An Analysis of Hospitality Operations Management at Hilton Hotels

This report provides a comprehensive analysis of hospitality operations management, focusing on the case study of Hilton Hotels and Resorts. The report begins with an introduction to hospitality operations management and then delves into various aspects of Hilton's operations. It analyzes the nature of hospitality products and services, customer profiles, and the factors influencing demand and average spending power. The report then explores the key stages of product and service development, the factors affecting customer perception, and merchandising opportunities. Pricing strategies, revenue generation, and profitability are also examined. Finally, the report applies performance measures and appraisal techniques to evaluate hospitality operations, including both quantitative and qualitative methods. The report concludes with a summary of the key findings and provides references to support the analysis.

Hospitality Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
AC1.1: Analyse the nature of hospitality product and service areas......................................1
AC1.2: Evaluate the different influences affecting patterns of demand within hospitality
operations...............................................................................................................................2
AC1.3: Compare customer profiles and their differing expectations and requirements in
respect of hospitality provision..............................................................................................2
AC1.4: Analyse factors affecting average spending power (ASP) in hospitality businesses.3
AC2.1: Evaluate the key stages in product and service development applied within a
hospitality operation...............................................................................................................3
AC2.2 Analyse the features which contribute towards the customers’ perception of products
and services............................................................................................................................5
AC2.3 Assess the opportunities and constraints affecting product and/or service development
within a hospitality environment............................................................................................5
AC2.4: Evaluate different merchandising opportunities for hospitality products and services..6
TASK 2............................................................................................................................................7
AC3.1 (a) Evaluate different methods of pricing taking into account additional pricing
considerations.........................................................................................................................7
AC3.1 (b) Which of these methods is not applicable in selected organisation and justification 7
AC3.2: Assess the factors which affect revenue generation and profitability in hospitality
operations...............................................................................................................................7
TASK 3............................................................................................................................................8
AC4.1 Apply a range of performance measures and appraisal techniques to individual aspects
of hospitality operations, the product and the whole operation..............................................8
AC4.2 Determine the usefulness and limitations of the various quantitative and qualitative
appraisal techniques and their application to hospitality operations......................................9
AC4.3 Apply approaches to business analysis, evaluation and planning appropriate to
hospitality operations..............................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

.........................................................................................................................................................1

INTRODUCTION
Hospitality operations management refers to a process which deals in the industry
providing services. It helps in developing skills and providing proper training to people working
in hospitality sector like hotels, resorts, tourism sector etc. By proper training, people are
provided knowledge about how to manage the different areas included in hotels like front desk
operations,food, housekeeping etc (Alexakis, 2011). This report discusses about Hilton Hotels
and Resorts. It is a global brand which has its hotels all over world. The company was founded
by Conrad Hilton. Basically,report is going to discuss about nature of services provided and
factors influencing their demand. Also,involving key stages, opportunities and different pricing
strategies affecting hospitality industry.
TASK 1
AC1.1: Analyse the nature of hospitality product and service areas
Hospitality industry is considered as a wide portion of services industry which involves
services like travelling, event planning, accommodation, transportation etc. Main objective of
this industry is to provide high class services to the customers in order to satisfy them at high
level. In relation to Hilton Hilton, this company belongs to hotel industry which offers different
services like conferences, accommodation, room services, entertainment and banqueting etc. It
can be said that operation manager of Hilton Hotel is required to perform various job roles in
within the hotel in order to meet satisfaction level of its customers (Bartram and Dowling,
2013). For this, operation manager of this Hotel is mainly focusing below described as below: Tangible- It is considered as those services which which can be seen or felt by
individuals. It can be said that tangible services in hotel includes room services facility,
appropriate infrastructure, well managed dining space area etc. In context to Hilton Hotel,
the company is availing best tangible services to its customer in rooms as well as other
areas. For example: Hilton Hotel is providing effective services like air conditioner, room
services etc. to its customers which attracts them to remain loyal with the company for
longer period. Intangible- Intangible services are not visible as they can only be felt by the customers
or the user. In relation to hotel industry, Hilton hotel offers variety of intangible services
to its customers like conferences, banqueting etc. to its customers.

 Perishable- This refers to those products or services which might spoil quickly, in
relation to the hotel industry this terms is basically used for food and beverages which are
offered by hotel to its customers. It is required by operation manager of the Hilton Hotel
to avail high quality food services to its customers so that they can eat healthy food.
Along with this, kitchen staff of company is preservative like refrigerator in order to
secure perishable products for longer period of time. For example: Hilton Hotel is
providing vast range of food and beverages to its customers in order to avail all kind of
food to the customers along with the taste.
AC1.2: Evaluate the different influences affecting patterns of demand within hospitality
operations
Operational activities of every organisation is directly influenced by different factors
which are related to that segment. In relation to Hilton hotel, operational activities of this sector
has its dependence over various kind of factors such as living scale, economic factors, time of
duration etc. Some of the essential factors which are related to the operational activities of the
company are described as below:
Healthy Living: Lifestyle of products/services which are offered to the customers
generally influences their interest towards the organisation as they feel attracted to best class
services, Seasonality: Season belongs to the peak time when customers often visits hotels during
their travel to other places rather than domestic place (Bharwani and Butt, 2012). In
relation to Hilton Hotel, management staff of the hotel prepares themselves during peak
season so that they easily manage excessive footfall of the Hotel. Effective services of
Hotel in peak season influences customers towards it.
 Regional and ethnic influences: Regional and ethnic connection of the place also attracts
customers towards availing services of Hotel. For example: If a Hotel includes regional
touch in its interior then it will attract huge number of customers towards it.
AC1.3: Compare customer profiles and their differing expectations and requirements in respect
of hospitality provision.
Hospitality sector gives high preference to its customers in order to make them feel
satisfied. It can be said that every customer has different needs and their satisfactory criteria

