Strategic Analysis of Hilton Worldwide

Read about the strategic analysis of Hilton Worldwide, including its overview, strategic direction, competitive advantage, market trends, financial analysis, and more. Find out why Hilton Worldwide is a great company to invest in.

Running head: STRATEGIC ANALYSIS
hILTON wORLDWIDE
Strategic Analysis
3/16/2019

STRATEGIC ANALYSIS 1
Executive Summary
Hilton Company offers quality services to
enhance the customer delight, which
contribute in improving the brand value of
the group. Along with this, with the
support of their disciplined approach to
asset management, company create and
implement the strategic plans for all the
hotels comprised in the portfolio of the
group in order to improve its position in
the market. The group has framed its
strategic direction with the motive to
successfully lead the hotel and resort
industry. The entire group is focused
towards giving an unforgettable experience
to its customers, which can make them
loyal customers of the company. In
numerous numbers of hotels, company
invest in renewing the rooms of the guest
and public spaces and improving retail and
meeting spaces to increase profitability.
Furthermore, strategic objectives of the
company comprise the constant expansion
of their worldwide footprint. As Hilton
they take entry in new franchise contracts,
it expand its operations with limited or no
investment of the capital since the required
capital to construct and maintain the hotels
is normally offered by the third party or
the owner of the hotel with whom the
contract of offering franchise services has
been initiated.
However, the company is surviving in the
competitive environment and its major
competitor is Marriott, which is
experiencing a major decline in its
revenue. This leads to the major
opportunities for the investors to proceed
with their investment with Hilton
Worldwide for better stakeholders’ returns.
The adopted strategies by the group that is
segmentation, targeting, and positioning
supports company in successfully aiming
its marketing efforts towards the target
group of customer that have the capability
to pay for the offered services. Moreover,
future position of the company will be
analysed with the number of satisfied

STRATEGIC ANALYSIS 2
customers that will endure to consume the
services of the company.
Overview of Hilton Worldwide
Hilton Worldwide is formally called as
Hilton Hotels Corporation. It is a
hospitality company of America that
involved in the management and
franchising a wide hotels and resorts
portfolio. In 1919, the group was
established by Conrad Hilton. According
to the reports of 2018, the portfolio of the
group comprises around 5,500 properties
with 894,000 rooms that are present in 109
nations and territories. Hilton is one of the
leading companies in the hospitality
industry, with 14 top brands including
around 5,400 properties with closely
880,000 rooms, in 106 nations 12. Hilton is
devoted to satisfying its mission of being
the most hospitable business by offering
best experiences to every guest all the
time.
14
Hilton is involved in different corporate
social responsibility programs in order to
contribute some parts towards the society.
Few of its activities are mentioned below:
Empowering and educating personnel -
Hilton Worldwide University provided
around 2 million courses and 5 million
hours of learning for the workers in the
year 2015 9. Besides this, it organized an
anti-corruption and ethics training
program, which was attended by around
14,000 managers of Hilton.
Minorities and Gender Equality –
Women employees signify 51% in the US
owned, and managed corporate location of
Hilton. From, Hilton has hired around
7,300 veterans and their spouses 9.

STRATEGIC ANALYSIS 3
Strategic Direction of Hilton
Hilton Worldwide is leading hotel and
resorts brand with the mission of
becoming the most hospitable business
across the globe by offering heartfelt
experiences to their guests, the opportunity
to the team members, and positively
inspire the community. The statement of
mission focuses in two main aspects i.e.
high positive impact and hospitality. It
believes in becoming the world’s most
hospitable business, by offering quality
services to the consumer like Amazon
does.
According to the report of American
Customer Satisfaction Index, people are
more satisfied with the hotels that offer
quality and luxurious services. As per the
report Hilton is placed at top position with
81 score, in comparison to its competitor
Marriott and Hyatt with 80 score 1.
Strategies
Strategies are framed by the businesses to
successfully meet its strategic direction. In
order to meet its strategic direction, Hilton
Worldwide is involved in practicing
different strategies like segmentation,
targeting and positioning. Under
segmentation, Hilton has divided its
market based on unique ambiance and
experience. The targeting strategy of the
company is based on the profile of the
customer that is upper-class society.
Positioning of the business highlights its
effectiveness and performance in the
market. The Hilton Group is positioned as
a luxury hotel group among the customers
5.
Unique Selling Proposition of Hilton
Worldwide
Sales orientation – The sales orientation
is dependent on the ideas that customers
will buy more services and goods. In
marketing, it is important for the business
to establish its USP, which supports it in
setting the product, service, or brand ahead
of the rivals. The USP of Hilton
Worldwide is its unique facilities for its
guest i.e. spa, outdoor pool, health club,

