Essay on Hilton Worldwide Hotels

Introduction

The Worldwide Hilton Hotel Inc. is an American hospitality and resort company that was founded by Conrad Hilton. The Hotels and resort company specializes in the management and provision of full-hotel service to clients all over the world. The company’s ability to capture the attention of many tourists globally has helped the company rise to glory in the industry. The paper aims to examine the company’s operations, capabilities, resources, and management strategies that have seen it ascribe to its current status (Bogetić, Antić & Lekić, 2015). Equally, it is crucial to analyze its internal strengths and external factors that impact the organization’s operations worldwide. The hotel industry is full of challenges and trends that need to be updated from time to time to ensure customers are satisfied. In an attempt to meet the objectives of the report, an in-depth analysis will be done on the company’s corporate strategy and establish how it has been able to gain a competitive advantage (Bogetić, Antić & Lekić, 2015).

Hilton Hotels and Resorts Inc. Business Overview

The Hilton brand is well known all over the world, and making an impact in the market for the organization is easy. Hilton Holdings Inc. is one of the largest hospitality companies that exist in the world. As of June 2014, the company’s portfolio consisted of over 690000 rooms meant for the market (Hantuli, 2016). In comparison with other companies and hospitality firms in the industry, its share is approximately 4.5% of the total coverage. As such, the company has a strong brand name in the provision of hospitality services. Equally, it is crucial to note that most of the company’s rooms are under construction, which represents a percentage of around 17.9% of the total market share. The company enjoys the largest share of rooms in the market globally, a matter that has boosted its operations. The high numbers of rooms that are under construction illustrate the industrious zeal in the company’s management to do better. In terms f market capitalization, the hotel company has done well to outdo its major competitors. By 2013, it had the highest market capitalization, which is an indication of profitable business operations. Their products and services are recognized for providing an enjoyable experience. Tourists all over the world are benefiting from attempts of the company becoming the leading hospitality organization in the world (Hantuli, 2016). The high level of professionalism and handling by company staff in most of its resorts is a natter that has created an excellent public image.

Industry Environment

The company operates in a quite competitive environment that is based on service provision. The hotel industry requires an organization to be at the forefront of identifying trends and issues that customers raise. Failure to take note of such facts can lead to poor business operations that can attract losses (Levy & Park, 2011). Technology is also playing a role in the industry as firms need to devise mechanisms that they can centrally manage their property. For instance, customers should b allowed to make bookings online remotely. Such practices can only be enhanced if the company employs the right digital strategy. The external environment of the company consists of players such as the governments of various places where the company is established, customers, law enforcement agencies, and investors. The company is also answerable to the community as it has to give back as a way of building mutual co-existence. Internally, the company has shareholders, employees, resources, and other factors that affect its operations. It is essential to gain a deeper understanding of how the environment affects Hilton Holdings Inc. activities (Hantuli, 2016).

Competitors

The company has competitors, many of whom are established and have a strong global hospitality network. For instance, Marriott Inc. is a major competitor whose market capitalization comes second after Hilton Holdings (Pryce, 2002). As such, the company faces fierce competition that puts it on toes to provide high-quality services. Hyatt is another critical competitor in the hotel industry in offering hospitality services. The Ritz-Carlton, Four Seasons, and Choice Hotels are significant players in the market who has consistently provided competition for Hilton Holdings. In terms of revenue, Hyatt contributes $4.5 billion less than what Hilton makes in a financial year. Marriot Inc. generates a 223% value of revenue as compared to Hilton, indicating that the level of strong competition that the hotel is facing.

Internal Organization

Resources, Capabilities and Competencies

The company can do better in the hospitality industry, given its capabilities. For instance, the company enjoys a strong financial background that can enable it to diversify and increase their market share. Starting up in a new place where there are no structures is problematic to a company that has inadequate resources (Anderson, 2011). To the advantage of the organization, it has enough resources that can facilitate any business deal or investment. The enormous profits that the firm has made for years can support its expansionary strategy globally. Customer reviews for the company indicate that its services are on point and of the highest quality. Customers give satisfactory remarks indicating that customer service is professional and up to standard. Financial ability with proper customer service for all within the organization have helped achieve the set objectives. It is through competence and capability that most firms provide the required products for the market. The company enjoys over 600000 property structures that they manage in over 85 countries globally. With all its resources, the company is bound to do better in the financial market in the near future.

Financial Performance

Hilton Holdings has enjoyed a period of financial success throughout their time in business. The improved performance is partially due to their ability to expand their business and diversify options for the market (Hantuli, 2016). In the year 2018, the company’s net income for the 3^rd quarter of the year was $225, which amounted to $779 in the full year. In the last quarter of the year 2018, the company acquired over 22000 rooms, which account for approximately 7% unit growth. Also, the company recalled some of its sold shares of approximately $23.5 million, bringing a capital return of over $1.9 billion (Anderson, 2011). The company’s capital return is projected to be between $1.3 and $1.8 billion. Hilton Holdings opened over 45 new hotels in the year 2018, indicating significant growth in the totals number of rooms for the company. The 2018 financial report for the company indicates that there is a projected growth of the company operations, following their recent developments in the industry.

