Hospitality Industry Trends and Challenges

The assignment provided is an analysis of the hospitality industry, focusing on trends, challenges, and research directions. It draws from various studies and articles in the field, including works by Fong, Law, and Yap (2016), Jauhari and Bharwani (2017), and Kim et al. (2015). The analysis also considers online booking systems and customer loyalty in the hospitality industry. It is suitable for publication on Desklib, a platform that provides past papers and solved assignments for students.

The Contemporary
Hospitality Industry

Table of Contents
INTRODUCTION...........................................................................................................................1
Business Planning Report................................................................................................................1
1) Presenting the PESTLE analysis of Hilton.............................................................................1
2) Describing SWOT analysis of Hilton.....................................................................................3
Market Research Report..................................................................................................................4
1) Presenting the potential and current trends in hospitality industry'........................................4
2) Evaluating the ability of hotel to meet out the current trends.................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Hospitality industry is a broad category in the service industry that includes lodging,
event planning and accommodation. It shares its biggest contribution to the growth of economy.
The report main aim is to understand some factors that may affect the business and some recent
changes which are adopted by the hospitality industry. The chosen hotel for this report is Hilton
which is top and leading hotel in UK and provide best services to their customers such as resorts,
hotels, restaurants etc. The hotel serves its unit worldwide and have more than 5000 properties.
Report presents some external as well as internal factors that affect Hilton by using PESTLE and
SWOT analysis. Further it describes recent or current trends which are used in hospitality
industry and then evaluating the ability of a Hilton in order to meet out all the current trends.
Business Planning Report
1) Presenting the PESTLE analysis of Hilton
PESTLE analysis is strategic tool that helps a business to understand what external
factors are affect the business's position. This analysis basically monitor the macro
environmental factors which creates impact upon the business. It consists of many factors which
are as mentioned below:
Political Factor: This factor is directly creates impact upon the business and may even
affect the business externally. Political stability is the basic requirement for the success of an
industry. It has been analysed that in hotel industry, political factors directly influence the
number of visitors, tourist and business travellers in direct as well as indirect ways. For example,
because of unstable political situation, Northern Ireland also discourage the visitors because of
their safety concern. Risk of threat and act of terrorism is the basic political fluctuation in UK as
it reduces the number of tourist to visit and as a result, it creates negative impact upon the Hilton
performance (Jauhari and Bharwani, 2017).
Though company spends lot of money in order to stable the political situation. Apart
from this, the sudden increase in tax rate also affect the business in negative way because it
increases the cost of offered services and tourist are not ready to spend amount on it. Thus, it is
quite necessary to cope up with this political factor.
Economic Factor: National as well as international economy directly affect the
performance of Hilton. For example, at the time of Olympics in UK, almost all the hotels are
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occupied and booked so that it helps to raise the profit level of Hilton as well as. But after it the
situation is completely adverse. Beside this, at the time of financial crisis between 2007 to 2009,
many hotels sales are went down up to 20% and profit by 40 percent (PESTLE Analysis of
Hilton, 2019). It took around five years to stable the economy and after that the situation is under
control. Thus, it shows that it is quite necessary to have stable economy of the country because it
directly affects the business financial performance. In addition to this, when the inflation rates is
high because of some financial crisis, tourist did not prefer to go out because they have to spend
extra and at that time also, Hilton faces challenges because the sales of the firm slows down.
Social Factor: Society's culture directly impact upon the business performance. Even
shared beliefs and the attitudes of the peoples also plays a great role and it is quite necessary for
the Hilton to understand their customers needs and then provide the services accordingly (Kim,
Vogt and Knutson, 2015). It has been further analysed that the customers preferences are also
shifts towards travelling and this creates direct impact upon Hilton performance. Further, the
hotel also operates its unit at global level and also offered the services as per the needs of their
customers. Even, Hilton also contributes the revenues to the Hilton Community Foundation
which serves the society and also adding more values to their social responsibility.
