HOS802 - Hospitality Management: Hilton Hotel Analysis Report

This report provides a comprehensive analysis of the Hilton Hotel's position in the Australian market, focusing on strategic and tactical management decisions to enhance market share. It begins with an introduction to the Hilton Hotel, followed by a detailed position analysis utilizing the PESTLE and Porter’s Five Forces frameworks to evaluate the macro and micro environments. The PESTLE analysis examines political, economic, social, technological, legal, and environmental factors impacting the hotel's operations. Porter's Five Forces analysis assesses industry rivalry, the bargaining power of buyers and suppliers, the threat of new entrants, and the threat of substitute products or services. Based on these analyses, the report identifies key opportunities and threats, culminating in specific recommendations for the Hilton Hotel to strengthen its market position, such as adopting new technologies and enhancing customer service. The report concludes with a summary of findings and a list of references.

RUNNING HEAD: HILTON HOTEL
HOSPTALITY MANAGEMENT SIMULATION
Name:
Date of submission:

HOSPITALITY MANAGEMENT SIMULATION 1
Introduction
The research report is formulated on the title ‘Hospitality Management simulation’. The
basic aim of the report is to lay emphasis on the current position of the ‘Hilton Hotel’ in
Australia. It comprises of a brief overview of the Hilton Hotel. It includes the position analysis of
the chosen hotel with the help of managerial tools. Moreover, it also comprises various
recommendations based on position analysis of Hilton Hotel. Moreover, it provides a chance to
upgrade the understanding by practically applying the managerial concepts to real-life company.
Hospitality company overview
Hilton hotel is a globally recognized international chain hotel founded in the year 1919
(Owler , 2019). It has hotel outlets in 78 countries including Boston, London and Chicago
(Hilton , 2019). In Australia, Hotel Hilton has seven outlets including Sydney and Cairns
(Kinnon , 2018).
Position analysis
In order to assess the position of the Hilton hotel, it is essential to examine the macro and
micro environment in Australia. The required description is mentioned below.
PESTLE Analysis
PESTLE analysis is a tactical tool used to examine the macro environment of a brand. It
is an acronym that stands for Political, Economic, Social, Technological, Legal and
Environmental factors. It is mainly used to determine the impact of these factors on organization
performance. It helps in determining the number of opportunity and possible threats prevailing in
the external environment (Berry , 2017).
1. Political factor: It helps in determining the political stability of the country, essential for
a business to operate smoothly. It includes factors such as corruption level, tax policies,
and government regulations. Australia has an intermediate corruption rate (Villarino ,
2019). Additionally, government regulates control over the business practices (Heritage ,
2019). Thus, Australia’s political environment does not prove much fruitful for Hilton
hotel brand to conduct its practices.
2. Economic factors: It comprises factors that determine the economic performance of the
country. It includes factors such as GDP, Inflation rate, Unemployment rate and level of

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disposable income. It is examined that Australia has a population of ‘24.8 million’. Its
GDP is marked at 1.2 trillion with a growth of 2.3%. Additionally, its inflation rate is
only 2.0% (Heritage , 2019). It is assessed that Australia has fine economy. Its high
population will generate more customers to the brand. Its high GDP suggests that
customers will have more disposable income to spend. Thus, these factors will directly
benefit the Hilton hotel brand to achieve high profits.
3. Social factors: This dimension relates to social norms, traditions, lifestyle, population
size, health status and individual’s eating habits. It determines the demographic
characteristics of the country that relates to the work practices of the brand. There is
unequal distribution of wealth in Australia (Roy Morgan, 2018). Australians favor a
relaxed lifestyle (Nomads World, 2019). Additionally, it is assessed that Australia is a
multicultural country (Human Rights, 2019). Australia’s multicultural environment will
bring an opportunity to the Hilton hotel brand to experiment with new social practices
within its business premises.
4. Technological factor: It emphasizes on technology automation and innovation level that
can affect the business operation. It is examined that Australia ranks 17th as one of the
innovative nations in the global world (Liddy, 2015). It suggests that Australia’s
upgraded technology will help the Hilton hotel brand in providing best service to its
customers. Additionally, it will assist in cutting the cost by altering the manual
requirements with the automation.
5. Legal factor: It focuses on law relating to consumer protection, patent and employment
laws and other health and safety laws. It attains certain similarities to the political factors.
It is analyzed that Australia has low crime rate as its safety index is marked at 57.75
(Numbeo, 2019). Additionally, government lay prior attention in protecting the
copyrights, health and safety laws in the country (Austrade , 2019). Thus, it is analyzed
that Australia has favorable legal environment. Thus, it allows the Hilton hotel brand to
attract its international customers easily as the country has low crime rates. Additionally,
government will assist the brand in safeguarding its patent rights in Australia.
6. Environment factor: It deals with factors such as climatic condition, air and water
pollution, natural disaster and environmental policies. It is analyzed that these factors
have a direct and long term effect on business practices. It is examined that Australia is

