Hospitality Operations Management Analysis: Hilton Hotel Report

This report provides a comprehensive analysis of hospitality operations management, focusing on the Hilton Hotel. It explores various aspects, including the nature of hospitality products and services, influences on demand patterns (seasonality, economic factors, and living standards), and customer profiles with their expectations. The report delves into factors affecting average spending power, key stages in product and service development (idea evaluation, screening, and product development), and features influencing customer perception. It also evaluates pricing methods and factors affecting revenue generation and profitability. Furthermore, the report examines performance measures, appraisal techniques (quantitative and qualitative), and approaches to business analysis within the hospitality industry. The analysis incorporates specific examples related to the Hilton Hotel's operations and highlights practical considerations for effective management.

Hospitality Operation
Management

Table of Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
AC 1.1 Analyses the nature of different hospitality product and service areas.................................3
AC 1.2The influences affecting patterns of demand within hospitality operations...........................4
AC 1.3 The customer profiles and their differing expectations and requirements in respect of
hospitality provision .........................................................................................................................5
AC 1.4 The factor affecting average spending power (ASP) in a hospitality business........................5
AC 2.1 Evaluating key stages in development of product and service...............................................6
AC 2.2 The features which contribute towards the customer’s perception of product and services 8
AC 2.3The opportunities and constraints affecting product and services .........................................9
AC 2.4 Different merchandising opportunities................................................................................10
TASK 2........................................................................................................................................................10
AC 3.1 Evaluate different methods of pricing..................................................................................10
AC 3.2 Assess the factors which affect revenue generation and profitability in hospitality operation10
TASK 3........................................................................................................................................................11
AC 4.1 Performance measures and appraisal techniques................................................................11
AC 4.2 Application and usefulness and limitations of quantitative and qualitative appraisal techniques
.........................................................................................................................................................12
AC 4.3 Approaches to business analysis, evaluation and planning in hospitality industry...............12
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Hospitality operation management can be considered as activities which offers the
business skills in order to work in multiple operational areas for the management of food and
beverage operations. The study is based on the operations of Hilton Hotel which is the leading
company and provides variety of hospitality services (Law, Buhalis and Cobanoglu, 2014). This
can be achieved by balancing the demands of customers with production of goods and services in
hospitality industry. The study will provide nature of goods that are produced in hotels for
consumption purpose. It will also focus in determining the influences such as cultural, seasonal,
ethical influences etc. that affects the operations of the hospitality industry. The research will
also help in understanding the various customer expectations and requirements in terms of
hospitality provisions. The study will also mention various key stages involved in development
of product and services. The document will help in analyzing the features that help consumer in
choosing particular hotel for consuming food and beverages. This report will also create an
understanding about the factors which affect the revenue generation and profitability of the firm.
TASK 1
AC 1.1 Analyses the nature of different hospitality product and service areas
In hospitality industry, usually eatable products are produced such as food and beverages
for the consumption purpose. It may be based upon various nature in Hilton hotel. These
products and services are mainly based on the type of goods. Hospitality industries generally
deal with variety of products which may not be kept or warehoused for more than 2 days such
type of goods need to be quickly consumed. Hence, here are discussed some nature of hospitality
products and services: Perishable: It can be considered as those items which are less durable in nature such as
foods and beverages in Hilton Hotel (Chan and Hsu, 2016). These products cannot be
refrigerated for longer time duration and required to be consumed soon after ordered. Tangible and intangible elements: Managers of Hilton Hotel generally offer both
Tangible and intangible services to customers. For this purpose, tangible services are
referred as internal and external design of the hotels whereas intangible elements

generally deal with the operational functionality of the Hilton hotel which can be clearly
visible by consumers. It may have related to room services and dinner facilities which are
provided by Hilton hotel. Inseparable: It can be considered as those services which can be owned by the person but
it cannot be opened such as services production to consumer’s experience.
 Service Areas: Service area can be termed as products and services provided by the
company. It is concerned with area which is provided by hospitality industries for
consuming goods and services. It may be conference hall, banqueting facilities which are
provided by management of Hilton Corporation.
AC 1.2The influences affecting patterns of demand within hospitality operations
Hilton Hotel deals with large variety of items but these products are mainly produced
according to the demands of customers. Hence, these demands may vary according to the
preference and taste of consumers. It is often observed that demands of consumers change
constantly with the change in the trend. Such factors which affect the demands of the consumers
are as follows: Seasonality factor: This can be considered as major factor which influence the decision
of customer as seasonable changes affect the choices of the customers (Kang and et.al.,
2016). Customers in Hilton Hotel mainly focus towards the productions of those foods
and beverages which have great chances of seasonal sales. Economic Factors: It is the most common factor which affects the decision of consumers
as prices of the products plays an important role in preferences of the customer towards
obtaining the food from particular hospitality industry. Thus, fall in the income of the
customers may directly impact on the purchasing power which result in less demand of
the goods and services in Hilton hotel.
 Standard of living: Basically, customers generally concentrate towards healthy and
hygienic food and beverages. Hence, in order to get healthy food, customers generally
prefer high standard of hotels for consumption of food items. It increases the demand of
products in a Hilton organization.

