Strategic Analysis of the Hospitality Industry: Hilton Hotel Report

This report provides a comprehensive analysis of the Hilton Hotel within the context of the contemporary hospitality industry. It begins with an introduction to the hospitality sector and then proceeds with a detailed PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors influencing Hilton's operations. Following this, a SWOT analysis is presented, outlining the hotel's strengths, weaknesses, opportunities, and threats. The report then shifts to an examination of current and potential trends in the hospitality industry, such as wellness and spa hotels, boutique hotels, online booking, and the use of chatbots and robotics. The report evaluates Hilton's ability to adapt and develop products and services to meet these evolving trends, concluding with a summary of the key findings and strategic implications. The analysis is supported by references to academic literature and online sources, offering a well-rounded perspective on Hilton's strategic position and future prospects in the dynamic hospitality market. The report highlights the importance of understanding external factors and internal capabilities for effective decision-making and sustained success.

THE CONTEMPORARY
HOSPITALITY INDUSTRY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. PESTLE analysis of Hilton Hotel...........................................................................................1
2. SWOT analysis of Hilton Hotel ............................................................................................3
TASK 2............................................................................................................................................5
1. Trend analysis of hospitality industry ..................................................................................5
2. Evaluation of ability of Hilton to develop products and services to meet current trend........6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Hospitality industry include various sector which contains activities relating to
recreational, lodging, travel and tourism, Theme parks etc. This study will include Hilton hotel
for performing various task which is involved in hospitality industry and provide customers with
various services such as room service, food service etc. It is having a global presence with more
than 570 hotels. This study will provide PESTLE analysis to identify the factors affecting
development of organisations. Furthermore, it will undertake SWOT analysis for hospitality
business and the impact of this on decision – making process. Moreover, it will provide analysis
of current and potential trends in the hospitality industry.
TASK 1
1. PESTLE analysis of Hilton Hotel
Political factors: This is the factor which affect various operations of the organisation. It
includes political factors such as tax policies, changes in government policies, terrorism etc. This
factors have a great influence on the functioning of the Hilton hotel and this reduce the
profitability and performance of the organisation in this industry (Radojevic, Stanisic and Stanic,
2015). For example, increase in the tax rate will increase prices on the hotel bookings due to
which profitability of the hotel will be reduced as there be will be fewer customers which will be
attracted towards the hotels. Also, if there is political stability in the country which is good for
the hotel industry as there will be no changes in any factors which will be beneficial for Hilton.
Economic Factors: It considers factors such as unemployment rate, interest rate,
inflation rate, income of customers etc. This factors affect the business development and
operation due to which the profitability and market share of the firm is decreased. For example,
If there is decrease in the income level of the customers which will affect demands of the
services provided by Hilton hotel and thus there will be income for hotel (Kandampully, Zhang
and Bilgihan, 2015). Economic factors have a great impact on the operations of business which
hampers the growth and success of organisation. Moreover, if there is increase is inflation rate
which will affect the operation of Hilton negatively as it will increase prices of services offered
by hospitality industry which will affect development and operations of Hilton.
Social Factors: There are various social factors which affect the business that consist of
changes in taste and preferences of customers etc. which affect the development and operations
of Hilton (Ali, Amin and Cobanoglu, 2016). For example, if there are changes in customers’
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preference relating to services provided by Hotel will have negative impact on the activities
performed by Hilton. Also, UK is having the fastest growing population in Europe that result is
more potential customers for Hilton.
Technological factors: In this context, various technological changes which affect the
business operation consist of changes in technological tools etc. There are positive and negative
impact of these factors. It affects positively if the changes are adopted by Hilton and if not, it will
affect various operations performed by organisation negatively (Wang, 2016). Using phone and
internet for various promotional tools will help Hilton in increasing their customer base and
providing details to customers about various new services which are offered by Hotel to gain
their attraction.
Legal factors: There are various laws and regulation which Hilton hotel have to comply
that consist of employment law, consumer protection law etc. Due to employment law it has to
train the staff effectively which leads to more investment in money and time. Legal factors
affect the operation of Hilton hotel as it has to comply with laws and legislation made by
government for the employees and customers to protect them.
Environmental factor: It includes factors which affect various activities performed by
hospitality industry. The environmental factors which affect the Hilton hotel includes changes in
the climatic conditions etc. These factors affect the preference of customers to visit the particular
hotel due to which it hampers the working of various operations performed by Hilton.
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2. SWOT analysis of Hilton Hotel
SWOT analysis provide understanding about the strength, weakness, opportunity and
threats of the business.
Strength: Hilton hotel have various strength which assist the organisation in increasing
its profitability and improve its brand image in the market. The strength of Hilton includes its
extensive experience and a vast scope of its business. It also has effective customer retention
schemes. Furthermore, it has strong brand image in the market which helps in attracting
customers towards the organisation. It has high level of service customisation which is achieved
due to technological integration. Moreover, it has good employee retention power which helps in
satisfying their employees to perform their best to increase the profitability of hotel.
Weakness: Hilton hotel have various weakness which affect the profitability of
organisation that includes high dependency on US market due to which other market are not
considered. It has limited market share despite its large brand name. There are various operations
of Hilton which are affected globally due to different government policies. Furthermore, it has
lack of flexibility due to its large size.
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Illustration 1: PESTLE analysis
(Source: Scanning the Environment: PESTLE Analysis, 2016)

