This report analyzes strategic planning in the hospitality industry, focusing on Hilton Hotel as a case study. It examines various strategic options, factors affecting implementation, and performance metrics used by Hilton to achieve success.
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Strategic Planning for the Hospitality Industry
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Table of Contents INTRODUCTION...........................................................................................................................3 BODY..............................................................................................................................................3 1. Strategic Options for Hilton Hotel..........................................................................................3 2. Analysis of factors that affect strategy implementation of Hilton Hotel................................5 3. Analysis and evaluation of different performance metrics for Hilton Hotel..........................7 CONCLUSION................................................................................................................................8 REFERENCES..............................................................................................................................10
INTRODUCTION Strategicplanningreferstomethodsusedtocreatesdifferentstrategiesforan organisation, so that they are able to utilise their resources in an effective manner. Management comes together to ascertain visions and create goals that have to be achieved(Phillips and Moutinho, 2014). They make steps that have to be followed by the organisation's employees, so that they can create proper strategies. They are implemented in a systematic manner, which helps organisation in working effectively and efficiently. Hilton Hotel is a famous hotel company that operates globally within the hospitality industry. It was founded in 1919 and has been offering many services to customers in different parts of the world. There are around 500 hotels and resorts that are operated by them. Their management has to perform certain activities, so that they are able to createstrategies through proper planning. This assignment will study the different types of strategic options that Hilton Hotel can use and critical analysis ofdifferent factors that can affect implementation of created strategies will be done. It will also analyse various performance metrics of Hilton Hotel. BODY 1. Strategic Options for Hilton Hotel Strategic planning at Hilton Hotel is considered to be a difficult task due to analysis of various factors(Strategic Planning,2018). They operate in different countries and management has to ensure that they pick best strategic option for the organisation. Franchising Franchising refers to the act of expanding a business to different countries by providing a license to the individual that is interested in purchasing and operating business. This strategic option is commonly used in the hospitality industry and has proved to be very successful. Hilton Hotel has used this strategy for the purpose of growing their organisation(Lopes,2016). Franchise has helped this organisation to set up business in more countries. There are about 70% rooms of Hilton Hotel that have been franchised to operators and companies. This allows hotels to have the freedom of running operations and they do not have to provide payments for maintenance and other overhead costs. Hilton Hotel has strict rules and policies when they provides licenses to other businesses(Sehitoglu, Ross and Köseoglu, 2017). There are regular inspectionsdonetoensurethatfranchiseeareproperlyperformingbusinessoperations.
Franchises help in increasing the country's economic scale as well as Hilton Hotel's brand name. Systematic research on market is done before handing over their company's operations. They analyse competition and certain strategies that can be used to overcome it(Bertozzi, Ali and Gul, 2017). Overall, franchising has been effective for Hilton Hotel and they regularly adopt this strategic option for their business. There are some other famous strategic options that can be used by Hilton Hotel, if they feel like their current strategies are not helping them in a success manner. These include the following: Management Contracts These are arrangements done by certain organisations within the hospitality industry, in which managers are given the responsibility to manage daily operations and are provided with compensation. These contracts are made for the purpose of running business in different parts of the world, without having to manage all properties independently(Sun and Lee, 2018). Owners cannot look after many hotels that they have established and they require a person that has the skills and competence to efficiently operate business activities. This strategic option can be an effective one, if Hilton Hotel prefers to choose it, as the main management will be able to divide operations and focus on how they can all work together, so that profits are maximised(Claveria, Monte and Torra, 2015). However, these managers can leave their jobs without any notice and this can cause many issues for the organisation. Joint Ventures Joint venture is another strategic option which includes investments of 2 companies that come together and perform operational activities. This means that they share ownership, losses and profits that arise within the organisation. They have to mutually makes decisions that can affect the organisation. There are however, many risks present in joint ventures as conflicts can arise leading to may disputes between the owners(Falk, 2016). Hilton Hotel can opt for this strategic option, of they feel that it can help them in gaining success. With investments from various owners, they will be able to grow and expand in an efficient manner. This is only suitable for those organisations that have low funds and require more people to participate in the business(Sehitoglu, Ross and Köseoglu, 2017). When and if Hilton Hotel feels that they shortage of financial resources, they can choose this strategic option. Mergers and Acquisitions