Technological Factor: This factor also affect the business overall performance such that
Hilton also uses advance technology into their working area such that recently the firm open new
online application for their customers for their convenience (Kandampully, Zhang and Bilgihan,
2015). The app also offer browsing for room availability, booking and paying. As the firm also
operates its unit in more than 78 countries and also offer many businessmen to uses advance
technology such as Hilton also offer some loyalty programs and many visitors can easily earn
points and then receive awards. Apart from this, company also use artificial intelligence such as
uses robots and chat bots which helps to convince more number of potential customers for
booking. Thus, this advance technology is adding to the differentiated customers experience and
increases the revenue.
Legal Factor: In foreign country, recently the travel is ban in certain middle Eastern and
African countries which have reduce the inbound travel that creates direct impact upon the
business and the same effect is done on Hilton, as it reduces its 17 percent sales. Hence, it is
quite necessary for the firm to keep comply with all the legal laws which may direct affect the
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business such as employment law, Health and safety law, Discrimination law etc (Penela, Morais
and Gregory, 2019).
Environmental Factor: It is quite necessary for the firm to contribute to the
environment and many hotels are also contributed their considerable amount towards the carbon
emission regarding global warming. In the same way, Hilton also implement tight regulations in
order to decreases their carbon footprints so that it will help to increase the level of operational
cost. It also implements strategy in order to decreases the pollution level and uses sustainability
act to protect their environment.
2) Describing SWOT analysis of Hilton
SWOT analysis is another strategic tool that is used in order to identify firm strength and
weaknesses, opportunity and threat which are as mentioned below:
Strength: The hotel has high brand recognition in the market as It operates its unit in
more than 80 countries. Because of large scope of their business operations, the company also
benefits from the economies of scale and create further growth of their business (Riley, 2019).
The firm also perform well when enter into new market such that the expansion helps a business
to generate more revenue. Hilton also innovate new products and services in order to attract new
customers and it also has built a reliable distribution network which also reach majority of its
potential market. In addition to this, it also has high level of the customer satisfaction and
through their dedicated customer relationship management department, firm is able to achieve
high level of brand equity in market. Hilton also have good employee retention and good
reputation in market.
Weaknesses: Hilton is overdependent upon the US market because its more than half of
the revenue is generated from US and only some amount of revenue is collected from other
market. High level of debt is another point of weaknesses for Hilton. It has been analysed that at
outside market, the Hilton success is not up to the mark. Beside this, the day inventory which is
maintained by the Hilton is quite high as compared to its rivals and the financial planning of
Hilton is not done properly and efficiently and as a result, the net cash flow is fluctuating and
then the financial performance is affected. The investment in research and development
department is also below the fastest growing players in an industry. Therefore, it has been not
able to compete with all leading players (Singh, 2019).
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Opportunity: By using advance technology and make a firm digitalisation will provide
an opportunity in order to expand a business at further level of success. It has been realised that
expand a business in India will help to generate more revenue. New customers from online
channel is another opportunity for the Hilton in order to generate more revenue because investing
more in online platform is the biggest advantage for the firm to raise its sales. In addition to this,
low inflation rate also brings more stability in a market and as a result, it also enables credit at
lower interest rate. Even new technology also provides an opportunity to Hilton to differentiates
pricing strategy in a new market. Thus, it helps a business to maintain their loyal customers by
providing best services to them.
Threats: As the company is operated in many countries therefore, it has a threat of
currency fluctuation which may cause negative impact upon business. The company also faces
threat because of new environment regulations in their existing products. Because of demand of
highly profitable products is seasonal in nature, Hilton also faces threats due to short term
medium term (Martin-Rios and Ciobanu, 2019). As it faces tough competition with its rival firms
and it has been analysed that the firm has to take best pricing decision in order to attract higher
number of customers towards them. Every country has their own laws and liability laws and as it
also operates its unit in many country, hence it may be exposed to various liability claims in their
existing policies. Thus, Hilton also have threat of terrorism and political instability which may
affect the decision power of the company.
Market Research Report
1) Presenting the potential and current trends in hospitality industry'
As hospitality industry shares their highest contribution in the growth of economy.
