Distribution and Revenue Management in the Hotel Industry

This report analyzes the internal environment of Hilton Hotel in Sydney, including competitor and SWOT analysis, yield management strategies, and potential distribution channels. It also discusses the hotel industry in Australia and the importance of effective services and customer relationships.

Running head: DISTRIBUTION AND REVENUE MANAGEMENT
DISTRIBUTION AND REVENUE MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction - Overview of the company and position in the market........................2
Body...............................................................................................................................2
Competitor analysis....................................................................................................2
SWOT analysis of the company.................................................................................3
Yield management or revenue management strategies..............................................4
Conclusion......................................................................................................................5
Overview of potential distribution channels used by the company...........................5
References......................................................................................................................6

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Introduction - Overview of the company and position in the market
Hotel Hilton is a hospitality and service based organization that has its operations in
Sydney. The organization is located in a central area and is able to provide many different
amenities and facilities to the guests. The location of Hilton Hotel is near some of the major
attractions of Sydney that include, Bondi Beach, Sydney Opera House and Darling Harbor.
The major features that are offered by the Hotel mainly include, award winning restaurants
and the modern guest rooms, spa, fitness centre (Hiltonsydney.com.au., 2019). The
organization has been able to create a major position in the industry with the help of effective
services that are offered to the consumers. The hotel and hospitality industry of Sydney is
booming and is able to provide major contribution to the economy of Australia. The major
reason behind the growth of the hotel industry of Sydney is based on the organizations like,
Hilton, Sheraton and Novotel. Hotel Hilton has gained a revenue of 5.7 Million Dollars in the
year 2018 (Hiltonsydney.com.au., 2019).
The analysis in the report will be mainly based on the internal environment that has
been developed within the hotel and the analysis of its competitors in the industry as well.
The yield management based techniques that have been implemented by the hotel will be a
major part of the analysis.
Body
Competitor analysis
Hotel Hilton is currently operating in the highly competitive hospitality industry of
Australia. The organization has to face tough competition from the major hotels like, Grace
Hotel, The Woolbrokers Hotel Darling Harbour, Backpackers Newcastle. The organizations
have to compete for a greater share in the competitive market with the help of innovative
services that are provided to the guests.

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SWOT analysis of the company
Hilton Group of Hotels had started its operations in the year 1919 by Conrad Hilton.
The organization mainly aims at providing an enhanced experience to the customers who
visit the hotels. The high quality based services that are provided to the guests mainly
include, gym, spa, sauna. Hilton Hotel had won many awards at global level for effective
services that are offered to the customers (Arasli et al., 2017).
Strengths – The recognition of the brand of Hotel Hilton is high that is based on the
presence of the organization in different countries in the world. The management of the
Hilton Group has implemented many innovative ideas in order to attract the consumers. The
relationship that has been developed with the customers is considered to be a major strength
of the organization in hospitality industry (Chen et al., 2016).
Weaknesses – The areas in which the organization does enough amounts of resources
or skilled employees have an influence on the operations of Hotel Hilton. The network of
Hotel Hilton is not developed and this has a major impact on the issues that are faced in
different parts of the country (Dedeoğlu & Demirer, 2015).
Opportunities – Hotel Hilton has the opportunity of exploring the Australian market
in an effective manner in order to improve its levels of presence in other parts of the country
as well. The organization can also aim at the development of proper relationship management
based systems for increasing the levels of customer loyalty. Hilton Group can aim at
acquiring the local hotel based groups for reducing the competition that is faced locally
(Dzhandzhugazova et al., 2016).
Threats – The levels of rivalry and competition in the hospitality industry are
exceptionally high and this is able to pose a major challenge to revenues that are gained by
Hilton Group. New organizations that are entering the industry are also capable of providing