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Mergers is a process in which owners of different organisations come together to become a single company, while acquisitions is done when one enterprise purchases the other and gains full ownership. This is done when a company's owner feels that they no longer want to manage their business and are ready to hand it over to someone else(Strobl and Kronenberg, 2016). This generally happens in the hospitality sector, when shareholders do not want to continue operations and there merge with another organisation, so that they can continue to serve customers. They already have established themselves and simply shutting down is not a good option(Harrington and et.al., 2014). Hilton Hotel can use this strategy to acquire a different organisation in which they see potential or can gain the opportunity to merge with another company, so that they are able to expand and grow. 2. Analysis of factors that affect strategy implementation of Hilton Hotel Hilton hotel has been successfully operating their business in the hospitality industry for many years but there are some factors that can impact them while implementing certain strategies that management has created(Claveria, Monte and Torra, 2015). It is important to analyse such factors, as it will enable them to achieve goals and objectives. Leadership Hilton Hotel has a management team that trains their leaders in such a way that they are able to guide and teach employees to effectively achieve organisational goals. It is important for leaders to meet and discuss strategical plans with managers, so that they can understand their roles and responsibilities(Gannon, Roper and Doherty, 2015). If leadership of an organisation is not proper, many problems can arise in the future. There are certain policies and programs that only leaders can understand and identify the types of strategies required for achieving goals (Harrington and et.al., 2014). Hospitality industry requires capable leadership, as employees need regular guidance to work in an efficient manner. Leaders also monitor performance to ascertain the work done, so that they can make changes in decisions and implement new ones. They have to communicate with employees and managers, which enables them prioritise objectives. Therefore, a good leadership system within an organisation can positively affect strategies that are to be implemented.Strategic HRM of Hiltonis a group of business and its main aim is to ensure that individual needs are easily met.Thus,because service quality is central to this, a policy of human resource initiative called “Esprit” has been developed that leads in embracing the key principles of employee recognition, respect and reward.
Structural design Structural design refers to the structure of the organisation in which different departments are made and tasks are delegated accordingly, so that goals can be achieved. This helps companies in effectively dividing areas and ensuring that there is flexibility among each department(Sehitoglu, Ross and Köseoglu, 2017). Hilton hotel has a formal organisational design and there are many departments within the organisation. They have created individual units in which managers and leaders are present. This includes the hotel line, where work regarding to bookings, room services and housekeeping are done. The restaurant department ensures that there is a systematic method of getting tasks done regarding to food, tables and other such services(Claveria, Monte and Torra, 2015). The structural design can have an impact on Hilton Hotel's strategies as their implementation can only be successful when a proper structural design is created and followed. An improper and ineffective organisational structure.Hotel Hilton follows hierarchical structure because it has massive size of business that mainly comprises13 brands serving 140 million guests in 2015 alone. This structure must be effective and designed properly because ineffectivity can cause many issues within the organisation and lead to decrease in profits. Information and control systems Information systems refersto a method that isused to evaluate performances of employees and resources that are used in an organisation. This program helps in monitoring and determining how effectively and efficiently work is done. Hilton Hotel has adopted proper strategies that are used for evaluation of management and this has helped them in continuously making improvements in the organisation(Evans, 2015). While control of information refers to procedures and policies that are adopted to ensure that data within the company is safe and properly utilised. It is important to keep data and information secure, so that there are minimum breaches. Therefore, Hilton Hotel can get severely affected if they are unable to create proper strategies and implement them(Sun and Lee, 2018). There are many issues that can arise due to inadequate strategies and this can lead to lack of achievement of goals.Hilton hotel develops OnQ Property Management System (PMS) that features room key coding, employee/staff schedulingandmanagement,wake-upcallscheduling,propertyownershipandrental information, work order tracking, maintenance management, and build portals to communicate with outside staff and ownership partners.
