Business and Business Environment: Hilton Hotel PESTLE Analysis Report

This report conducts a PESTLE analysis of Hilton Hotel, examining the influence of political, economic, social, technological, legal, and environmental factors on its operations. It explores both the positive and negative impacts of these macro-environmental elements, highlighting how government policies, economic conditions, social trends, technological advancements, legal frameworks, and environmental considerations affect Hilton's performance. The report also applies Porter's Five Forces model to assess the competitive landscape, including the extent of rivalry, bargaining power of suppliers and buyers, threats of substitutes and new entrants, thereby providing insights into Hilton's strategic positioning and competitive advantages within the hotel industry. The analysis considers factors like political stability, economic fluctuations, consumer demographics, technological integration, legal compliance, and environmental sustainability, offering a comprehensive overview of the challenges and opportunities facing Hilton in its global business environment.

Business and Business
Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
P4. PESTLE analysis of Hilton hotel and its positive and negative impacts.........................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment includes various macro-environmental factors which affect the
working of hotels. Macro-environment includes political, economic, social, technological, legal
and environmental factors. These factors are out of control of the management of hotel and have
positive and negative effects on its working. Hilton is a global brand which provides full time
services of hotels and resorts and the flagship brand of Hilton (Munteanu and et. al., 2010).
In the present report, PESTLE analysis of Hilton and its positive and negative effects on
the business will be discussed along with porter’s five forces model.
TASK
P4. PESTLE analysis of Hilton and its positive and negative impacts

Hilton is a big brand that provides full time services of hotel and resorts. They have more
than 750 hotels and resorts in more than 85 countries and territories across six continents. Also,
they offer luxury services to their customers to attract a large number of people and attain
competitive advantages. Macro-environment factor persist in countries affects the working of
Hilton. The management of hotel is not capable enough to control the effects of macro
environment which include factors like political, economic, social, technological, legal and
environmental. These factors have positive and negative effects on the working of Hilton hotel.
Management of hotel has to take various steps to get benefit and reduce the effect of these
factors. Positive and negative effects of PESTLE on Hilton are described as below:
Political factors: Political stability is the key success of every sector and it is also
beneficial for the hotel industry. The management of Hilton is to cope up with the political
situations to get benefit. If the government policies are linnet regarding operation of hotel
industry and getting visa by tourists then it positively effects the working. On the other hand, if
government of country is not stable have strict policies regarding visa application to remove
terrorism activities, it has negative effect on working (Salamon, 2010).
 Positive impact: If the policies of government are linnet and have supportive to hotel
industry, it helps to increase their business and expand their activities. This will be
beneficial for them to earn higher profit.
 Negative impact: If the government is not stable have strict policies regarding
application of visa then it affects the tourists and the business of hotels also.Economic
factors: It includes the factors related to economic condition of country. It includes the
factors such as recession, inflation, income of individuals and cash flow in country. These
factors have positive and negative impact on the business of Hilton hotel (Schroeder,
Minocha and Schneider, 2010).
 Positive impact: If the economic condition of country is good and if income of
individuals is good and high flow of cash, then it is beneficial for Hilton hotel and
increases their profitability.

 Negative impact: If there is situation of recession, low income of individuals and low
flow of cash in economy, then it affects working of Hilton and decreases the profitability
as well.
Social factors: This includes the factors such as culture, age, consumer lifestyle and
demographic variables, etc. All these factors have a positive and negative impact on the
performance of Hilton (Scott and Davis, 2015).
 Positive impact: If there is more young age people in country then it helps the hotel to
increase their business and profitability. Lifestyle of consumers and demographic
variables also help the hotel industry to attract a large number of customers.
 Negative impact: If the country has a large number of population of old age or having
less population then it affects the business of Hilton in a negative way.
Technological factors: It is related to technology. This includes the factors like use of
advanced technology, online booking system, use of solar system, etc. These factors have
positive and negative impact on the working of Hilton.
 Positive impact: If Hilton uses advanced technology in operations, it will be beneficial
for them. It will help the hotel reduce its operating cost of activities and provide more
quality services to their customers at affordable price. Use of online booking system will
assist hotel to expand their business activities in large areas and makes the process easy
for customers to book hotels in advance.
 Negative impact: Advanced technology increases the cost of Hilton as they have to give
training to their employees to use it effectively. The use of outdated technology by Hilton
affects the quality of services and reduce customer satisfaction as well. This will reduce
their business and profitability (Sørensen, 2012).
Legal factors: These factors also affect the performance of Hilton in an indirect way.
This includes the factors related to immigration and visa application policies of government.
 Positive impact: If the legal policies made by government are linnet for hotels and
individuals, then it will promote tourism in country which will automatically give a
positive impact on the business of Hilton.
 Negative impact: If immigration and visa application policies are strict to control
terrorism activities, it will affect the tourism sector of country and will reduce profit of
business in Hilton.