AC 1.3 The customer profiles and their differing expectations and requirements in respect of
hospitality provision
Expectation of the customers and their representative requirements are generally based on
the profile of the hospitality organization. Hilton Hotel have maintained its position in the market
in order to create a great impression on the minds of the people. Hence, customer's profile for the
hotel may vary. The customer profiles of the Hilton hotel are described below: Types of hospitality business: It generally depend on the hospitality business that what
type of products they are serving to consumers. Hilton Hotel's staff members have
usually experiences different customers so their demands may also vary accordingly. In
order to get appropriate services regarding the demanded food, they expect accordingly. Pricing consideration: Customer's of Hilton Hotel generally provides the better quality
of services which forces their customers to visit the hotel again (Wang and etal., 2015).
Here, families and group get together are generally organized so they are least bothered
about high prices of the product but high quality of services provided by Hilton attracts
them. Expectations of the consumers: Hilton Hotel provides the services to large number of
consumers and every time, new clients visits to the Hotel are likely to be visited next
time. Every time their demands vary and according to their demands, they expect the
services of the Hilton Hotel according to their demands.
 Meal experience: This organization generally serves high class customer so they prefer
healthy and hygienic foods and beverages. In order to get served, the quality of services
they choose services over the prices of the products. Different customers like to order
different food such as Health conscious person prefer healthy meal while a group of
family contains kids, prefer variety of Fast food then a proper meal.
AC 1.4 The factor affecting average spending power (ASP) in a hospitality business
Hospitality business usually contains wide range of products for different types of
customers and according to the different services prices of the goods and services also vary. This
helps in bring out Average spending Power of customers. Average Spending Power Reveals

overall expected expenses of the customers. It may be depended on various different factors
which influence purchasing power of the people. Such factors are as follows: Economic Situation: This situation arises at the time when governmental alteration
affects overall income generation of the country. Hence, with the increase in the taxes
and custom duties, it may impact on the individual income of the people. This result in
lower economic condition which negatively customer's purchasing power. Social/cultural Influence: Sometimes, many social situations occurs that may influence
the purchasing power of consumer such as arrivals of festivals, season for consumer to
spend more eagerly and helps in increasing the profitability of Hilton Hotel. This industry
deals with food and beverages and works on a much wider concept of providing quality
of services to customers so in this situation when any main festivals arrive then big
families generally plan to have family dinners or get togetherness in the form of big
parties etc. This increases the ASP of consumers and ultimately leads to higher revenue
generation. Status: High class people have the more ASP and this improve the Average spending
power of the customers. This is the most important factor which affects ASP of the
people as high class customer cannot compromise with the quality of services. In order to
get served best services they spend large money and this ultimately helps to maximize the
ASP of consumer.
Size of the Income: People relay on their income in order to purchase any product or services. If
they earn more they are more capable to spend more on the luxury items whereas the person who
earns less will have less spending power as comparison (Solnet, Kralj and Baum, 2015). ASP
completely based on the income of the person for example if monthly income and savings of the
person is large then one will not bother about some expenses in order to get food and beverages
of the Hilton Hotel.
AC 2.1 Evaluating key stages in development of product and service
Different profitability factors includes labor intensity, elasticity of demand,
standardization of products etc. these factors are described below:

