Report on Hospitality Operations and Management at Hilton Hotel

This report provides a comprehensive analysis of hospitality operations management, focusing on the Hilton Hotel. It begins with an introduction to the hospitality industry, highlighting key areas such as accommodation, food and beverage, and tour and travel. The report then delves into the nature of hospitality products and services, discussing their intangible nature, heterogeneity, inseparability, and perishability. It examines factors influencing demand, including seasonality, time of day, and health trends. Furthermore, the report explores customer profiles, spending power, and their expectations regarding hospitality provisions. The study investigates product and service development stages, customer perception factors, and opportunities and constraints within hospitality management. It evaluates pricing and profitability concepts, revenue generation, and performance measures, including both quantitative and qualitative appraisal techniques. The report offers insights into merchandising opportunities and concludes with a summary of key findings and references.

Hospitality Operation
Management

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
1.1 Nature of hospitality product and service areas....................................................................4
1.2 Different influences affecting patterns of demand within hospitality operations.................5
1.3 Customer profiles and their differing expectations and requirements in respect of
hospitality provision....................................................................................................................5
1.4 Factors affecting average spending power (ASP) in hospitality businesses. .......................6
TASK 2............................................................................................................................................7
2.1 The key stages in product and service development applied within a hospitality operation.
.....................................................................................................................................................7
2.2 The features which contribute towards the customers’ perception of products and services.
.....................................................................................................................................................7
2.3 Assessing opportunities and constraint affecting the product and service development
within hospitality management...................................................................................................8
2.4 Evaluating the different merchandising opportunities for hospitality products and services.
.....................................................................................................................................................8
TASK 3............................................................................................................................................9
3.1 Evaluating different pricing and profitability concepts of hospitality operation
management:...............................................................................................................................9
3.2 Assessing the factors which is affecting revenue generation and profitability on
hospitality operations..................................................................................................................9
TASK 4..........................................................................................................................................11
4.1 Ranges of performance measure and appraisal techniques to individual aspect of
hospitality operations................................................................................................................11
4.2 Usefulness and limitations of the various quantitative and qualitative appraisal techniques
and their application to hospitality operations..........................................................................12
4.3 Application of approaches to evaluating and planning appropriate to hospitality
operations:.................................................................................................................................12
CONCLUSION..............................................................................................................................13

REFERENCES..............................................................................................................................14
.......................................................................................................................................................14

INTRODUCTION
Hospitality industry consists of chain of businesses that gives services to consumers. It
mainly focuses on giving memories and experiences to their customers. Hospitality industry
work on uniqueness because it totally depend on discretionary income and leisure. In the area or
coverage of the hospitality industry is primarily accommodation (hotels, bed, breakfast and
loading businesses). Another key area is food and beverages (restaurants, fast food chains) and
third area is tour and travel(trains, airlines and cruise ships). In this report chosen industry in
hospitality is hotel Hilton; an American multinational brand name in Hotels and resorts. Its
headquarters are in Virginia. Report covers nature of hospitality product and services and factors
that influences demand of hospitality industry products. Further it explains different consumers
profile and their emerging needs and demands. Moreover, it elaborates opportunities and threats
while developing products of hospitality industry. It also explains pricing methods of products
of hospitality industry.
TASK 1
1.1 Nature of hospitality product and service areas nature of products of hospitality industry as
follows:
Intangible: Tangible goods are goods that can consumer look, feel and taste after
payment of goods and services. Intangible goods can only be feel but can not be touch. eg. Food
and beverages can be taste and the serving of the food can not be touch.
Heterogeneity: identity of goods are replicated but services never be
same(LegrandChenSloan2013). Services are heterogeneous in nature. Changes in experiences
due to demography, season, environment, vendors and service providers in Hilton. human
involvement is very much in case of services. So they differ according to nature. Eg. Serving
and dealing with customer’s is different according to location, weather,and staff etc.
Inseparability: A physical goods remain for extended time(Cetin Dincer,2014). On other
hand services mostly consumed immediately after production. A service remain till period till
person connect with experience. staff and services they deliver can not be separated in Hilton.
Perishability: Services and experiences never be stored. nature of services are highly
perishable(Myung, McClaren,Li,, 2012). In contrast goods are store in warehouses, in

