Analyzing Hilton's Business Expansion Potential in Greece using PESTLE

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Business Organisations and Environments in a Global Context

Table of Contents
Introduction................................................................................................................................3
Information on the Hilton Hotels...............................................................................................4
Discussion of Hospitality Industry.............................................................................................5
Application of PESTLE framework...........................................................................................8
Use and application of appropriate data and examples............................................................11
Conclusion................................................................................................................................13
Reference List..........................................................................................................................14

Introduction
Business expansion is the way through which an enterprise grows to multiple locations so
that the company is able to attain higher profits through growth in the number of customers.
The importance of business expansion in a global context is that it helps there be more
diversification and employment for the enterprise several locations, which were untapped.
For this study, Hilton hotel has been selected so that an investigation into its current business
position in Greece can be explored along with which, the various locations where the
company can expand will be determined (Hilton.com, 2019). The two areas, which have been
selected so that the company can expand there, are Panepistimiou Street and Ermou Street.
Ermou Street is famous for being a shopping hub and attracting consumers from all over the
world, on the other hand, Panepistimiou Street is known for the architectural gems that are
present in the area that draw in eyes from all over, as well.

Information on the Hilton Hotels
Hilton is a multinational chain of hotels that has over 570 branches in six continents, the
company focuses on giving a premium hotel experience to guests all over through better
design, comfort and amenities. The company has several features within the enterprise that
offer experiences such as high quality dining, breakfast in bed, brunches and other culinary
experiences. The company believes in providing impeccable customer service to the
consumers and it does this through timely contact and a friendly approach so that the
consumers feel a higher sense of connection with the enterprise. The company has annual
revenue of $9.140 billion as per 2017; this high revenue is generated through contentious
effort in the hospitality market.
The Hilton targets consumers from all over the world from different backgrounds and
strongly promotes racial diversity in the employee chain as well. This enables the company
to be highly inclusive in nature and have a higher ground when trying to attain globalization
in the market. The enterprise puts a very high emphasis on good pricing through which better
deals for the consumers can be created. This assists the consumers to get more benefit and
satisfaction. These deals has numerous perks such digital check in systems, unlimited wifi
service within the hotels, saving at least 2% on any transaction, point reward system through
which more offers can be availed. The company has several big celebrity names attached to
the company, one of the biggest being Anna Kendrick, who informs others clients above the
high-grade services that are present within the enterprise. With the high amount of revenue
the Hilton makes, it enables the organisation to contribute towards factors such as the
country’s GDP, NDP and others for the growth of Greece. The company has a market share
of 26.6% in the hospitality industry.
The company is currently limited in its reach when it comes to Greece; the enterprise has
enormous ability to increase its reach when it comes to expansion onto different locations.
Two of the locations in which the company can extent its branches are Panepistimiou Street
and Ermou Street. Both of these are premium locations that draw in consumers from all over
the world. While one location thrives on being a shopping hub and another strives on being a
cultural centre that has ancient buildings.

Discussion of Hospitality Industry
The hospitality industry for Greece has seen major vicissitudes in the past decade however;
current statistics shows the tourist demand in the country is all set to rise. This rise will be
due to real estate portfolio becoming less costly, non performing loans (NPL) becoming
easier for hotels to access and there being more asset management methods
(Hotelmanagement.net, 2018). It is currently easier for businesses to promote their
organisations to become recognized through means like this. Greece’s current Foreign Direct
Investment rate has increased by around 146.4 USD in the stock market in 2018 when
compared to the statistics of the last year (Ceicdata.com, 2019). With this high rate of FDI,
the new hotels that are present in Greece are able to raise more funds from the market that
enable the company to perform more business activities in Europe.
Figure 1: Greece’s Foreign Direct Investment impact on the Financial market
(Source: ceicdata.com)
When analyzing the FDI generated by Hospitality companies, the Bank of Greece proclaims
that there is direct inflow within the company from outside hotels amounting to a staggering
amount of €3,204 million (as indicated in the figure below). This amount has been the highest
FDI there has ever been within the company looking back at the country’s past performances.
This is good news for hotels like Hilton that enables them to establish fresh branches more
easily in new locations since there will be lesser compliances, which the company will have
to adhere to.

