by the guest himself/herself in order for the staff to see comments, complaints and suggestions about service that they may have overlooked. However, some questions from the hotel staff are also asked on these discussion boards, and responses for these questions are also monitored. The advantage of such research done through online communities is that it saves time and effort on the part of the staff of the establishment. In addition to this, the guests who join the online communities join as a result of how much they value or do not value their experience in a Hilton hotel. They always have the option to decline, but a percentage of them are willing to provide necessary feedback for the hotel’s performance development. Thus, membership alone says a great deal about the hotel’s services as a whole. The disadvantage on the other hand could be the fact that not all the responses posted on such online boards project a good image for the establishment. There are a lot of negative comments and feedback, and as much as this should help the hotel provide better service and guest satisfaction, it could also affect the perception of other potential guests to that particular hotel being written about. Since a large population of people log on the internet everyday and come across such comments, they may take it as a sign to not step foot in that hotel ever. Therefore, through online communities, foot traffic into the hotel may be affected. What with Hilton’s competition with other hotels that offer similar products and services, strategic management of customer satisfaction is crucial towards staying on top. Such a competitive environment means that there is a need for attention to be focused towards guest satisfaction. Research studies in the past have shown that once a guest is satisfied with the products and services of a hotel, repeat purchases are highly likely (Oh, 1999). In addition, guest satisfaction also leads to positive word of mouth behaviour and ultimately guest loyalty. Previously, the writer discussed the top ten factors that a hotel must really consider when it comes to meeting the expectations of their guests. In a study conducted by Mattila and O’Neil (2003), it was revealed that hotel brands that are able to garner high levels of guest satisfaction are able to meet their guests expectations with regards to hotel room cleanliness as well as the maintenance of the room, the friendliness of the employees, and whether the employees are knowledgeable or not. In addition, the hotel’s physical environment is something to really consider as well. The Value of the Employees Maxwell & Lyle (2002) feel that strategic human resource management (HRM) is extremely important towards successfully achieving the goals of the company at the present and in the future. The integration of the Hilton Group PLC and the Stakis PLC meant that extensive market research had to be conducted in order to determine the expectations of the consumers with regards to the Hilton brand. This aim lead to the development and the launch of Equilibrium, Hilton’s ‘quality initiative.’ In turn, Equilibrium seeks to make sure that all the needs of the guests are met and since the quality of service is what is necessary for this to happen, a human resource policy initiative named ‘Esprit’ has been established to make sure the employees are rewarded for their efforts, recognized and respected. Fortunately, people are very pleased with the fact that Hilton hotels are able to identify the concept and the practice of relating customer services to the delivery of its staff members. In addition, people are also quite pleased with the fact that the company acknowledges the importance of both training and development. Based on the study conducted by Maxwell & Lyle (2002), the collaboration between Equilibrium and Esprit has resulted in an increase in the guest satisfaction levels, according to the Guest Satisfaction Tracking Survey. Weber (2000) has written how important the quality of a hotel’s service is in making sure that guests continue to patronize the products and services of the hotel. Communication, organisation, the execution of product delivery, developing relationships, employee initiative and crisis management are all ways in which the interaction between the staff member and the guest can be enhanced. Personal services, as seen in the responsiveness of the hotel employees to the requests of their guests as well as their accessibility has been identified as one of the most important factors in making sure that the satisfaction of the consumer is met. The International Journal of Health Care Quality Assurance (1994) makes it clear that hotels are able to benefit from their attempts to genuinely identify, interpret and respond to the feelings of their customers, in addition to taking care of their needs. It has also been advised that being able to look after the expectations of their guests should be customized according to the purpose of the guest’s visit and the origin of the guest. For Hilton hotels, this was quite a challenge since they cater their products and services to consumers who are of 130 different nationalities, all of whom hail from 150 different locations in more than 50 countries around the globe. The main components of the guest room, the restaurant and the bar mean that there are more than 200 ancillary services that go from laundry and dry cleaning, health care, entertainment, business services, telecommunications and many more. In order to provide optimum service positioning, the company decided to undertake customer and employee surveys in order to identify market needs and expectations. The views of the employees with regards to their job-related issues were also determined, and more importantly, they were also asked to provide their views on what they felt their customers wanted them to provide. This task was very useful in helping shape a programme for the company when it came to providing contemporary services. The input of the ideas of the staff members led to the establishment and the organisation of special enquiry groups that were charged with the development of detailed service standards and the definition of a limited number of service promises based on the key aspects of the concerns of the guests. In addition, these ideas also gave way to the Hilton Promise that every individual employed in their company would provide superior and distinctive service which the guests would always remember before they made the decision to return. Thus, the main focus of the Hilton Promise was that the service provided would reach out to their resorts and hotels all over the world. Based on the research studies conducted by the company itself, it was found out that there is indeed a need for a product development approach which would allow their guests to match their needs easily according to a specially adapted style or area of hotel service. This led to attempts to define the concept of a service brand which may support the kinds of innovation that are crucial towards the growth of the company. This approach was to consider that there exist different service clusters which, when combined, provide benefits for the consumers. As a result, one of the company’s service clusters focused on how they can cater more to their Japanese customers, since the Japanese made up a large percentage of their clientele. As was mentioned, the company set out to develop their services by first conducting their own research. These were specifically the Customer Usage and Attitude Survey, and the Employee Attitude Study. The first study was targeted towards finding out what their consumers thought about Hilton’s products and services as compared to other competitive hotels, and what they wanted from an ideal hotel. The latter study was focused on what employees thought about the content of their job, their work conditions, their superiors and of course, what they felt that their customers wanted from them. The results of the survey showed that consumers favoured Hilton hotels as one of the top international hotel chains when it came to their prestige, business orientation and efficiency. This basically summarized what the brand was all about. However, despite such good news, the company was also perceived as only being ‘somewhat