inventories and houses in Hilton. The services if not sell at appropriate time then it occurs loss.
For).
1.2 Different influences affecting patterns of demand within hospitality operations
Seasonality: hotel industry is very much influenced with season and it helps to access
behaviour of consumers. Seasons are bifurcated into High , green and low according to demand
and perception. Hence in peak season (in December month) the local, national and international
tourist come to visit the places and enjoy safaris,amusement parks,beaches and hilly areas. It
enhances the customer’s weight-age in Hilton
Time of day/ week: hospitality industry is busy and full with consumers in weekends
(from Friday to Sunday). consumers plan leisure time on weekends because weekdays are
office days. weekdays comparatively less costly then weekends. Weekends generate huge
revenue for hospitality industry.
Healthy Living: In old days, people less visits places but in modern world people zeal to
explore new places to reduce stress and for entertainment. Today's consumers are more
concerning about health. By access their demand and increase revenue hospitality industry
provide fitness centres,spas and yoga sessions and healthy food options. In addition to in room
exercise accessories, vitamin infused water shower arrange by them.
1.3 Customer profiles and their differing expectations and requirements in respect of hospitality
provision.
Spending power: In hospitality sector, goods and services are offer at different price
level according to consumer demand (PeggPattersonGariddo 2012.). There are different factors
that changes average spending power. There are two types of consumer’s medium and high class.
And it differs according to size of income, status, social/cultural influences and economic
condition of consumers it affects spending power of consumer.
Types of Hospitality Business: Hospitality sector bifurcate into three sectors Food and
beverages, tour and travels and accommodation. In this report Hotel Hilton is provide mainly
accommodation services and it successfully meet their needs.
Pricing considerations: most consumers of Hotel Hilton is rich class and families and
couples. That income class and age group people only focus on services rather than cost
consideration. So it enhance revenue of organisation.

Meal experience: Hotel Hilton provides good food experience to their customers. Today
consumers are more health conscious so it provides healthy food according to their demands.
Expectation requirements: Every industry compensates demands of every type of
consumers for that they provide each and every attribute that satisfy needs of consumers.
Consumer profile Spending power Pricing consideration Meal experience
High Superior Superior Superior
Medium Average Both average and high Average
Low Low Both medium and low Low
1.4 Factors affecting average spending power (ASP) in hospitality businesses.
In hospitality sector, customer wants different types of services with vary range of
prices that shows average spending power of consumer(rGunasekaran, Ngai, 2012). some
factors that decides average spending power of consumer:
Size of income: size of income affects purchasing power of consumer. If consumer's
income is high purchasing power is also high and vice versa. consumers income group affects
revenue of organisation.
Status: Status is important factor that determines spending power of
consumers(LawBuhalis Cobanoglu, 2014.). If consumer maintains higher standard than it never
compromise in any goods and services and always favour superior goods to maintain status.
Social and cultural influences: A social and cultural factor influences buying patterns
of consumer's. Sometimes rituals and religious values influences to spend more money on the
special occasion that enhance spending power of consumer.
Economic situation: In economic situations denotes income level, per capita income and
living standard of consumer. All these factors determines buying behaviour of consume. If
economic condition is sound enough than it increases buying capabilities of consumer.
TASK 2
2.1 key stages in product and service development applied within a hospitality operation.
At time of new product development Hotel Hilton have to evaluate consumer base and
need and potentiality of product in market. There is key steps which are necessary before

developing new product in market and new product is tour and travel services in which Hilton
provide services related to the tour in addition with guide.
Idea generation: first and foremost step of new product development is idea generation
which come from any source such as internal source, Swot analysis, market research and
customers. Idea should be tested before implementation from different sides such as potentiality
of product and revenue generation etc. in Hilton.
Idea screening: second step after collection many ideas then sort best idea from it. most
feasible and enchanted idea should be selected and other ideas are rejected. most feasible idea
select on basis of strength and weaknesses of organisation, wants and perception of consumer',
recent trends in market and ROI of market. The strength before the Hilton is the goodwill and
investment power so it moves in the new sector.
Concept development and testing: another step of product development is concept
development of market according to consumer base and needs of consumer. And prices and
distribution channels should be decided according to consumers base. Hilton develop the idea of
tour and travels after access needs and demands of consumers and competitors.
Business analysis: step of product development is business analysis in which the
estimation cost of product development and revenue generation moreover expected NDP should
be calculated. So that idea can be feasible and Hilton analyse the feasibility of the idea after
evaluating all the aspects.
Product development: After applying all the strategies simultaneously then the test
model evaluated in which actual product transformed. It works on the limited product prototype.
Hence it works on the judgement of masses.
Test Marketing: In this concept prototype is launch in market for test concept. It is most
useful step to know the feedback of consumers and reform in product after know the response of
consumers .
Commercialisation: In this final stage product is ready to launch in market all strategies
are implemented. In this stage the role and responsibilities are distributed among the employees
in the departments and finally product is launch in market.