Figure 2: Foreign Direct Investment of Greece in the past 10 years
(Source: enterprisegreece.gov.gr)
Greece is currently ranked as the 7th most attractive countries for investment, falling behind
large countries such as Spain, Germany and others (News, 2019). This huge appeal comes
from the large amount of tourists the companies are able to draw into the country so that there
is more hospitality services that are being provided. Several famous places in Greece increase
the appeal of the country, which include locations such as Acropolis, Mykonos, Delphi and
others. These places have architectural marvels that highly detailed and pull customers from
all over the world increasing the number of hotel stays within the country and up lifting the
hotel industry.

Figure 3: Top investment attractive countries
(Source: argophilia.com)
At the current moment, The Greek Property Managers Association supports (PASIDA)
Greece’s hospitality industry for there to be better quality services within Greece. This
enables companies to ask for high prices through which more revenue comes into the country
(OECD, 2016). The people, that are present in Greece are highly rich in their cultural
background, this instils a deep sense of respectability on the people enabling them to perform
more judicially in their positions.

Application of PESTLE framework
PESTLE Analysis is a tool or framework used for the analysis of the macro-environmental
factors that can have a direct or indirect influence on a particular company (Fozer et al.,
2017). The analysis consists of the following six macro-environmental factors-
Figure-4: PESTLE Analysis
(Source: Created by the learner)
The PESTLE analysis on Hilton is explained as per the scenarios in Greece in the table
below-
Factors Impacts
Political Greece is facing some political issues regarding foreign travel as the Saudi
Arabian government increased the oil price. As a result, the travellers are
not coming regularly to visit Greece causing a negative impact on the hotel
and hospitality industries in Greece. This political influence adversely
affects the growth of Hilton. Moreover, due to the Brexit effect in the
European countries, different political parties became clueless and
directionless as they faced complications regarding their arrangement of
political campaigns, which affects the promotional purposes of the hotel
industry in Greece (Taggart and Szczerbiak, 2018).
Economical The major factor upon which the growth of Hilton depends is the
Economic structure of Greece. Greece is currently at the seventh position
in the list of nations in attracting foreign direct investors (FDI) according
to the recent statistics (Iamsiraroj, 2016). Therefore, there is always a
sustainable growth of the hotel industries in Greece. Hilton also uses
positive governmental policies in attracting the shareholders wisely to
achieve a competitive advantage and establish a brand name in the
PPoliticalEEconomicalSSocialTTechnologicalLLegalEEnvironmental

industry. However, being a European country, Greece has to face economic
instability due to the Brexit effect. The instability does not allow Hilton to
allocate a fixed room charge for the clients in all the seasons of a year. The
room charges go through ups and downs accordingly. The economic
structure of Greece also involves an irregular fluctuation in the interest and
tax rate set by the government. This irregularity can have an effect on the
Hilton’s ability to attract visitors.
Social The traditional social structure of Greece contains the diversion in classes
and genders. The caste system increases the complication in staff
employment in the hotel and hospitality industry. Moreover, they have few
female rights compared to the male. This back dated socio structure does
not allow the industry to have fair employment in terms of female staffs.
This social factor has a negative impact on Hilton as well (Stewart, 2016).
Technological Technology is the most vital aspect of the modern day industrial
competition market. Every hotel industry would like to incorporate modern
technologies in each hotel chain to have a competitive advantage over
others. Greece has been a developed country in term of science and its
technical applications from the past. Hence, there is always a survival issue
for the hotels present there in a competitive scenario. Hilton re designed
their check-in services by launching an innovative and smarter way of
using cards. The online booking system also allows visitors to save time
and cut the costs effectively. They also involved foreign direct investors
(FDI) in investing a mass amount of money on installing telephone masts
in the outlets located in a comparatively remote area like regions in Africa.
Moreover, in the outlets in Greece, the company is going to introduce the
latest three-dimension video conferencing system in the bedrooms to
attract famous and rich clients including celebrities (Yilmaz et al., 2015).
This will surely help them to earn brand values. Accordingly, the charges
will be higher for these exclusively designed rooms, and they can manage
to grab the international market by attracting more foreign travellers.
Legal Greece follows the basic governmental laws and regulations like the
Minimum Wage Act, Discrimination Act and Gender Equality Act. The
local hotel industry has to follow the legislation laws in order to maintain

