Impact of Foreign Hotels on Local Employment in Sub-Saharan Africa

This research paper explores the impact of international hotel chains, particularly Hilton Hotels, on local employment in Africa. The study reveals that the presence of foreign hotels can lead to both positive and negative consequences for local employment, including job creation, skill transfer, and competition with local businesses, as well as displacement of local workers and cultural homogenization.

CONTEMPORARY
DEVELOPMENTS IN
BUSINESS AND
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................5
i) Analysing relevance to Hilton influencing policies and decision making..........................5
ii) Effectiveness of the organization response........................................................................7
iii) Some areas for improvement in response of organization................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
APPENDIX 1.................................................................................................................................12

INTRODUCTION
Management of the organization plays a crucial role in the success of business as they
implement different policies, norms and other relevant procedures. Contemporary issues in the
business and management differ from one venture to another and organization focuses on
necessary steps for solving those issues (Jeston and Nelis, 2014). By improving those issues,
firm will be able to get a competitive edge over their rival firms which are working within the
same industry. This present study will focus on understanding the impact of external business
environment factors along with the evaluation of organization position and response. This
present study will also emphasize on concentrating one of the major themes which is given in the
case study and by considering that, organization will come to know that how it influences their
policies and decision making process.
In relation to the above scenario, organization undertaken for the present study is Hilton
Hotel which is an international chain of hotels and resorts working under the flagship brand of
Hilton Worldwide.
TASK 1
Mentioned hospitality venture has immense goodwill throughout the world and top
executives of Hilton are working relatively well to improve the efficiency and productivity of
firm. Moreover, cited venture also has more than 530 branded hotels across 78 different
countries around the globe. Further, their major operations in these different countries are
privately owned, managed and franchised to independent operators of Hilton Worldwide.
Moreover, organization also has skilled staff who emphasizes on giving productive services to
their clients and this is the only reason due to which mentioned firm has chain of large customer
base (Wirtz, Schilke and Ullrich, 2010).
However, each and every business firm is affected by some internal or external factors
and these factors have impact on the revenue and profit earning capacity of business. PESTLE
analysis is considered as one of the important frameworks as with the help of it, cited firm will
be able to identify the factors which are influencing their operations and practices. External
analysis for the firm has been discussed down under:
Political
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Political factor plays an important role in the hospitality firm as it exists a balance
between the system of control as well as free market. If Hilton Hotel needs to expand their
business operations, then they have to consider the political factors that are prevailing in that
country (Milenkovska, 2011). Some of the political factors which cited venture has to focus are:
 Different tax policies
 Stability of the government
 Entry mode regulations
 Various social policies
 Trade regulations
Further, political situation also differs from one country to another and mentioned
hospitality venture has to consider all the laws for the betterment of business. Employment law,
environment law, health and safety law, etc. need to be considered efficiently so that employees
within the venture can get proper development (Hodgkinson and Healey, 2011). However,
political situation within the Northern Ireland and other part of UK is not good and this can
affect the business operations of Hilton. Moreover, UK is also planning to exit the European
Union (EU) and this decision can hamper their revenue and productivity as well.
Apart from it, Greece is facing economic crises and due to this, functioning of Hilton
Hotel will get affected as people have less money to spend and due to this, their profit and
turnover will be reduced at a significant rate.
Economic
Economic factors can be termed as metrics which measure the health of economic region.
Economic scenario of one country keeps on changing and by considering that, mentioned
business venture has to understand their current level of inflation, unemployment, economic
growth as well as international trade (Chan, 2012). Apart from it, there exists some other factors
as well and these are:
 Disposable income of buyer
 Credit accessibility
 Interest and unemployment rates
Moreover, UK economy is also on the verge to enter into recession. This recession will
be a double dip recession because there exists many reasons for the same such as inflation rate,
euro-zone crises, unemployment, etc (Khurana, 2010). Further, any fluctuation in the interest rate
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will affect Hilton Hotel’s capability in the respect of attracting their travelers and guests. Cited
venture needs to take care of all these factors and should frame their plans as well as policies by
considering the same. Further, this factor has great importance for the cited firm and government
also needs to take some relevant steps to boost the national economy of country.
Social
Social factors are the elements which assess the mentality of people who exist in the
dynamic market. These social factors are also considered as demographic aspects. Further, there
exist many social factors on which cited hospitality firm can focus and these are:
 Population
 Distribution of income
 Change in taste and demand of customers
 Education level of individuals
Moreover, Hilton Hotel has immense corporate image throughout the world and
organization focuses on giving their best to satisfy the needs and demands of their potential
clients. They produce all those products and render services which focus on maximizing the
demand of customers (Hutt and Speh, 2012). With this implication, Hilton is able to increase
their revenue and profitability year by year. However, with changing demographics in the UK
and around the globe, cited firm operations are affecting to a great extent. Apart from it, change
in the family patterns, shifting values within the society and increasing role of social media are
also pampering the business activities of cited business venture.