The hotel industry is changing for the better part of it due to trends such as mergers and acquisitions. For instance, a hotel can decide to partner with other organizations and deliver the same service to customers (Kornberger, Pflueger & Mouritsen, 2017). Such initiatives are essential, especially when there are not enough resources to establish in a new place. Hotels in the industry that are utilizing such strategies are finding it easy to penetrate the global market. Acquisitions and mergers are becoming common practice for organizations in a bid to expand their operations. As such, Hilton Holdings Inc. can take advantage of its position to gain a competitive advantage within the hotel industry. Initiatives such as partnerships and mergers are the trending matters in the industry that Hilton should not overlook.

Hilton Holdings Inc. SWOT Analysis

SWOT analysis is a tool that is used to determine the situation of a business internally in a strategic manner. It encompasses a close examination of internal strengths, weaknesses, opportunities, and threats affecting company operations (Ahsan, Qazi & Syed, 2014). The strong brand global presence exhibited by the company is enough to market its products and services. Equally, its financial prowess can help it establish in a market where the company realizes an opportunity. A strong brand name and financial background can guarantee a company success in the market. As such, the company’s brand name and financial prowess serve as an internal strength that can push the organizational agenda to another level. The high prices of their products and services are weaknesses that need to be addressed. There is rising competition in the market that necessitates lower prices, and high prices for products can fend off possible customers. The company should consider reducing prices to make it affordable to other individuals that rank lower in the income bracket.

Opportunities that the company should capitalize on include advancements in technology, new trends in consumer behavior, new taxation policies, and opening up in new markets. For instance, if the company realizes an opportunity in another country, there is a need to move quickly and establish operations (Lin, 2016). Its ability to set up in new markets is an opportunity that should b well utilized. Equally, new trends in the consumer behavior can offer the organization more business activities. Changes in consumer trends include attitudes that make customers loyal to one brand or go for expensive services (Lin, 2016). Consumers are crucial to any brand in the market, and a change in their behavior is likely to lead to more demand for hotel facilities globally. Threats that are proving problematic to the operations of the business include the rising cost of raw materials that the company requires to provide services, differences in liability laws, lawsuits, and new environmental regulations. Hilton should seek to address the threats as they can limit their ability to provide hospitality services.

Corporate Level Strategy Mix

Hilton Holdings applies different approaches to increase its market share globally. It is essential to focus on its primary strategy mix and how it has impacted their operations. The first strategy that the company uses is through mergers and acquisitions (Levy & Park, 2011). Such initiatives allow a company to operate in structures that are leased for a particular period. The company has partnered with hotels and resorts such as Conrad, Waldorf Astoria, Canopy, and Signia among, others. Its strategy to partner, merger, and acquire has proved helpful in pushing their g=agenda in the market. There is a need to adopt more strategic measures that can see the company form more partnerships. Partnerships, acquisitions, and mergers are a prerequisite for diversification and growth of the company. For instance, Waldorf offers an unforgettable experience at iconic destinations in the world (Lin, 2016). The strategy has helped the company improve its businesses globally to what is now the Hilton Hotels and Resorts worldwide.

The second strategy that the company uses to advance in the market is the growth approach. For decades, the company has thrived in efforts that can see their business expand globally (Kornberger, Pflueger & Mouritsen, 2017). The strategy is geared towards acquisition of more property that is under management of the company over the years. Growth is essential for any organization that aims to do better in the international market. Hilton Inc. provides high-quality services for many people in the world across six continents. As such, a strategy to grow and expand the business is a priority of the company management (Bogetić, Antić & Lekić, 2015). Both the growth and mergers strategy has seen the company penetrate the market more than most of its competitors.

Conclusion

To sum it up, Hilton Hotels and Resorts Inc. is an American company that provides hospitality services for many across the globe. Their products are well known for providing a wonderful experience to customers, which has seen the company rise to glory in the hotel industry. A close examination of company operations indicates that there is a likelihood that the company will improve operations, given the nature of partnership deals trending in the industry. The report has conducted an in-depth analysis of the organization’s internal environment, encompassing strengths, weaknesses, opportunities, and threats to its business. Equally, the study has shifted focus to competition in the industry and possible ways that the organization is achieving sustainability in the industry. In an attempt to understand why the company advocates for growth annually, the paper takes a keen interest in its corporate strategy and how it is implemented. The strategies applied by the company in its operations are fit given the external conditions that encompass the organization. Hilton Inc. can do better in business if proper strategies are laid in place to push their agenda through in the hotel industry.

References

Ahsan, L., Qazi, B., & Syed, S. (2014). Strategic Management of Multinational Companies: Case of Hilton.

Anderson, C. K. (2011). Search, OTAs, and online booking: An expanded analysis of the billboard effect. Cornell Hospitality Report, 11(8), 4-10.

Bogetić, S., Antić, Z., & Lekić, N. (2015). Analysis of hotel enterprises competitiveness aspects in modern business. Journal of Engineering Management and Competitiveness (JEMC), 5(2), 90-101.

Hantuli, L. (2016). An Analysis of Hotel Loyalty Programs: A Case Study of the Hilton HHonors Loyalty Program.

Kornberger, M., Pflueger, D., & Mouritsen, J. (2017). Evaluative infrastructures: Accounting for platform organization. Accounting, Organizations and Society, 60, 79-95.

Levy, S. E., & Park, S. Y. (2011). An analysis of CSR activities in the lodging industry. Journal of Hospitality and Tourism management, 18(1), 147-154.

Lin, X. (2016). Strategy analysis of a boutique and lifestyle hotel: a SWOT analysis (Doctoral dissertation, California State Polytechnic University, Pomona).

Pryce, A. H. (2002). Timeshare industry structure and competitive analysis. International Journal of Hospitality Management, 21(3), 267-275.