STRATEGIC ANALYSIS 4
etc. Besides this, the brand reputation of
the group is its main USP.
Opportunities Grabbed by Hilton
Worldwide
On the worldwide level, customers are
becoming aware of their health: many
people are taking numerous actions in
order to maintain their fitness, choosing to
have healthy foods and take vitamin pills
as a preventive measure 11. However, lack
of consciousness among people regarding
the relationship between the consumed
food and their health is a big challenge,
particularly in emerging nations. In order
to solve this issue and encourage
customers to have healthy food options,
Hilton Worldwide has introduced Grab-
and-go dining at hotels 16. As per Jonathan
Wilson, this shift from full restaurant
service to grab and go, has offered more
choices to the Guests and lowered their
expenses. This has identified that
customers desire to have more customized
experience by including their unique
needs.
According to the research, today, every
business is trying to offer affordable
services to its customers in order to
strongly compete with rivals. With a
similar perception, Hilton Worldwide is
entering into the segment of affordable
hotels i.e. midscale hotel segment for the
young travellers. The brand name of the
mid-scale hotel by Hilton is Tru 19. The
hotels will provide limited beverages and
food options to the customers. This
business idea will support company in
giving strong competition to the mid-scale
hotels and reshaping its own strategy.
Besides this, it will increase the revenue of
the entire group.
Future Opportunities for Hilton
Worldwide
Hilton can transform its F&B concept in
order to attract customers with altering
preferences related to dining, like the
organic menu and healthier choices,
appealing new flavors, and social setting at
the bar and restaurant. According to John
Greenleaf, by transforming the F&B

STRATEGIC ANALYSIS 5
concept business can cater the changing
needs of its guest, while increasing its
revenue for the owners and developers of
the hotel 15.
Hilton worldwide can put its efforts into
making its strong position in the Australia
because this market is turning into the
largest economic center 3.
The Company can try to involve in
introducing different gaming events across
the world and can collaborate with partners
who can support in establishing the ground
for the gaming events in the market with
high demand.
Strategic Analysis of Hilton Worldwide
Porter 5 Force Framework
6
Threat of Substitute Products
Substitute product threat in the hotel
industry is low. The Hilton hotel’s direct
substitute comprises people staying at their
relatives or friends home and people
renting flats or apartments for short visits
10. However, planning of these choices is
very time-consuming and related to
annoyance.
Threat of New Entrant
New entrant threat in the hotel industry is
low for the Hilton Worldwide because it is
very difficult to establish a high brand
image in the market in which there is a
number of high and premium brand
available. Besides this, establishing a
premium brand into the industry require
high capital investment, which is not
possible for many business owners 10.
Rivalry among existing players
The competition among existing rivals in
the premium hotel segment is fierce. The
key competitors of Holton Hotels and
Resorts are Hyatt Regency, Marriott,
Radisson, and Sheraton, Loews Corp., and