Further, with the introduction of some gaming events, tourism gets boosted within the
country and hotelier like Hilton pretends to get more customers during season. Moreover,
amount of pension has also increased and this will promote the retired people to travel and stay
more in the hotels. This will improve the revenue and profit share of cited hospital venture.
Technological:
Technological factors emphasize on recognizing the potential technologies which are
available with the Hilton hotel. The role of technology within the hospitality firm is increasing
year by year and this trend will tend to continue because the Research and Development (R&D)
department driving up new innovations on constant basis (Sturdy, 2011). Further, there exists
large challenge for management of Hilton hotel and some of the major technological factors are
discussed down under:
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 New innovations and upgradation
 Rate of technological advances and innovations
 Rate of technological devolution
 Development of new technological platforms
Moreover, with the re-development of the check-in service, passengers will be able to
book their rooms in no time and this will reduce the time for both passengers as well as
employees of hospitality firm. Further, rooms can be booked with the help of smart phones or
through online platform which will also lead into cut down of cost and provide various benefit to
the clients. Apart from it, in the future, Hilton is focusing on conducting the 3D conferences
where all the managers can interact with each other by staying on to single platform (Pettit, T.J.,
Fiksel and Croxton, 2010). Technological advancement plays a crucial role and cited venture
need to upgrade their technologies to stay ahead of their other competitors who are working
within the same industry.
Legal:
Legal factors will help mentioned hospitality firm to learn about different laws and
regulations which is prevailing within the country. These legal factors play a significant role and
help organization to avoid unnecessary legal costs. There exist different legal factors on which
Hilton should focus on and these are:
 Employment regulations
 Health and safety regulations
 Products and service regulations
Further, there exists sudden change in the UK rules and regulations which might affect
the performance of the hospitality firm. Apart from it, immigrant rules and regulation is another
factor which will pamper the organization performance. Minimum wages for employees,
maternity and statutory pay has also increased. However, by considering the above fact, it is
evident that Hilton will pay more to their employees and this shows that they will spend more
money on their workforce. Further, mentioned organization will increase the cost of their rooms
and other services in order to make the losses (Hilton Hotels PESTEL Analysis, 2015). However,
their main motive is to increase the chain of their loyal customer base which will help them in
generating more of the revenue and profits.
Environmental:
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Impact on environment is the biggest concern of government and local body penalizing
firms who are causing adverse effect to environment. They put huge fines on organization who
are affecting the environmental conditions. Customers too switch from one brand to the other if
organization does not fulfill their environmental duties. Some of the common environmental
factors are:
 Waste disposal law
 Environmental protection law
 Energy consumption regulation
Further, impact of change in weather conditions will affect the revenue of Hilton hotel.
Apart from it, polluting the environment will impact their brand image and customers will start
switching towards the competitive brand. Further, with more construction energy prices will rise
and the hotel firm has to spend more money on the bills which will significantly reduce their
profit. In order to overcome this, cited hospitality venture can focus on implementing solar
panels and wind turbines which will help them in reducing their electricity bill (Gosnell, H. and
Abrams, 2011). Reducing the waste from food product will also help corporate to improve their
brand image throughout the globe.
TASK 2
The theme undertaken for mentioned hospitality organization is Socio-demographic
trends because hotels are customer oriented industry and they have to produce those products and
services which satisfy the customers needs and wants. Further, Hilton is a global hospitality
brand and they need to consider each and every demographic in order to increase their revenue
and productivity. These increased revenue improve their brand image and give them competitive
edge over the rival firms who are working within the same industry.
i) Analysing relevance to Hilton influencing policies and decision making
Demographic factors are those which are expressed statistically on the basis of the age,
sex, education level, income, marital status, occupation, religion, etc. Further, the population
changes and the composition made on the basis of market opportunity. The top executives make
decision considering all these relevant factors and emphasize on achieving the organization goals
and objectives. Further, hospitality firm feels that government is not putting their best efforts for
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the development of hospital organization and enforcement of different acts and laws makes much
more difficult for these ventures.
Apart from it, various crucial decisions need to be taken by the top executives relating the
needs and demands of the customers (Piekkari, Plakoyiannaki and Welch, 2010). Population size
and growth plays a crucial role and business venture have to consider efficiently in order to
increase their brand image and productivity. Further, the trend of individual needs and demands
differ from one person to another and business organization has to consider this effectively in
order to achieve their relevant mission and vision. Intercontinental Hotels Group Plc, Choice
Hotels International, Inc., Marriott International, Inc., etc. are the major competitors of Hilton
and they too have almost same amount of capital and policy which mentioned business
organization have.