friendly’ exhibiting a bit of traditionalism and with some complacency. According to the survey results, the staff members had admitted that they were highly motivated by their company and that they were loyal to it. However, they were still not able to grasp what the direction of the company us. They also felt that they did not know what the changes existed when it came to the needs of their customers, and they also did not know how to respond to such changes. They felt that in order to improve the development of the company, there was a need to 1) be more customer-oriented, 2) reassert the presence of the company as a brand through advertising, wherein its personality shall also come through to the consumer, and 3) the company should continue to provide additional training in order to help the employees meet the needs of the guests (Michael, 1992). According to Pearson (2003), Hilton hotels located both in the United Kingdom and Ireland are actually offering their employees the opportunity to earn qualifications that will not only benefit the company itself, but the entire hospitality industry. Such qualifications are also nationally recognized, providing more room for the employee to develop himself/herself in the professional field. Apparently, Hilton hotels are really committed towards the training and development of their staff members, in order to ensure that their guests are 100 percent satisfied with their employee service. Based on the company’s beliefs and values, by training their staff and helping them to develop, the hotel’s operations are also improved and customer service is ultimately enhanced. Along with NTP Complete Employer Solutions, which is a Sheffield-based organisation, Hilton hotels has decided to provide its employees with the chance to receive quality-on-the-job training while being supported by nationally recognized qualifications. The company programme is one that was first established in the year 2000, and it takes around nine to eighteen months in order to complete. It aims to train Hilton employees in various subjects ranging from reception, customer service and hospitality. Conclusion In this paper, the writer outlined the important facts that has helped made Hilton Hotels one of the largest and most successful hotel chains in this world. One of the main reasons for this is because the company continues to assess the needs and the wants of their consumers, which are constantly changing. In addition, they do not just focus on the satisfaction levels of their consumers, but they also make it a point to find out whether their employees are satisfied as well. As a result, the company has decided to invest in training and developing the skills and knowledge of their staff members, by enrolling them in programmes that further contribute to their self-development. This has been one of the main reasons why the company continues to have loyal staff members, which in turn has helped the company keep a loyal consumer following. In addition, the company has also succeeded in making sure that they are in line with the current trends, making it mandatory to constantly innovate their products and services, and even in their marketing strategies. One of the reasons why the company has succeeded in the hospitality industry is because they are able to constantly serve their numerous consumers all around the world. This was mainly done by expanding the company business, and investing in several properties around the world- which also was the company’s main strategy when the economic crisis affected the global market in the early 1990’s. As a result, there is a need for the company to constantly cater the needs and wants of their consumers based on where they come from and their purpose of staying in one of the Hilton’s properties. One of the strengths of this company is that they take the initiative to find out the current trends with regards to the high quality needs of their consumers and they actually look for ways in how they can come up to their consumers’ expectations. As a result, the company is able to ‘stay close’ to their consumer, by making their services and products more personalized. In the hotel industry, this is one of the main factors that has to be carefully considered since the ability of the hotel to establish a personal relationship with their guest is what helps them to stand out, and it is what spells the difference in making repeat purchases and ensuring the consumer’s loyalty. Of course, as was mentioned, this initiative is not only limited to the consumers, but to the employees as well and the company even takes measures to find out how they can compete against other hotels that offer similar products and services. The company makes sure that all their employees have a chance to provide their own feedback and output with regards to the company’s operations and management strategies. In other words, decisions are not hinged on the ideas and input of the management teams alone. This way, the hotel is able to make sure that their products and services are not the only ones that have a competitive edge, but their human resource pool as well. This way, productivity and creativity among employees is encouraged and staff members are trained to not only possess knowledge and skills in one field, but in several areas as well. The other strength of the company is that its leaders are very hands-on with regards to actually handling the company’s operations and implementing decisions. As with any company, strong leaders are necessary in order to make sure that the entire organisation is driven towards achieving their goals and objectives. The Hilton Hotels group is not an exception to this, with the company president Conrad Hilton going so far as to actually write a book entitled ‘Be Our Guest,’ meant for the company’s employees and other individuals who have an interest in the hospitality industry. If the leader himself is one who has a personal interest and a passion for the company, then this characteristic is enough to make sure that all employees follow on the same path. Recommendations In the previous paragraph, the writer made sure to point out the strengths of the Hilton Hotels group and how it has managed to overcome economic challenges and the changing needs and wants of their consumers. In this section, the writer shall provide recommendations on how the company can further improve the quality of services and products that they provide. The writer felt that it was indeed a good idea for the company to gather feedback and input from their employees in order to improve the quality of their service. Thus, the researcher feels that there may be a need to conduct focus group discussions between the hotel’s management teams and their employees on a regular basis. In other words, conducting surveys may not be enough. This can also be a training session for the management teams themselves since they are able to gain knowledge about their organisation from a different point of view. General meetings and other gatherings would be advised, in order to also establish closer relationships between the hotel’s employees. This is to develop and encourage collaboration between the hotel’s employees, so that a higher quality of service can be achieved. Since the feedback of the consumer is also highly appreciated, it would be a good idea for the company to hold promotions (such as providing free overnight stays) for consumers who provide helpful feedbacks. This would encourage the hotel management to keep up with the needs and wants of the consumers, thereby leading to greater profits for the company, repeat purchases and customer loyalty. The company can also further their marketing strategies by targeting the internet market further, by way of social networking websites, which are one of the current trends in the world today. Advertising and accepting feedback from websites such as Facebook or Myspace for instance, could prove to be very beneficial for the company in the long run, since people are free to post comments on the hotel’s services and products and how they can be further improved. Since the internet can now be easily accessed than ever before, such a marketing strategy can be quite effective in the long run. 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