Hospitality Business Environment: A Case Study of Hilton Hotel

This report provides a comprehensive analysis of Hilton Hotel's business environment within the hospitality sector. It employs several analytical frameworks, including SWOT, PESTLE, and Porter's Five Forces, to evaluate both internal and external factors influencing the company's operations and strategic positioning. The SWOT analysis identifies Hilton's strengths, weaknesses, opportunities, and threats, while the PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors impacting the business. Porter's Five Forces model assesses the competitive intensity and attractiveness of the hospitality industry, considering competitive rivalry, bargaining power of customers and suppliers, the threat of new entrants, and the threat of substitute products or services. The analysis aims to provide insights into Hilton Hotel's current market situation and potential strategies for achieving a sustainable competitive advantage. This document is available on Desklib, a platform offering a range of study tools and resources for students.

Business Environment in
Hospitality Sector

Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY ..................................................................................................................................1
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business organisation is mostly engaged in production of goods and services. While
many firms Exclusively manufacture items, others solely supply services, and yet others provide
both commodities and services. Computers, food, and clothing are examples of tangible goods
that may be used and kept. Services, on the other hand, are intangible behaviours that cannot be
kept, such as haircuts, train rides, hospitality and internet access. Business environment includes
two aspects such as internal and external factors which influences the overall operations of the
company. Internal factors includes employees, quality of services, distribution channels, finance
and many more. External factors includes many macro environmental factors such technology,
laws, economic conditions, culture, political condition and many which impacted directly or
indirectly. For the sake of this project, the selected organisation is Hilton Hotel. It I an American
international Hospitality company which was founded in 1919 by Conrad Hilton to provide
hospitality services across the world.
This report highlights and undertake a comprehensive analysis of Hilton Hotel's business
environment. PESTEL and SWOT evaluations of the organisation's internal as well as external
environments will be conducted in order to achieve desired goals. Further, this report covers the
Porter's five forces of the hospitality industry in order to understand the current market situation
better.
MAIN BODY
SWOT Analysis refers to the most effective business analytical tool which allows
organisations to determine their internal performances as well as external operations and
activities in order to gain competitive benefits over competitors.
Hilton Hotel is very most famous organisation tourism addition to hospitality Industry.
Hilton Hotel's SWOT analysis studies the strengths, weaknesses, opportunities, and threats to
determine the achievement and failures as well as possibilities for future growth (Lakatos and
Arsenopoulos, 2019). Internal factors are strengths along with weaknesses in the Hilton Hotels
SWOT Analysis, moreover, external factors consist opportunities along with threats.
Strengths of Hilton Hotel are Hilton Hotel is most popular brand and have good
reputation in market. Continuous betterment of business organization processes as well as
technological innovations to enhance experiences of customers. A favourable or higher rate of

employees retention. Hilton has more than 500 properties in many countries. They has been
operated their business from long run and achieve great success in the hospitality industry. As
well as Positive image and loyal customer base in international market.
Weaknesses of Hilton Hotel are Hilton Hotel have huge brand value but has low market
share in target market. Government policies and rules of different countries are affected the
operations and profitability of company (Penela, Morais and Gregory, 2019). Opportunities for
Hilton Hotel are Future advance technological market have a lot of opportunities for company to
grow. Profitable innovation in customer services,Effective advance or new technology utilisation
as well as digitization and UK and global hospitality industries are experiencing a boom.
Threats to Hilton Hotel are The presence of several international brands, addition to
long-standing or well settled UK brands (Fonseca, 2018). Competitive price policy and strategy
of competitors, Development stagnation and Several nations are experiencing political as well as
economic turmoil .
PESTLE analysis refers to business analytical framework which helps management to
determine the impact of various macro factors on their business operations as well as how can
they run their company in competitive world. It includes six factors such political, economic,
social, technology, legal and environmental which has great effect on company' profitability. The
manager of Hilton Hotel can determine the positive and negative impact of these aspects on their
new expansion strategy in UK market. The PESTLE analysis in context to Hilton Hotel are
shown below-
Political, It includes political norms, government rules and regulation as well as practices
of political party (George, 2021). IN UK, political condition are stable addition to political parties
provide various funding opportunities in COVID to promote hospitality sector in all over the
world. Entrepreneur of Hilton Hotel can grab this opportunity and use the funds to expand their
business in UK by bring some innovation in their hospitality services .
Economic, This factor includes bank rates, income level, inflation rate, credit rate,
population rate and many more in a country. In UK, lending rates are low comparatively other
countries as well as people income and inflation rate are also moderate which allow many
investors to invest in the profitable business in UK. Low cost loan are available and income level
of people are also good so the management of Hilton Hotel can grab this opportunity to expand
their business in new market and attract many investors to invest in their innovation.