 Labor intensity: This profitability factor determines those cost which is occupied by the
human resource and capital involved with the production of particular product. Hilton
hotel can be considered as the labor intensive because use of workers in hospitality
industries is more than the use of capital.
 Demand of product: It is determined as demand of the product and cost of the key stages
in order to develop products and services in Hilton Hotel
Operation of goods and services in Hilton industry is dependent on various different
factors. Process of developing a product require proper planning and implementation.
Implication of strategies and proper utilization of resources may lead to effectiveness of goods
and services. Managers of Hilton Hotel need to properly determine opportunities and threats in
order to develop an innovative product in the company (Ryan, 2015). It helps in increased
productivity of the Hilton Hotel and this ultimately leads to build the healthy relationship of the
customers with Hilton hospitality staff members.
For example, company need to introduce new swimming pool facilities in the Hilton
Hotel so for this purpose managers need to market introduction of such new services. Managers
of Hilton Hotel have to consider various key stages in order to develop a product. Such key
stages are described below: Idea Evaluation: This can be determined as analyzing the needs and demands of the
people in a market. This helps in creation of an innovative idea for the development of
new product in market based on the demands of the consumer. Managers of Hilton Hotel
generally analyses the demands in order to develop swimming pool. Idea screening: This is referred as innovative thoughts while planning to provide new
services to consumers of Hilton hotel. These services are provided in the form of pool
facilities in summers. Such innovative ideas are generated to sustain the business for
longer run Product development: It is the major key stage which involved in the development of
goods and services. Advertising of the product and making consumer aware about the
uses of such goods helps organization in building the strong and healthy relationship with

customers. It also helps in attracting large number of masses towards introduction and
development of Swimming pools in creative ways. Business Analysis:- It is done to analyze current situation of business and identifying
market conditions. Developing swimming pool will enable in providing unique services
to people. It will help in enhancing brand image of hotel in the market. Product Development: - this factor enables in determining what benefit or features must
be added in products so that more number of people can be attracted. it helps in
developing product as per needs of people. Also, what features are to be added and
modified are also analyzed. Then, product is developed. Test Marketing: in this stage the develop product is tested and reviews are taken. It
helps in finding out errors and mistakes. Then, measures are taken to improve it. the
product is tested by taking sample of customers. it helps in finding out whether their
needs are fulfilled or nor. Marketing Research: here, research is done to find out target market so that product can
be launched. This factor helps the managers of Hilton hotel to determine the taste and
preferences of the consumer. According to the marketing research, managers focus on
implementing the idea which was generated after marketing research.
 Commercialization and launching : This key stage is very important as it helps in
increasing the sales of the product by minimizing the prices if the goods and services
(Rajand Griffineds. 2015). It attracts large number of customers and it also helps Hilton
hotel in maximizing the profitability of the business. Developing swimming pool will
help in attracting customers.
AC 2.2 The features which contribute towards the customer’s perception of product and services
In order to attract large number of people, Hilton Hotel needs to create a good reputation
of its company in the market. This could be possible by strongly planning about various
components of the business such as embracing image of the brand, top quality of services to
consumers and variety of products etc. It helps in creating good impression of products and
services provided by Hilton Hotel and this will be result in attracting large number of people

towards the food and beverages produced in this hospitality industry. It might be depended on
various factors such as Brand image: It is the major factor which directly impacts on the preferences of
customer as brand image helps people in choosing a particular hotel for consumption of
goods and services. This easily influences the minds of the people in choosing a specific
hotel.
 Product quality and large variety of products: Quality of services generally attracts
consumers as most of the people like to have healthy food and best services (Guo, Liu
and Chai, 2014). Generally people like to have delicious and healthy food services along
with best services people also like to try different dishes every time so it derives them to
visit Hilton Hotel again. Customer's preferences also depend upon the sanitized and
healthy production of meals in hospitality industries.
 Effective facilities: Nowadays, many street stalls are providing foods and services on a
nominal prices so price factor is also one of the important factor which attracts customers
but due to the unavailability of proper sitting space, generally people cannot afford to sit
at the streets for having lunch or dinner. Hilton Hotel provides better sitting space for
customers which attracts big groups and families towards the consumption of goods and
services.
AC 2.3The opportunities and constraints affecting product and services
Opportunities can be referred as those factors which help in maximizing operations and
productivity of the business which result in sustainability of the hospitality organization for
longer duration (Xu and Gursoy, 2015). On the other hand, constraints restricts the growth and
development of the business and leads to the ineffective operations which minimizes the profits
of the company. There can be various opportunities and factors are there which effect the
environment of the hospitality industry such are as follows:
 Hilton Hotel has greater opportunities in order to compete with competitors as this
company have developed new products.
 Another big opportunity for Hilton Hotel is to attract all types of people such as families,
couples, sports person etc.