the legal factors and get all possible governmental supports. According to
the National Minimum Wage (2019) in Greece, the minimum amount that
has to give to the employees is fixed at 683.8€ monthly, which implies a
minimum count of 8,206 Euros every year. The increase in wage rebuilt
the employee pay structures of Hilton, which implies that the company is
currently spending more amount of money. Now to adjust with this
condition, the hotel would like to increase its room fares and other
servicing costs in order to gain profit after making up the losses (Adema et
al., 2018).
Environmental Environmental issues are one of the most major problems in modern
industries. Moreover, the extinction of natural resources causes a rise in
energy prices in Greece. The electric bill ratings also increased
accordingly, which raises the hotel fares and room booking charges. Many
foreign travellers got distracted. Hilton coped up with this problem and
incorporated eco- friendly and energy saving modes of systems which
includes pollution-free solar panels and wind turbines. Still, this
incorporation requires a big amount of investment. The hotel company
managed to sign deals with foreign direct investors (FDI). Moreover, the
hotel also started using pollution-free kitchen chimneys, refrigerators and
air conditioning systems with the help of funds provided by the
shareholders (Yataganas and Papagiannidis, 2019).
Table-1: PESTLE Analysis on Hilton
(Source: Created by the learner)

Use and application of appropriate data and examples
Hilton is a well renowned multinational hotel chain in Greece. The positioning of the hotel
gave the company plenty of opportunities to grab international customers as it is located near
the international airport. Moreover, they are going to open two new hotel outlets in Ermou
Street, Athens and in Panepistimiou Street respectively. The reason for opening the new
branch in Ermou Street is that the street in Greece is mainly famous as a shopping street,
where many local, as well as foreign customers, visit to shop in the international market.
Hence, the company will definitely earn a profitable amount in a competitive position. The
other branch, such as in Panepistimiou Street, the visitors are supposed to get attracted by the
architectural beauty and the presence of some important local sectors. Also, the presence of
Bank of Greece, National library, Attica Department and Numismatic Museum in the street
enhances the chances of engaging more local people in the hotel, which is considered as a
positive commercial perspective in business terms.
After studying the PESTLE analysis on Hilton, the future scope of the company in terms of
business expansion in the previous two said outlets can be framed out analytically. The
Brexit effect in European countries has an adverse impact on the Hilton due to its
economical and political irregularity. This uneven effect also hampers the online booking
feature of the hotel industry. The increase in oil charges set by the Saudi Arabian government
also decreases the success rate of the company as the transportation costs are major issues for
the hotel industries. Here, the contribution of foreign direct investment (FDI) is also very
vital. Greece is already nationally developed up to a certain limit in terms of the attracting
abilities of shareholders from foreign countries. The company’s brand value also helped in
attracting investors to invest in modern technology installations. The redesigning costs for
making the company to use pollution free and eco-friendly systems are aided by domestic and
foreign investors. This funding also helped the company to avoid the issues from the
pollution board in the context of global warming.
Greece is one of the most historical countries in the world. The caste system, sex
discrimination and other legal factors reflect their historic background. The Greek women got
a few scopes to empower themselves with compared to men, which is not a good sound in an
industrial perspective (Chrysafi et al., 2017). However, the business expansion of Hilton to
the other nations can avoid these restricted policies employed by the Greek government. The

continuous increase in minimum wage in recent years also has an economical impact on the
Greek hotel industries like Hilton. The room fares are regularly increasing to make up the
loss counts. This is a case where the hotels may lose a mass of local customers, who cannot
afford the booking charges. This particular problem inspired the hotel authorities to make a
large scale of choices to the clients so that they can avail the best affordable rooms for their
own needs. This feature of providing options to the clients integrated the installation of
modern technologies like the latest three-dimensional conference calling and wireless
telecommunication. Modern technologies increased the chances of attracting more business
companies by rearranging hall rooms for the purpose of board meetings and all. Here also lies
the importance of foreign direct investment (FDI) once again in the funding for installing
solar panels and wind turbines.
Finally, it can be concluded that the PESTEL analysis on Hilton has both positive and
negative impacts. However, if the company show more interest on the foreign direct
investment (FDI), it can increase its positive future scopes overcoming the negativities and
chances for growing the business globally (Koskinen et al., 2015).