2.2 features which contribute towards customers’ perception of products and services.
consumer perception mainly depends on experience of user of goods and services.
But some other factors also contributes in building value and perception of consumers while
buying goods and services.
Price: Price play a very important role in building perception of consumers (Sisson,
Adams, 2013). Middle class consumer prefers bargain and less costly goods so price should
be decide according to consumer profile. Some consumes always remain sceptical about price
that price is high and not give discounts to ultimate consumer'.
Quality: quality is crucial part in building perception of consumers. Quality is sole
component which decides choice of consumer including durability, reliability and
comfortability. So quality always judging factor for consumer's. And word of mouth,
advertising also contribute in perception of consumes.
Service Quality: Service quality makes positive impression on consumers regarding
goods and services. service quality is sole tool which differentiates good from competitor
product and makes world wide brand.
2.3 Assessing opportunities and constraint affecting product and service development within
hospitality management
An opportunity is an unique, favourable or advantageous condition that boost up
business. Effectively it effect in increasing sales revenue as well as productivity and profitability
of an organisation (Boella and Goss-Turner, 2013). Whereas different constraints restricts
business operation that leads decrease sales and profits of business. The opportunities and
constraints of Hilton are determined below:
Opportunities: Opportunities help in competing with competitors in market. Hilton are
planning to come up with various facilities that help them to boost up in market. With new
innovating ideas to attract customer’s
Constraints: Constraints are some of restriction that leads an business to decrease in
sales, productivity and profitability (Brotherton,B. ed., 2012). Hilton has major limitations such
as accommodation and restaurant facilities are very poor. Whereas competitors are providing
wide variety of services to attract more customers. Now, they are planning to increase services
though it would be difficult to gain competitive advantage. To over come with constraints and
boost up productivity and profitably of their business.

2.4 Evaluating different merchandising opportunities for hospitality products and services.
In today's context, merchandising is effecting business overall worldwide. People are
travelling more for both business and recreation process that is increasing business of hospitality
management (Brown and Bessant, 2013). Hilton have very different merchandising opportunities
that are mention below:
 Hilton is providing its product and services according to purchasing power of customer.
Such as more price means, offering high quality of services at is based on purchasing
behaviour of customer. Thus, they are creating more value with premium charges
according to prices charges.
 According to price factor and promotion Hilton is increasing economic condition . It
enables them to increase sales revenue and productivity and also help in achieving good
merchandising advantage.
TASK 3
3.1 Evaluating different pricing and profitability concepts of hospitality operation management:
In the business of hospitality operation management, there are various pricing methods to
determine its product and services. The different pricing methods are cost oriented pricing,
market oriented pricing, service charge, minimum charge etc.. Some of pricing methods adopted
by Hilton are mention below:
Cost oriented pricing: It is one of simplest forms of determining price based on
production cost. Hilton had adapted this method to simply just adjust price to achieve a desired
cost of production. It also help to understand and implement in hospitality industry.
Marketing oriented pricing: A market based pricing method that help in building
product features such as advertising to attract more customer towards products. Hilton has
adopted marketing oriented pricing to deal with ideal cost for customer and remain competitive
in market.
Service charges: Service charges on hospitality industry apply a fixed percentage
mandatory service charge on certain revenues(Bowie, Buttle, and et.al., 2016). It pay for work
the person comes and serves you product and services. Hilton has ascertain certain fixed charges
according to product are services they are offering to their customers.