Further, different socio-demographic trends like income level and taste and preference of
the customers have an impact on the performance of mentioned business venture. Manager of the
hospitality organization has to attract individuals in order to make a chain of the loyal customer’s
base (Research and Markets: Evolving Consumer Landscapes: Key Socio-Demographic Trends
Driving Consumer Choices, 2015). Income level plays a crucial role as with more income,
people will tend to spend more and with more spending, there will be more revenue for the
hospital venture. Further, attracting individuals through effective advertisement is a recent
concept and with that Hilton will be able to improve their earning capacity.
Moreover, different other facilities like spa, gymnasium, etc. attracts customer towards
the hotel and by getting lot more comfort at an affordable package give them maximum level of
satisfaction (Blomquist and et.al., 2010). Apart from it, different types of food, menu, etc. will
attract clients mind towards it and getting hygienic food at a best of the price will make them
loyal customer base for the hospital venture. Organization further takes feedback from their
potential clients and tends to make changes on the points which clients have suggested. By
taking their suggestion into consideration, organization will be able to improve their functioning
and customers will be interested into corporate services as well because their decisions were
considered in effective manner.
Apart from it, family and household arrangements are becoming much more complex and
along with taking care of individuals, cited firm has to focus on family members as well. Further,
family structure is becoming much more diverse and nowadays these families are breaking all
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the traditional forms (Storey, 2014). Family members having a unique taste and preferences and
by attracting these individuals towards hospitality venture, firm will be able to increase more of
their revenue and productivity.
Further, the top management of Hilton has to take major decisions relating these
demographic trends in order to give their competitors a stiff competition. Major decision making
is done by the top executives but they take relevant suggestion of their potential talented
employees as well. Moreover, different policies need to be frame relating to the fair dealing and
protection of individuals because cited venture having immense goodwill throughout the globe
and a sudden illegal step will pamper their brand image in the eyes of their potentially attracted
clients.
ii) Effectiveness of the organization response
From the view point of Gröschl (2011) the first issue which cited hospitality faces is of
culture and the role of the local culture having huge impact on the performance of the business
venture. Moreover, crucial decisions have to be taken relating towards different demographic
factors on which cited firm will emphasis. This decision will increase the earning capacity for the
business enterprise and will give them a competitive edge over the ventures who are working
within the same industry. According to Fortanier and Van Wijk (2010) different demographic
factors has different impact on the growth of hospital venture and cited firm focusing on doing
relatively well in order to improve their corporate image in the eyes of their customers. Effective
decision has to be taken regarding Segmentation, Targeting and Positioning (STP). Attracting
proper segment will increase customer base towards their products and service. Further, targeting
them through effective channel of communication will attract large audience towards it.
However, the major role is played at the time of positioning as Hilton products and services
should be positioned at that level as there only exist few competitors of that particular service.
This will develop immense goodwill in the eyes of their competitors and Hilton will dominate
the hospitality industry.
However, Slattery (2012) stated that employees are the base of hospitality venture and
they need to work with best of their dedication and efforts in order to achieve the organizational
goals and objectives. Moreover, different workers working under different department need to
perform their operations in a positive manner which will make them dedicated employer towards
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the hospitality venture. Apart from it, being a globally recognized firm, cited venture have
talented and multi skilled employees who performs their operations with best of their dedication
so that they can achieve their individual as well as organizational goals and objectives. However,
HR department of Hilton also doing relatively well in order to motivate their employees. They
giving their workers appraisal, incentives and other monetary benefits which are making them
dedicated for the work they have been assigned to perform. Promotion and recognition also
boosting their morale and making them dedicated to achieve organization aims and vision.
On the other side, Guillet, Zhang and Gao (2011) argued that individual income level also
pampers the organization results and cited firm need to set a target regarding the demographic
population whom which they going to target. Being a global recognized firm, organization
having effective operations throughout the globe and hospitality firm charges relatively high for
the service they render to their clients. In relation to it, their major focus is on to leisure and
business class people. Just because these individual do not care about the charges but require best
of the services which gives them maximum level of satisfaction.
These responses towards the forces will make Hilton different from their competitors and
with that cited venture will be able to increase more of their revenue and productivity throughout
the globe. Moreover, stated that there are major competitors who are giving Hilton a stiff
competition. In order to get ahead of them, cited venture has to look towards the offers and
policies which competitors have implemented in their operations. By identifying those, venture
can make sudden changes in their policies as well and with that they will get a competitive edge
ahead of their competitors.
iii) Some areas for improvement in response of organization
Hilton hotels and resorts having their effective operations throughout the globe and cited
firm is considered as leading hospitality chain who works under Hilton Worldwide. However,
there exist some areas where cited firm can make necessary improvement in order to get more of
the customers trust and make a chain of loyal clientele base (Costen, Johanson and Poisson,
2010). These improvements can be done in field of setting the equivalent marketing mix for their
existing as well as newly launched products and services. Moreover, services which Hilton
render tends to be quite unique and with that they get more of the individual's response.