 Because of less amount of local business opportunities, Hilton hotel faces a challenging
in attracting the people of business park is one of the major constraints the company have
to suffer.
AC 2.4 Different merchandising opportunities
In this globalized world, Hilton Hotel have different merchandising opportunities which
helps in increasing the sales of the foods and beverages in Hilton Hotel. Various merchandising
opportunities are as follows:
 Purchasing power of the people affects their purchasing power so Hilton Hotel has a large
opportunity to provide food to travelers with a nominal charges.
 Hilton industry gets a good merchandising advantage of low class people who have low
economic conditions.
There are various merchandising opportunities such as online payment facilities which ensures
online payments, E-banking methods etc. (Kimes and Wirtz, 2015)
TASK 2
AC 3.1 Evaluate different methods of pricing
Hospitality industries adopt different types of pricing methods which affect the supply
chain of the organization (Pricing methods. 2018). Such methods are as follows: Co-oriented pricing: This method of pricing is obtained by determining the actual cost of
the production and certain percentage of profit is then added to prices of goods.
 Marketing-oriented pricing: Here, competitor company's prices are analyzed or
researched and then Hilton industry sets the prices of the products.
Questions 1
a) Managers of Hilton hotel have adopted marketing oriented pricing method which helps them
to set the prices of products and services by analyzing the prices of other competitive industry. It helps in
attracting the large number of people as cost discrimination is completely eliminated so consumer never
compare the prices.

AC 3.2 Assess the factors which affect revenue generation and profitability in hospitality
operation
All the factors which are involved in the production of goods and services directly affects
the profitability and revenue generation of the products and services. Such revenue generating
factors are sales mix, ASP and customer turnover and many other (García-Lillo, Úbeda-García
and Marco-Lajara, 2016). Different profitability factors includes labor intensity, elasticity of
demand, standardization of products etc. these factors are described below: Labour intensity: This profitability factor determines those cost which is occupied by the
human resource and capital involved with the production of particular product. Hilton
hotel can be considered as the labour intensive because use of workers in hospitality
industries is more than the use of capital. Demand of product: It is determined as demand of the product and cost of the demanded
product involved. Change in the demand of the customers in Hilton hotel may inversely
affect the prices of goods and services.
 Standardization: It can be considered as the variety of products available in menu and
such production need to be carry out considering the sanitary aspects which may
influence the minds of royal customers. Staff manager of Hilton Hotel focuses on
delivering the standardized services which attracts more royal customers.
TASK 3
AC 4.1 Performance measures and appraisal techniques
Performance appraisal is one of the best technique which force the workers in effective
production of goods and services. Management of Hilton Hotel provide appraisal to its
workforce in order to deliver quality of services to consumers (Denizci Guillet and Mohammed,
2015). In order to perform effective operations in Hilton hotel, appraisal of the workforce is
mainly depended on the following factors:
Quality management is effective performance appraisal technique. In order to control
and manage the quality of products management of Hilton Hotel have to consider various
methods for improving the Quality of products and services.

Speed of delivery can be referred as efficient delivery of the demanded goods and
services of the customer in Hilton Hotel. It helps in establishing a strong relationship with
customers and this help in retention of regular consumers.
Developing Qualitative and quantitative data can be helpful in measuring the overall
operational activities in Hilton hotel. Being the manager of the Hilton Hotel, one have to collect
all the necessary data which help ion improving the services of the company such as feedback
from customer, satisfaction, reliability etc.
Sales performances can be measured by effectively balancing the supply chain of the
Hilton hotel corporations. It help in determining the profitability of the business. All the above
factors are needed to be improved at the internal state but in order to develop a product,
managers of Hilton hotel also need to compare prices, quality and reputation of different
competitive hospitality companies.
AC 4.2 Application and usefulness and limitations of quantitative and qualitative appraisal
techniques
Appraisal techniques are mainly based on the sample data which is collected in order to
measure the performance of the company (Brown, Arendt, and Bosselman, 2014). Quantitative
appraisal involves the products and services which are provided to consumers, effective efforts
of employees etc.
Quantitative appraisal techniques is helpful in influencing the purchasing power of the
consumer. This increases the sales of goods and services of Hilton hotel which in turn, help the
company in producing the best quality of goods. This performance management approach helps
to attract customers and this will result in increased sales of services.
Qualitative appraisal technique help in improving the quality of services in Hilton hotel. It
improves the performance of the company. Application of this approach help in maximizing the
productivity of the Hilton and hence help in generating more profits in the business.
AC 4.3 Approaches to business analysis, evaluation and planning in hospitality industry
Business analysis is the practice that enables changes in organization and can help in
identifying the needs of customers and various solutions of such analysis that help in delivering
value to Stakeholders. Business evaluation can be considered as a set of estimated procedures