Social,In UK, sociological factors includes demography, population growth, customer
lifestyle, preferences, tradition and many more which have great impact on profitability of hotel.
Spending habits of people are rise in UK as well as their lifestyle are also improved which can be
beneficial for hospitality company to grow their business (Hansen, 2022). But After COVID
people are more conscious about health and prefer to stay home in order to social gathering. So it
can be risky for Hilton Hotel to expand their business in UK, thus they have to wait till the
condition become normal.
Technological, It is related with the new and advance technology available in the country.
In UK, technology are improving constantly which allow businesses to earn competitive
advantage over competitors (Fill and Turnbull, 2019). So the entrepreneur Of Hilton Hotel can
use the digital marketing technology to spread awareness about their hospitality services in UK in
order to attract large number of customers and increase their experience for profitability.
Legal, It is related with various law , rules, regulation, tax policy and many more in a
nation. IN UK, government made many rules and regulation regarding customers right,
employment law, Equality Act 2010 and many more which every organisation have to follow to
conduct their business operation. In Hilton Hotel, management have to pay equal salary to their
employees under Equality Act 2010 in order to retain talented employees in their business which
increase their profitability and reduce operation cost.
Environmental, It is related with weather, climate condition, pollution, raw material and
government laws regarding wastage and pollution. In UK people are more conscious about
pollution, hygiene and how company degrade their garbage properly. Sudden climate change
have great impact on the operations and profitability of Hilton Hotel as well as customers attract
towards them who take various measures to protect environment from pollution which increase
reputation of business.
Porters Five Forces a business analytical tool which enable the management of Hilton
Hotel to determine the market condition in the hospitality industry to make effective strategy for
competitive advantages. Porters five forces in context to Hilton Hotel are as follows,
Competitive Rivalry, In hospitality industry, the impact of this factor id high due to many
companies and and competitive pricing policy (Sun and Lee, 2019). The management of Hilton
Hotel can make effective price policy and make their product different from other to earn
competitive advantage. Bargaining power of customers, Impact of this factor in hospitality

industry is high due to low switching cost and many hospitality organisation. For Hilton Hotel, it
is important to provide best quality of services in order to enhance customer experience and meet
their demand. Bargaining power of suppliers,In hospitality industry, the impact of this factor is
low due to low switching cost, less need of inputs and large number of suppliers are available. In
Hilton Hotel, the impact of this factor is low because they can easily switch from one supplier to
another for room equipments, raw material for food (Lin and Mattila, 2021). Threat from new
entrants, The impact of this factor in hospitality industry is high for new companies due to huge
capital requirement for innovation. But for Hilton Hotel, the impact of this factor is low because
of large scale operations, positive brand reputation and loyal customer base. Threat from
substitute, In hospitality industry, the impact of this factor is low due to difference in services
quality, product and innovation (Peters and Vellas, 2019). Hilton Hotel provides best quality
services with different innovation form long time and have positive image or customers base in
hospitality industry .
CONCLUSION
As per above presented information, it has been concluded that business organisation is a
company which produces products and services to meet their desired results and profitability.
There are various internal and external factor which has great impact on operations and
productivity of company. By using various frameworks such as SWOT analysis, manager of
company can determine their internal external strength. Further, they can also determine the
impact of external and micro environment factors in order to make effective strategies for the
growth of organisation. By using Porter Five forces they can analysis the current market situation
in their industry in order to gain competitive advantage for long run.

REFERENCES
Books and journals
Fill, C. and Turnbull, S., 2019. Marketing communications: touchpoints, sharing and disruption.
Pearson UK.
George, R., 2021. The Tourism and Hospitality Marketing Environment. In Marketing Tourism
and Hospitality (pp. 183-219). Palgrave Macmillan, Cham.
Hansen, M., 2022. Managing Safety, Security, and Risk at Visitor Attractions. In Managing
Visitor Attractions (pp. 179-195). Routledge.
Lakatos, E. and Arsenopoulos, A., 2019. Investigating EU financial instruments to tackle energy
poverty in households: A SWOT analysis. Energy Sources, Part B: Economics, Planning,
and Policy. 14(6). pp.235-253.
Lin, I.Y. and Mattila, A.S., 2021. The value of service robots from the hotel guest’s perspective:
A mixed-method approach. International Journal of Hospitality Management, 94,
p.102876.
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.
Peters, M. and Vellas, F., 2019. Globalisation, innovation, and tourism. In Handbook of
Globalisation and Tourism. Edward Elgar Publishing.
Sun, K.A. and Lee, S., 2019. Competitive advantages of franchising firms and the moderating
role of organizational characteristics: Evidence from the restaurant industry. International
Journal of Hospitality Management. 77. pp.281-289.