Human resources Human resources are the individuals that are present within an organisation that work towards achieving their goals. They are trained and skilled employees that are responsible for getting work done in an effective and efficient manner. Hilton Hotel has many human resources that they have recruited and selected competent individuals so that they all come together to optimally utilise available resources and bring out the best results(Greiner and et.al., 2014.). Human resources are an integral part of any organisation and they can impact implementation of certain strategies created by management. Employees may not always be in favour of new policies and strategies that are introduced and if they do not accept these plans, it can cause decrease in profits and overall revenues of the company(Claveria, Monte and Torra, 2015). Therefore, it is important to consult human resources, so that the organisation can unanimously make decisions that will be beneficial for themselves as well as their employees. 3. Analysis and evaluation of different performance metrics for Hilton Hotel HiltonHotelneedstoanalyseandevaluatetheirmanagementandorganisation performance so that they are able to ascertain how strategies can be made and implemented, along with ways to make improvements(Gannon, Roper and Doherty, 2015). Management will be able to make better decisions and opt different methods through which they can achieve goals. Given below are techniques that can be used to conduct an analysis and evaluate performance at Hilton Hotel. The balance scorecard Hilton Hotel regularly uses this method of evaluation by analysing different areas such as finance, customer, learning, growth and business process. They are able to identify areas of weaknesses, so that provisions can be made for improving their business functions(Phillips and Moutinho, 2014). Management uses this scorecard to collect data by calculating revenues of rooms and restaurants. They monitor this information and ascertain how much profits they have generated. They can also evaluate customer satisfaction by conducting surveys with the use of balance scorecard. This will help them in understanding what measures they have to adopt to ensure that they succeed and gain even more customers in the future(Gannon, Roper and Doherty, 2015). It will also aid Hilton Hotel in increasing their operational efficiency and effectiveness as well as stay ahead of the competition.
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Hospitalityindustryhastolookoutformaintenancecosts,qualityandother contingencies that may arise(Bertozzi, Ali and Gul, 2017). They can have a huge impact in the organisation and cause losses if not taken care of. Balance scorecard can help Hilton Hotel is evaluating quality of their hotel rooms and restaurants, so that they can create proper strategies that can be implemented by management. It will help them to maintain their properties and ascertainresourcesthatareneeded,whichcansignificantlyhelptheminachieving organisational goals(Chan and Hsu, 2016).Hilton has to maintain the balance between four critically important perspectives in their company that includes finance, customers, internal process and also people. They must look after all this factors that affects the growth of a company to a larger extent.Finally, this method of performance metrics can analyse learning and growth of employees, so that management can make decisions on the type of changes that are needed to ensure that workers perform tasks in an effective and efficient manner Critical success factors Critical success factors is considered to be an element, that is required in organisations as it helps in accomplishing targets and goals. This is a measurement technique that is used multiple times within the hospitality industry as it helps in effectively performing tasks and earning good revenues. It consists of different activities and procedures that are done, so that effective decisions can be made(Claveria, Monte and Torra, 2015). It also helps in creating high quality services for customers, which will allow organisations to attain success and stay ahead even in tough competitions. Hilton Hotel can adopt this method of performance metrics, as it can help them in understanding what techniques will be most suitable for creating and implementing strategies. This can significantly help them in expanding and growing their business as well. They will be able to maintain flexibility while managing work and attending to customers, which will lead to achievement of organisational goals(Strobl and Kronenberg, 2016). It also provides them a global outlook of how they can compete with other famous hotels and what strategies they can adopt so that maximisation of profits can be done.This factors will later helps in achieving high brand name and image and also location will be proved perfect due to this. The cited company will also have to manage the quality as per the requirements of customers. This will later leads in attracting large number of customers. Hilton also has to maintain their nature of flexibility to increase the customer loyal base. Key performance indicators