However, price of the products and services tends to be quite high and it is not possible for all
8

the individual to use their services (MacLaren, Young and Lochrie, 2013). Majorly cited firm
emphasize on attracting individuals who have high income level and are interested in more of
comfort rather than depending on prices.
In order to serve a large individual, cited firm either can focus on launching schemes
during season time where they will get more of the response from customers. Once the individual
liked their services, they will become a loyal customer base for the business venture. Apart from
it, cited firm can make necessary changes in their plans and policies too. With changes in those,
they can motivate their employee’s upto a good extent which will make them dedicated towards
their work and they will be able to give best of their efforts to achieve individual and
organizational goals and objectives (Bohdanowicz, Zientara and Novotna, 2011). Moreover,
countries which are facing inflation can be supported by giving more of the employment to the
local resident in the hospitality venture. This will reduce the unemployment in the country as
well and individual will get a legal source of income.
CONCLUSION
From the above report it is clearly inferred that Hilton hotel and resorts is an international
chain of hotel and resorts who are working under the flagship brand of Hilton Worldwide. This
present study showcases that hospitality firm having effective goodwill throughout the globe and
they have to consider major external factors as they can impact their organization performance.
This document also showcases the deep study of PESTLE analysis which venture has to consider
in order to improve their revenue as well as productivity. Moreover, socio-demographic trend is
considered as a theme which showcase that Hilton have to consider varied factors in order to get
more of the customers trust from around the globe. Different factors like age, population, income
distribution, gender is taken into consideration for making effective plans and policies for the
hospitality organization. At last, some areas are taken for improvement like employment law,
income level of which will improve employee’s performance within the Hilton hotel.
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REFERENCES
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matters. Project Management Journal. 41(1). pp.5-16.
Bohdanowicz, P., Zientara, P. and Novotna, E., 2011. International hotel chains and
environmental protection: An analysis of Hilton's we care! programme (Europe, 2006–
2008). Journal of Sustainable Tourism. 19(7). pp.797-816.
Chan, W., 2012. Energy benchmarking in support of low carbon hotels: Developments,
challenges, and approaches in China. International Journal of Hospitality Management.
31(4). pp.1130-1142.
Costen, W.M., Johanson, M.M. and Poisson, D.K., 2010. The development of quality managers
in the hospitality industry: Do employee development programs make cents?. Journal of
Human Resources in Hospitality & Tourism. 9(2). pp.131-141.
Fortanier, F. and Van Wijk, J., 2010. Sustainable tourism industry development in sub-Saharan
Africa: Consequences of foreign hotels for local employment. International Business
Review. 19(2). pp.191-205.
Gosnell, H. and Abrams, J., 2011. Amenity migration: diverse conceptualizations of drivers,
socioeconomic dimensions, and emerging challenges. GeoJournal. 76(4). pp.303-322.
Gröschl, S., 2011. Diversity management strategies of global hotel groups: a corporate web site
based exploration. International Journal of Contemporary Hospitality Management.
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Guillet, B.D., Zhang, H.Q. and Gao, B.W., 2011. Interpreting the mind of multinational hotel
investors: Future trends and implications in China. International Journal of Hospitality
Management. 30(2). pp.222-232.
Hodgkinson, G.P. and Healey, M.P., 2011. Psychological foundations of dynamic capabilities:
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Jeston, J. and Nelis, J., 2014. Business process management. Routledge.
Khurana, R., 2010. From higher aims to hired hands: The social transformation of American
business schools and the unfulfilled promise of management as a profession. Princeton
University Press.
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MacLaren, A.C., Young, M.E. and Lochrie, S., 2013. Enterprise in the American West: taverns,
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APPENDIX 1
Hilton hotel and resort is a part of Hilton Worldwide which comprises more than 10
brands, 4,115 properties and more than 300,000 employees who are giving their productive
services throughout the globe. Further, mentioned hospitality venture is also considered as an
international chain of hotels and resorts and their main aim is to get more of the customer's
response from around the globe. Hilton hotel having their major emphasis on both the business
as well as the leisure travellers.
There main aim is to give client best of the services and satisfy their needs and demands
in effective and efficient manner. Cited hospitality firm has installed energy efficiency devices in
many of their UK branches, installing green controls for doors, windows and heating to ensure
intelligent usage of energy. These things make them unique and this is the only reason why firm
has an competitive edge when compared with their major competitors who are dealing within the
same industry.
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