Therefore, it is all done because of adopting new strategy which help a business to creates
positive impact and helps to raise the profitability of the firm. In recent years, there are lot of
changes are adopted by the firm and it also help in positive way. Some of the changes are as
mentioned below:
Technology: It is one of the most emerging trend which is used by the hospitality
industry. Such as many hotels are uses biometrics to usher in new age of seamless authentication
and thus it will benefited the hotel processes as well as customer purchase. As technology always
keeps a track of the comfort and the choices (Top new trend in hospitality industry, 2019). In
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addition to this, there are many hotels such as Marriott which actually used finger print and face
recognition technology in order to unlock or lock the rooms. Thus it shows that the seamless
technology is quite convenient for the customers.
Direct Booking: It is another biggest emerging trend in Hospitality industry. Such that
peoples are now uses book their travel package and hotel rooms online through an application.
On the other side, many customers make direct booking through some travel agencies as well
and they also take a reasonable percentage of commission from the hotels. But it is considered a
good and convenient trend for the customers to book their rooms without going here and there.
Beside this, hospital industry also uses social media and other promotional tools in order to let
people know about new services which are provided by the hotels (Fong, Law and Yap, 2016).
For example, Hilton also uses Facebook and its website and keep update regarding their new
offers which help their customers to take advantage of this.
Chatbots and Artificial intelligence: in this modern era, now customers are expected to
be able to interact directly with the hospitality industry using variety of digital channels so that
they provide rapid responses. As it is not possible to answer all the questions by staff, therefore
chatbots are able to understand the simple questions and also provide answers immediately
without any burden from the customer service staff. In this way, the customers experience also
improve and it helps to provide better services (Ryan, 2015).
Apart from this, hospital industry now uses robots in order to provide information to their
customers. Such as there are many robots which are being deployed in some airports for security
reasons and on the other side in Henn-na Hotel in Japan where first robot is being used as front
desk staff in order to provide information to their customers. This new trend is actually prefer by
almost people.
Seamless technology: it is another advance technology, such that seamless connectivity
across platforms and devices are growing more important. Even in many country, there are many
hotels groups who offer mobile check- in and some digital caretaker services. For example, at
Aria Resort and Casino in Las Vegas, all the guest are issued a high- tech cards that actually
detects their presence and even unlock the door before they even reach it (Jones, Hillier and
Comfort, 2016). This advance technology helps an industry to keep sustain their brand image in
market and attract large mass of groups towards them.
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Sustainability rules: There are many hotels and companies which are actually work to
protect their environment from pollution. Such that many eco- practices are becoming the norm
thus, they are focus on renewable energy resources as well as water scarcity. For example, many
hotels are also installing solar panels and also update system in such a way that if the guest leave
the rooms then air conditioner and lights are automatically off. In this way, many hotels are
actually helped and take some steps in order to keep protecting their environment.
2) Evaluating the ability of hotel to meet out the current trends
Hilton is also uses many new and advance technology in order to meet out the demands
of their customers. Such that recently the hotel also uses robots which uses speech recognition
and AI in order to respond to some queries from their customers and intelligently learn from their
interactions. This advance technology is also helpful a business to sustain company's brand
image in market. As the firm is also kept providing innovative services to their customers in
order to attract wide range of customers towards them. Being a brand image in market, the
company also uses its own website and social media and keep posting about new trends which
are adopted by the Hilton so that people will let know about new trend. Posting online about new
services is consider one of the most effective way which help a business to increases its sales
(Radojevic, Stanisic and Stanic, 2015). Hilton also makes booking online for their customers
convenience and even uses Facebook and Twitter to keep interact with their customers and
realizes their needs in better way and then implement those into the working area.
Hilton also uses Internet of things (IoT) in which all the details are mentioned on their
websites. These devices can easily collect the data and communicate over the internet so that the
people will easily know new offers provided by the customers. Beside this, Hilton also uses
some advance technology such that a finger print technology that helps to look and unlock the
door and in that case no key is provided to the guest. Therefore, this advance technology helps to
provide better customer services to their guest and also aid to sustain its brand image in market.