Key performance indicators is a method of measuring performance in a numerical manner, to ascertain whether or not, organisational goals are being achieved(Chan and Hsu, 2016).Companies will have to understand their goals and missions, customers and operations, so that they can create a standard through which evaluation can be done. Once they are aware about the organisational objectives, they can collect data and analyse them so that an outcome can be achieved(12 Essential KPIs for the Hospitality Industry,2018). This will help them to manage financial, employees performance and customer satisfaction within the organisation and use different methods through which goals can be met with. Hilton Hotel can use this method, so that they can enhance their overall performance in every department.They must also monitor and benchmark performance of different departments in hotel. Average room rate measure the average rate of the room available. Further, revenue per available room is a classic and also regarded as one that has the most important financial calculation for any hotel to see how much revenue they have made within a certain period of time. CONCLUSION This assignment can conclude that strategical planning is an integral part of any organisation, especially in the hospitality industry. Hilton Hotel is known for its exceptional services and properties all over the world. It is important for them to analyse certain strategic option so that they can choose best alternatives for ensuring success. They have used franchising as a method through which they can grow and expand. There are other ways, such as management contracts, joint ventures, mergers and acquisitions, which can be used by Hilton Hotel,iftheywanttoselectmoreeffectiveoptionsforgrowthanddevelopment.This organisation can be impacted by different factors, when management creates certain strategies. These include leadership, structural design, information and control systems as well as human resources. HiltonHotelcanusedifferentmethodsthroughwhichtheycanmeasuretheir organisation's performance and make necessary improvements. These include balance scorecard, that is most commonly used in the hospitality industry. It allows management to assess different aspects by gathering required information through the help of surveys that are conducted on a regular basis. They can also use key performance indicators to determine their areas of weaknesses and make required improvements, so that goals can be effectively achieved. Critical
success factors can also help Hilton Hotel in evaluating overall organisational performance and make proper decisions, so that they can continue to succeed in this industry.
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REFERENCES Books and Journals Bertozzi, F., Ali, C.M. and Gul, F.A., 2017. Porter’s five generic strategies; A case study from the hospitality industry.International Journal For Research In Mechanical & Civil Engineering (ISSN: 2208-2727).3(2). pp.09-23. Chan,E.S.andHsu,C.H.,2016.Environmentalmanagementresearchin hospitality.InternationalJournalofContemporaryHospitalityManagement.28(5). pp.886-923. Claveria, O., Monte, E. and Torra, S., 2015. A new forecasting approach for the hospitality industry.InternationalJournalofContemporaryHospitalityManagement.27(7). pp.1520-1538. Evans, N., 2015.Strategic management for tourism, hospitality and events. Routledge. Falk,M.,2016.Agravitymodelofforeigndirectinvestmentinthehospitality industry.Tourism Management.55.pp.225-237. Gannon, J.M., Roper, A. and Doherty, L., 2015. Strategic human resource management: Insightsfromtheinternationalhotelindustry.InternationalJournalofHospitality Management.47.pp.65-75. Greiner, R. and etla.., 2014. Scenario modelling to support industry strategic planning and decision making.Environmental Modelling & Software.55.pp.120-131. J. Harrington, R. and et.al., 2014. Strategic management research in hospitality and tourism: past,presentandfuture.InternationalJournalofContemporaryHospitality Management.26(5). pp.778-808. Lopes, M., 2016.The hospitality industry(Doctoral dissertation). Phillips, P. and Moutinho, L., 2014. Critical review of strategic planning research in hospitality and tourism.Annals of Tourism Research.48.pp.96-120. Sehitoglu, Y., Ross, G. and Köseoglu, M.A., 2017. Business ethics research in the hospitality industry: topics, methods and trends.International Journal of Bibliometrics in Business and Management.1(1). pp.80-96. Strobl, A. and Kronenberg, C., 2016. Entrepreneurial networks across the business life cycle: the case of Alpine hospitality entrepreneurs.International Journal of Contemporary Hospitality Management.28(6). pp.1177-1203.
Sun, K.A. and Lee, S., 2018. Effects of franchising on industry competition: The moderating role of the hospitality industry.International Journal of Hospitality Management.68. pp.80-88. Online 12EssentialKPIsfortheHospitalityIndustry.2018.[Online].Availablethrough: <https://www.verdant.co/blog/12-essential-kpis-hospitality-industry/> StrategicPlanning.2018.[Online].Availablethrough: <https://searchcio.techtarget.com/definition/strategic-planning>