STRATEGIC ANALYSIS 6
Starwood Hotels and Resorts. Hilton is
enjoying high returns on the worldwide
scale due to its high capital investment in
comparison to its competitors like
Marriott. Hilton focuses on offering
luxurious and quality services to its quest
at high rates. On the other side Marriott
ensures total value for money, therefore, it
tries to offer affordable services to its
guest 4.
Power of Buyers
The bargaining power of the customers in
the hotel industry is high due to the
presence of a number of options in the
market 10. In addition, the high bargaining
power is resulting in decreasing the cost of
the hotels, for instance, Hilton Worldwide
has announced to open mid-range hotels
for young travellers.
Power of Suppliers
The suppliers bargaining power in the
hotel industry is low. The supplier power
of the Hilton Worldwide is low because of
the lack of inimitability of services and
products supplied. Besides this, the
supplier switching cost is very low for the
Hilton Company.
Competitive Advantage of Hilton
Worldwide
Training program – Hilton is involved in
offering excellent training programs in
order to gest best out of its employees. The
brand has best competencies in creating a
unified program of training to manage
around 14 top brands 2.
Market Trends of Hotel Industry
The hospitality and hotel is the fastest
developing division in the world. Tourism
and Travel have supported industry to
remain afloat in spite of economic decline.
According to the analysis of the industry
of Hotel, bookings in tourism and travel
hit around $1.6 trillion in the year 2017
due to strong worldwide economy 13.
Financial Analysis of Hilton Group
Hilton Worldwide is one of the premium
brands in the hotel industry, which has
gained the trust, and support of its guest.
The hotel is involved in offering different
facilities to its guest such as spa, spa,

STRATEGIC ANALYSIS 7
outdoor pool, health club, etc. However,
from the comparative analysis, it could be
said that total revenue of Hilton
Worldwide is decreasing faster on the
yearly basis by -3.96%, in comparison to
its competitor Starwood Hotels and
Resorts that is -1.76%. However, the total
revenue of Marriott is also decreasing by -
8.82% 8.
The Net Margin of Hilton Worldwide that
is 7.28% has reported lower profitability of
the company in comparison to its
competitors. Marriott International has
reported 7.77% as a net margin, which is
more than Hilton Worldwide 7. Marriott
has attained the increasing net margin by
increasing the prices of its services.
The number of hotel rooms of Hilton
Worldwide from 2009 to 2018 is
increasing, however, in comparison to
Marriott, Hilton offers less number of
rooms worldwide. In 2018, Hilton has
912,960 hotel rooms and on the other side,
Marriott has 1.26 million hotel rooms
worldwide.
18
17
In conclusion, it is suggested that Hilton
Worldwide is a best company to invest.
Surviving in the competitive market,
Hilton is capable to manage its strong
position of its brand and find its strength in
the market.

STRATEGIC ANALYSIS 8
References
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Worldwide Holdings Inc. [online].
Available from
https://csimarket.com/stocks/comp

STRATEGIC ANALYSIS 9
etition2.php?code=HLT [accessed
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[accessed 10 March 2019]
11. Global Alliance for Improved
Nutrition (2019) Why do we need
to go beyond awareness raising for
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[accessed 10 March 2019]
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/09/hotel-industry-analysis-market-
statistics/ [accessed 10 March
2019]
14. Keshi, E. (2015) Hilton Worldwide
Recruiting For Front Office
Manager [online]. Available from
http://youthvillageng.com/hilton-
worldwide-recruiting-front-office-
manager/ [accessed 10 March
2019]

STRATEGIC ANALYSIS 10
15. News Room (2017) Hilton Garden
Inn Serves Up New Food &
Beverage Offerings [online].
Available from
https://newsroom.hilton.com/hgi/ne
ws/hilton-garden-inn-serves-up-
new-food-beverage-offerings
[accessed 10 March 2019]
16. Simon, E. (2016) Hotel grab-and-
go outlets shape up [online].
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food-beverage/hotel-grab-and-go-
outlets-shape-up [accessed 10
March 2019]
17. Statista (2017) Number of Marriott
International hotel rooms
worldwide from 2009 to 2017
[online]. Available from
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247304/number-of-marriott-
international-hotel-rooms-
worldwide/ [accessed 10 March
2019]
18. Statista (2018) Number of Hilton
Worldwide hotel rooms from 2009
to 2018 [online]. Available from
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247301/number-of-hilton-
worldwide-hotel-rooms/ [accessed
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19. USA Today (2016) Hilton
announces new affordable hotel
brand, Tru [online]. Available
from
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avel/hotels/2016/01/25/hilton-tru-
new-hotel-brand/79185810/
[accessed 10 March 2019]

STRATEGIC ANALYSIS 11