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effective levels of challenges to the Hilton Group. Levels of compensation that are required
to be provided to the employees have increased in the recent times. This is a major factor that
is able to affect the profit levels of Hilton Group (Kim, Lim & Brymer, 2015).
The internal analysis of Hotel Hilton has been able to depict that although Hotel
Hilton has developed its position in the hospitality industry, the improvement of strategies is
important for the ways by which it can maintain its operations in the future. The major
weakness that has been identified in the analysis and needs to mitigated is based on the
maintenance of costs and profit margins (Kim, Lim & Brymer, 2015).
Yield management or revenue management strategies
Yield management can be defined as the process that is implemented for selling a
service or product at the right time and price to the right customers. The determination right
pricing policies for the hotel rooms is considered to be yield management strategy. The three
R’s are a major part of the yield management strategies, that include, providing the right rates
to the right customers at a right time. The process of revenue management in hotels is slightly
different from the yield management strategies (Kim, Lim & Brymer, 2015). Yield
management is based only on the occupancy in hotels and revenue management consists of
many other activities that are performed in a hotel other than room occupancy. The
implementation of revenue management in Hotel Hilton will be based on the ways by which
the compensation rates of the employees can be controlled in order to maintain an effective
profit margin (Nieves & Quintana, 2018). This will play a key role in increasing the
profitability levels of the organization. The increase in compensation rates of employees is
considered to be a major threat to the operations of Hilton Hotels in the highly competitive
hospitality industry. The organization will be able to maintain its operations in the hospitality
industry in a successful manner with the proper development of yield management based
strategies (Nieves & Segarra-Ciprés, 2015). Revenues of the Group will be maintained with

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respect to the operations that have been developed in the industry. The employees who form
the most important part of service organizations can be maintained effectively with the help
of proper yield management based strategies (Nieves, Quintana & Osorio, 2016).
Conclusion
Overview of potential distribution channels used by the company
The presence of Hilton Group can be increased in the hospitality based industry with
the help of different types of distribution based channels which can prove to be helpful for its
future operations. The online distribution channels will play the most important role in the
ways by which Hilton Group can improve its operations in the competitive service based
industry. The website of the hotel can prove to be highly effective for the ways by which the
organization can provide effective information to the consumers (Leung, Bai & Stahura,
2015). The online travel agents or OTAs are also important for the proper development of a
channel of distribution that can be formed by Hilton Group. Social media can play an
important role in the development of the distribution based channels and reaching the
customers within a short period of time. Hilton Group will be successful in improving its
position and increasing its presence in other parts of Australia with the help of proper
distribution of the services that are targeted towards the guests. This is considered to be a
major factor that lead to the success of Hilton Group in the hospitality industry (Dedeoğlu &
Demirer, 2015).

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References
Arasli, H., Bahman Teimouri, R., Kiliç, H., & Aghaei, I. (2017). Effects of service orientation
on job embeddedness in hotel industry. The Service Industries Journal, 37(9-10), 607-
627.
Chen, C. M., Lin, Y. C., Chi, Y. P., & Wu, S. C. (2016). Do competitive strategy effects vary
across hotel industry cycles?. International Journal of Hospitality Management, 54,
104-106.
Dedeoğlu, B. B., & Demirer, H. (2015). Differences in service quality perceptions of
stakeholders in the hotel industry. International Journal of Contemporary Hospitality
Management, 27(1), 130-146.
Dzhandzhugazova, E. A., Blinova, E. A., Orlova, L. N., & Romanova, M. M. (2016).
Innovations in hospitality industry. International Journal of Environmental and
Science Education, 11(17), 10387-10400.
Hiltonsydney.com.au. (2019). Hilton Sydney | Rooms in CBD | Sydney. Retrieved from
https://www.hiltonsydney.com.au/
Kim, W. G., Lim, H., & Brymer, R. A. (2015). The effectiveness of managing social media
on hotel performance. International Journal of Hospitality Management, 44, 165-171.
Leung, X. Y., Bai, B., & Stahura, K. A. (2015). The marketing effectiveness of social media
in the hotel industry: A comparison of Facebook and Twitter. Journal of Hospitality
& Tourism Research, 39(2), 147-169.

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Nieves, J., & Quintana, A. (2018). Human resource practices and innovation in the hotel
industry: The mediating role of human capital. Tourism and Hospitality
Research, 18(1), 72-83.
Nieves, J., & Segarra-Ciprés, M. (2015). Management innovation in the hotel
industry. Tourism Management, 46, 51-58.
Nieves, J., Quintana, A., & Osorio, J. (2016). Organizational knowledge, dynamic
capabilities and innovation in the hotel industry. Tourism and Hospitality
Research, 16(2), 158-171.