Hilton also provide different discount offers to their customers occasionally which attract large
mass of customers towards them. Even it also deals with many travel agency on commission
basis so that it will easily make booking and then Hotel provide better experience to their guest.
Beside this, Hilton have unique perks such as resorts, spa and theme parks which help
many customers to provide better experience and relax themselves. They also provide the best
quality of services in order to meet out the demands of their customers. On special occasions,
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Hilton also offer free wine tastings in their lobbies and bars so that guest feel special inside hotel.
It also provide free wi-fi and housekeeping services on the demand immediately so that it will
help a person to visit again and again because of the best customer services (Schuckert, Liu and
Law, 2015). In this way, Hilton easily meet out the demands of their customers and provide best
experience because of high and affordable services.
CONCLUSION
By summing up above report, it has been concluded that hospitality industry contributed
the biggest part in their economy and Hilton is one of the top leading hotel which is also affected
by the external as well as internal factors. As report concluded that Hilton hotel have to make
many strategies in order to cope up with different factors that may affect the business in negative
way. Further report also concluded that hospitality industry also uses variety of new technologies
in order to attract wide range of customers and in the same way, Hilton is also uses robots and
online booking system in order to attract wide range of customers to meet out their demands.
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REFERENCES
Books and Journals
Fong, L. H. N., Law, R. and Yap, M. H. T., 2016. Experimental research in hospitality and
tourism: a critical review. International Journal of Contemporary Hospitality
Management.28(2). pp.246-266.
Jauhari, V. and Bharwani, S., 2017. An exploratory study of competencies required to cocreate
memorable customer experiences in the hospitality industry. In Hospitality Marketing
and Consumer Behavior (pp. 159-185).
Jones, P., Hillier, D. and Comfort, D., 2016. Sustainability in the hospitality industry: Some
personal reflections on corporate challenges and research agendas. International Journal
of Contemporary Hospitality Management.28(1). pp.36-67.
Kandampully, J., Zhang, T. and Bilgihan, A., 2015. Customer loyalty: a review and future
directions with a special focus on the hospitality industry. International Journal of
Contemporary Hospitality Management.27(3). pp.379-414.
Kim, M., Vogt, C. A. and Knutson, B. J., 2015. Relationships among customer satisfaction,
delight, and loyalty in the hospitality industry. Journal of Hospitality & Tourism
Research.39(2). pp.170-197.
Martin-Rios, C. and Ciobanu, T., 2019. Hospitality innovation strategies: An analysis of success
factors and challenges. Tourism Management. 70. pp.218-229.
Penela, D., Morais, A. I. and Gregory, A., 2019. An analytical inquiry on timeshare research: A
continuously growing segment in the hospitality industry. International Journal of
Hospitality Management.76. pp.132-151.
Radojevic, T., Stanisic, N. and Stanic, N., 2015. Ensuring positive feedback: Factors that
influence customer satisfaction in the contemporary hospitality industry. Tourism
Management. 51. pp.13-21.
Riley, M., 2019. Managing People in the Hospitality Industry. Routledge.
Ryan, C., 2015. Trends in hospitality management research: a personal reflection. International
Journal of Contemporary Hospitality Management.27(3). pp.340-361.
Schuckert, M., Liu, X. and Law, R., 2015. Hospitality and tourism online reviews: Recent trends
and future directions. Journal of Travel & Tourism Marketing.32(5). pp.608-621.
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Singh, J., 2019. Study of relation between CSR and employee engagement in hotel industry.
In Corporate Social Responsibility: Concepts, Methodologies, Tools, and
Applications (pp. 1243-1249). IGI Global.
Online
PESTLE Analysis of Hilton. 2019. [Online]. Available
through:<https://www.swotandpestle.com/hilton-worldwide-holdings-inc/>.
Top new trend in hospitality industry. 2019. [Online]. Available
through:<https://www.smartmeetings.com/news/trends/74256/top-10-trends-impacting-
hospitality-industry>.
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