Opportunities: There are various opportunities lying ahead for Hilton that includes
Global market expansion that will increase their customer base and it will be able to provide its
services to different people of different countries. Furthermore, it can provide customer service
with various innovative ideas which will help the organisation in provide high level of
satisfaction to customer by improving their service quality.
Threats: There are various threats which may affect various operation of the organisation
that leads to underperformance of hotel in hospitality industry. These factors include entry of
international brands in the market which will influence the various activities of organisation.
Moreover, it includes threat of political instability which can leads to changes in government
policies etc. Hilton hotel can be affected by threat of changes in customer preference in relation
to the services provide by Hotel.
These factors can inform the decision – making process of Hilton hotel as by making the
SWOT analysis the firm is able to identify its strength, weakness, opportunities and threats
which will helps the Hotel in grabbing the opportunities lying ahead. It also helps Hilton is
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Illustration 2: SWOT analysis
(Source: SWOT Analysis: Theory, 2018)

making decision about formulating various strategies which will help in reducing their weakness
and increasing their strength for future profitability.
TASK 2
1. Trend analysis of hospitality industry
Trend analysis include the current and future trend which impact the profitability and
market share of this industry.
Current and potential trend in industry includes the following: Wellness and Spa hotels: It includes providing relaxation top the guests staying at hotel
by providing them spa services. This trend provides face and body care, health promotion
by various wellness and spa methods etc. The wellness and Spa hotel will provide
information to the customers about luxury services that the industry is providing which
will industry in increasing their market share by attracting more customers through these
services. Boutique hotels: This trend is increasing in the market of hospitality industry and
includes decorated interior, specially designed rooms, excellent range of food and
beverages etc. With the increase in this trend the hospitality industry will attract more
customers towards organisation that assist in enhancing profitability of Industry. Online search and booking: This trend in the hospitality industry is gaining popularity in
which it provides customers of hospitality industry to book for various services provide
by industry through internet (Wang, Tsai and Tsai, 2014). It will help the industry in
attracting more customers and providing information about various services offered by
Industry.
 Chatbots and Robotics: This is the continuing and potential trend in the hospitality
industry. Chatbots helps the organisation in improving the services and save time.
Chatbots helps to increase communication by providing quick answers to the queries
presented by customers. Robotics is the potential trend which will helps the industry in
improving their service quality which will attract more customers towards industry.
Robotics will help the organisation in identifying their customer preferences to provide
them better service.
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2. Evaluation of ability of Hilton to develop products and services to meet current trend
Hilton hotel in order to meet its current trend is developing itsproducts and services
according to market trend which is helping the firm in gaining more market share and increasing
their profitability. Hilton is providing Spa and wellness services to the hotel guest for improving
their customer service and providing their customers with better experience at hotel.By providing
this service hotel is increasing their customer base and is gaining more customer attraction (Kim,
Vogt and Knutson, 2015). Also, to provide the customers with easy booking and providing
information about various services offered at hotel it has provided the customers with facility of
online search and booking through which the customers will be easily able to book their rooms at
the hotel website and can identify any offers and discounts available at hotel.
Hilton in order to solve various queries of their guest is making use of chatbots which is
helping the hotel in providing quick response to their customers about their various queries
relating to hotel services.
CONCLUSION
From the above study it has been concluded about hospitality industry which includes
various sectors such as hotel, travel and tourism, restaurants, theme parks etc. This study has
included the Hilton hotel and provided with various strength, weakness, opportunities and threats
of this hotel to make decision to reduce the impact of weakness and threat by increasing the
strength and opportunities. Furthermore, it has included PESTLE analysis to identify the impact
of factors such as political, economic, social, technological etc. to make changes accordingly that
has helped the organisation in reducing the negative impact of these factors.
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REFERENCES
Books and Journals
Ali, F., Amin, M. and Cobanoglu, C., 2016. An integrated model of service experience,
emotions, satisfaction, and price acceptance: an empirical analysis in the Chinese
hospitality industry. Journal of Hospitality Marketing & Management. 25(4). pp .449-475.
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.
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.
Wang, C. J., 2016. Does leader-member exchange enhance performance in the hospitality
industry? The mediating roles of task motivation and creativity. International Journal of
Contemporary Hospitality Management. 28(5). pp.969-987.
Wang, C. J., Tsai, H. T. and Tsai, M. T., 2014. Linking transformational leadership and
employee creativity in the hospitality industry: The influences of creative role identity,
creative self-efficacy, and job complexity. Tourism Management. 40. pp.79-89.
ONLINE
Scanning the Environment: PESTLE Analysis. 2016. [Online]. Available through
<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>.
SWOT Analysis: Theory. 2018. [Online]. Available through
<https://research-methodology.net/theory/strategy/swot-analysis/>.
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