Hilton has adopted service charges pricing method, because these charges are charge
according to services offered by them. They have fixed certain amount in their services offered
to their customer. Further, they have special charges on high quality of services according need
and demand of customer.
The cost oriented and market oriented pricing is being not applied by Hilton, as theses
pricing and profitability method are more focused on advertising product and cost of
production. They are focused on providing services of better quality.
3.2 Assessing factors which is affecting revenue generation and profitability on hospitality
operations
There are various factor that are affecting revenue generation and profitability in hos
operation management. Some of revenue affecting factors are sales mix, customer turnover,
amount of spending power of an organisation. Where as different profitability factors are labour
intensity, shelf life, portion control, standardisation and elasticity of demand. In context to Hilton
, they are discussed below:
Basis Elements to be consider Observation
Elasticity of demand Demand and price of products. In Hilton, price of demand is
inelastic in nature. which indicates
change in demand of customer is
less than change in price of
product and service.
Standardisation Royal customers, menu selection,
sanitary issue etc.
Hilton, maintains high
standardisation in menu selection
and proper sanitary hygiene for
royal customer. It also attract
more customer from their
standardisation product and
services.
Shelf life Emphasizes on number of
customers, value of brand name,
degree of customer satisfaction,
Hilton, is coming up with new
and attractive product and services
to satisfy their customer. To have

positive initiatives taken by
management.
good value brand among
customer by various initiatives
taken by management to increase
their sales and profit.
Labour intensity Amount to be paid for labour
charges.
Hilton, use amount of capital is
much less than use of labour
charges. Thus, Hilton are labour
intensive in hospitality industry.
The above mention point are affecting sales and revenue generation of Hiltion. Such as
they emphasizes more the standardization and shelf life in providing better quality of services to
meet up to the expectation of customer. Further, it leads to increase labour intensity as well as
leads to charges high price according to demand
TASK 4
4.1 Ranges of performance measure and appraisal techniques to individual aspect of hospitality
operations
A performance appraisal is a systematic techniques that assesses an individual
employee's job performance and productivity in relation to certain criteria of organisation
objectives (Mok, Sparks and Kadampully, 2013.).Hilton has adopted this techniques on service
cost of product and quality of services are offered to their customer. To understand pros and cons
of operation system. some of techniques to measure overall performances are discussed below:
Quality management: In this process of quality management , Hilton need to analyses
overall service and product quality of its products that are offered to their customer. They also
need to determine various to improve it qualities by proper implementations of management
principles.
Developing qualitative and quantitative data: Hilton, need developing qualitative and
quantitative data to measure over all performance in operational area. Such as service quality,
customer satisfaction, customer reliability etc.. In quantitative data customer per week arrived,
products of pricing as compare to competitors and number of visit of royal customers. Further,
on these basis they can accomplish appraisal of their employees.

Data analysis and evaluation: From various quantitative and qualitative data Hilton can
analysis their data earlier and compare with expected performance in future. In this way they can
evaluate performance of their hospitality.
Sales performance: In an organisation it is one of important technique to measure
performance of sales and revenue in business. Hilton has adopted this techniques, to know their
sales performance in weekly, quarterly, yearly basis. To know their performance and gross profit
of their business.
4.2 Usefulness and limitations of various quantitative and qualitative appraisal techniques and
their application to hospitality operations.
Quantitative methods use number for interpreting data where as qualitative
techniques is detailed in description of situations, events, people, interaction as well observe
behaviour of employees in organisation. In organisation, sometimes these appraisal
techniques are run on based on sample data which sometimes cannot be treated as true or
effective performance measurements. Such as quality of services of product, attitude of
employees are different from each other, quality of employees are consider in quantitative
approach.
The main motive of qualitative approach results out in analysing are not applied in
wider range of population. Hilton, seems very delicious to average customers. It varies from
customer to customers according to need and demand of quality of they need in products
and services that are being offered. Thus, some of quantitative and qualitative techniques
that are not so useful in measuring performance appraisal of employees in hospitality
operation management.
4.3 Application of approaches to evaluating and planning appropriate to hospitality operations:
In hospitality operation management, it become very difficult to consider different
approaches for operation of hospitality business. Such as services or facilities offered, catering
as well as accommodation and demand for generating sources. Hilton has adapted major
approaches foe evaluating and planning appropriate hospitality operations. The approaches are
determined below:
Business analysis: Business analysis is an approach of identifying business needs and
determining solution to business problems. It consist of improvements, organisational changes
or strategic planning and policy development. This approach helps Hilton, in analysing needs