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less prone to natural disasters (Alston, 2011). Thus, it suggests that Australia offers a
moderate environment to Hilton Hotel. Thus, it makes it easy for the brand to conduct its
operation smoothly with the absence of a threat of physical calamities.
Porter’s Five Force Analysis
It is also a managerial tool used to examine the internal environment of a brand. It helps
the brand in understanding the profitability level and intensity of competition prevalent within
the industry. Additionally, it helps in developing effective plans for the future to overcome the
threats and to potentially utilize the opportunities (Roy , 2011). It mainly deals with five factors.
These factors are described below.
Industry rival: It determines the level of rivalry prevailing in the market among the
current companies. It is analyzed that the Hilton Hotel faces high threat from the existing hotels
in Australia. It faces intense competition from the rising boutique hotels in Australia (The Hotel
Conversation , 2019). In Australia, it also faces certain degree of competition from the
universally renowned Hotels such as Marriott and Hyatt (Owler , 2019). This is because they
provide unique experience at low prices as compared to chain hotels (Jones, 2013).
Additionally, it faces low customer loyalty because Australians are not loyal to their respective
brands (O'Brien, 2018).
Negotiating power of the buyer: It determines the power of the customers to drive down
the price. It is analyzed that the bargaining power of the customers is low. This is because of the
availability of large customer strength in Australia (Worldometers , 2019). Additionally,
Australians are not priced sensitive (Mitchell, 2017). Additionally, there is not high availability
of substitute hotels.
Bargaining power of the supplier: It is analyzed that the Hilton Hotel attains
subsequently low threat from the suppliers. This is because it deals with providing a hospitality
service to the customer rather than product allocation. Thus, suppliers attain no specific crucial
role in hospitality industry.
The threat of new entry: It focuses on the level of threat offered by new competitors in
the industry. It is examined that Hotel Hilton has low risk from the new competitor in hospitality
industry. This is because it requires high time to develop chain hotels. It involves large sum of

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money as an investment to enter in the industry. Additionally, existing chain hotels like Marriot,
Hilton and Hyatt have established goodwill and possess patent rights (Socialtables , 2019).
Moreover, it required high specialist knowledge as hotel industry keeps on updating as per the
change in trends and customer preference. Additionally, new entrants will face tough
competition to achieve economies of scale in Australia as well-known hotel brands are already
established in Australia.
The threat of substitute product/service: This factor determines the level of threat
arises due to availability of substitute products/services in the market. It is evaluated that Hyatt
hotel attains high risk from substitute hotels like boutique hotels and other international hotel
brands. This is because boutique hotels offer unique experience at a low price (Jones, 2013).
Additionally, other hotel brands like Hyatt and Marriott also offer hospitality at a price similar to
Hilton hotel (Davidson, 2010). Thus, it is examined that low switching cost is the key factor for
facing high threats from substitute hotel brands.
Figure 1: Table summarizing Porter’s Five Force Model with respect to Hilton Hotel.
S/N FACTOR DEGREE OF
THREAT
1 Industry Rival High
2 Negotiating power of the customer Low
3 Negotiating power of the supplier Low
4 The threat of new entrant Low
5 The threat of substitute product High
Conclusion
The report summarizes the title ‘Hospitality Management Simulation’. The external
environment analysis of Hilton Hotels suggests that it offers multiple opportunities to the hotel
brand. From the Hilton hotel's internal environment analysis, it is assessed that Australia’s
internal environment does not offer many benefits. Thus it concludes that Australia’s external
environment has assisted the Hotel Hilton in attaining an intermediate position in Australia.

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However, it is assumed that Hilton Hotel can strengthen its position in Australia as well as in
international market if it relies on the recommendations mentioned below.
Recommendations
1. In order to face low competition in the hospitality hotel industry, Hilton hotel should
acknowledge its customers with the latest technology. Example: It should adopt the usage
of delivery robots named as Savioke robots (Jhonson , 2018).
2. Similarly, to lower the threat offered by substitute hospitality service, Hilton hotel should
adopt practices that help the brand to achieve a distinct and unique position in Australian
market. Example: It should lay prior attention in addressing its customers by their names.
This will help in building positive relationships between the customer and the Hilton
hotel brand. Additionally, it should follow up its customers to acknowledge them with all
their needed requirements on time (Elliott, 2018).
3. Additionally, Hilton hotel should tie its staff incentives with the customer’s feedback.
This step will provide dual benefit to the hotel brand. In order to attain more incentives,
the staff members will take prior attention in providing the customers with best service
and overall experience. Firstly, it will help the Hilton hotel in raising satisfied customers.
Secondly, it will assist in lowering the threat from substitute hospitality service (Elliott,
2018).

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