Environmental factors: These factors affect the environment of country. This includes
pollution due to the activities of hotels, waste disposal system, harmful gases, etc.
 Positive impact: If Hilton will have a good waste disposal system and take care of the
environment then it would help the hotel to improve their brand image in society. This
will be beneficial for them to increase their business and profitability (Teece, 2010).
 Negative impact: If hotel would not take care of the environment and will not have
solutions regarding safeguarding environment then they will have to face criticism of
society.
Porter’s five forces model
This model helps hotel to take competitive advantages in the market. This helps the
management to understand customer preferences and provide services. This contribute in
making the strategies according to that. These five forces used by management of Hilton are
described as below:
 Extent of rivalry among existing firms: Hilton hotel has many competitors like
Marriott, Sheraton, Hyatt Regency, Radisson Blue, etc. So, the management of Hilton is
required to analyse the market and competitors as well as make plans accordingly. As a
result, they do massive investment which provides them greater income growth as
compared to their competitors (Tiwana and Konsynski, 2010).
 Bargaining power of Hilton suppliers: Hilton purchases their products from more than
4000 suppliers and most of them have low bargaining power due to lack of uniqueness in
products. Another benefit for Hilton is that they give mass order to suppliers and so, they
does not switch to other brands.
 Threat of substitute products and services: There is no significant threat to hotel. One
of the threats faced by hotel is that people like to reside in the home of friends and
relatives instead of hotels. Another threat faced by Hilton is technology like persons
using video conferencing for meeting instead of visiting the places. This affects the
business of Hilton (Wild, Wild and Han, 2014). The main threat to hotels is other
competitors in market and the service provide by them. This will affect the sales and
profitability. Due to open entry in hotel industry the threat to Hilton is high.

 Bargaining power of buyers: The customers have high power of bargaining as they
have many options to stay. Hilton to attract the customers provide them offers at
affordable price. This will help them to attract customers at a large scale.
 Threat of new entrants: There is high threat of new local hotels which are more
affordable and attract the customers who have low budget. Due to open market and
having no restrictions on hotel industry, it is easy to enter in hotel industry which affects
the business of Hilton.
CONCLUSION
It has been concluded from the above report that management of Hilton hotel has to take
care of macro-environment factors which affect their working. This is the duty of management of
hotel to make strategies accordingly so that they would take benefits from them and will increase
their profitability.

REFERENCES
Books and Journals
Munteanu, C. and et. al., 2010. An analysis of customer satisfaction in a higher education
context. International Journal of Public Sector Management. 23(2). pp.124-140.
Salamon, L. M., 2010. Putting the civil society sector on the economic map of the world. Annals
of Public and Cooperative Economics. 81(2). pp.167-210.
Schroeder, A., Minocha, S. and Schneider, C., 2010. The strengths, weaknesses, opportunities
and threats of using social software in higher and further education teaching and
learning. Journal of Computer Assisted Learning. 26(3). pp.159-174.
Scott, W. R. and Davis, G. F., 2015. Organizations and organizing: Rational, natural and open
systems perspectives. Routledge.
Sørensen, H. E., 2012. Business development. In Palgrave Encyclopedia of Strategic
Management. Macmillan Publishers Ltd.
Teece, D. J., 2010. Business models, business strategy and innovation. Long range
planning. 43(2). pp.172-194.
Tiwana, A. and Konsynski, B., 2010. Complementarities between organizational IT architecture
and governance structure. Information Systems Research. 21(2). pp.288-304.
Wild, J. J., Wild, K. L. and Han, J. C., 2014. International business. Pearson Education Limited.
Online
What is a PESTEL analysis?. 2017. [Online]. Available
through.<https://blog.oxfordcollegeofmarketing.com/2016/06/30/pestel-analysis/>.