totally depends upon it. In relation to the customer zone of hotel, its customers categories on the
basis of their income and services.
For example: Customers who belongs to middle class segment their initial need is to
attain nominal services which does not cost much to them. These customers only feels attracted
towards low cost areas where can satisfy their requirement on some set comprise manner.
In context to Hilton Hotel, the company is mainly targeting high class people. For this,
management team of this Hotel is availing quality and premium services like private swimming
pools, bathroom, theatre area where customers customers can experience personalise experience
(Causin and Ayoun, 2011). These special services of the hotel attract high class customers as
they feel satisfied their.
Apart from this, customers profile can also be differentiated on the basis of meals
experience as might feel satisfied to that place where they get variety of food which will satisfy
them at high range. Here, it has been analysed that high class customers gives higher priority to
variety of food like continental, Mexican and many more. These people easily gets raedy to pay
high amount of money on the variety of food. On the other hand, middle class customers gives
more preference to the quality of food.
AC1.4: Analyse factors affecting average spending power (ASP) in hospitality businesses.
Average spending power refers to the amount of money an individual can spend on an
average basis over a period of time. The various factors that affect spending power of an
individual are as follows:
Size of income- Spending power of any individual is entirely based upon his income
sources. If the income of a consumer is high , his spending capacity will also be high and vice a
versa.
Social and cultural influences- As per income, the preferences of customers also varies.
For example, the lower income earning sector tends to save more amount for future benefits,
rather spend it in such lavish holidays etc. So, Hilton addresses this issue by providing better
facilities to low income groups at discounted rates.

AC2.1: Evaluate the key stages in product and service development applied within a hospitality
operation.
Every industry is required to develop themselves develop their products and services
according to the changed market. This helps them in increasing their sustainability at market
place as highly developed services attracts customers and persuades them to use it effectively. In
relation to Hilton Hotel, its operation manager is continuously focusing on developing its brand
image of its services among customers in order to influence their interest towards it. This hotel is
offering luxury and premium services to its customers (Crawford, 2013). Along with this, the
operational manager of the hotel is providing some value added services to its customers like
pick and drop service from airport in order to make the customers feel comfortable and relaxed
during their travel. In this regard the hotel gets indulge in some stages which helps them in
developing their products and services. Some of these stages are described as below: Idea generation- In this stage, idea for developing the new develops from various
sources like employee, customers, changes and trends in market, competitors etc. In
relation to Hotel, it can be said its important for Hotel industry to analyse the current
market in order to understand that whether it is valuable for company or not. Idea screening- At this stage, after collecting variety of ideas main objective of the
company is to understand which is good or feasible for the organisation. It can be done
by matching it with organisations strength, weakness, affordability etc. Concept development and testing- After screening, idea has now converted into the
concept which is forwarded for the testing criteria in order to check that whether it will
go in future or not. It also tells about some core areas which can be modified after testing
procedure. Business analysis- In this stage, overall finalised concept is now evaluated in order to
check whether the selected concept is beneficial for the organisation or not (Ferdinand
and Kitchin, 2012). Here, the concept is also evaluated meeting it with customers need
and demands. Product development- At this stage, mainly the company shifts finalised concept to
research and development department in order to modify it according to the customers
expectation.

 Test marketing- Here, after product development company generally focuses on testing
the product at market place in order to check whether it is beneficial for the company at
market place or not in terms of monetary benefits. This stage also helps company in
understanding needs and requirement of customers as well. Commercialisation- This stage arises after launching of the product at market place. In
this stage, operation management team of company focuses on making strategy, targeting
its customers, finalising area for launch etc.
 Launch- At this stage, finalised product is finally launched into the targeted market for
its potential customers in order to aware people about the product. It is basically done
through an event or activity for grabbing attention of the customers.
As per the above stated overall stages of product development it can be said that Hilton Hotel
can use this product development process in order to achieve its targeted goals and objective.
AC2.2 Analyse the features which contribute towards the customers’ perception of products and
services.
Perception of customers is directly affecting sales of the company as if perception and
thoughts of customers are not positive towards the company then they will not be able to survive
in the industry for long duration (Lashley, 2012). In relation to Hilton Hotel, perception of its
customers mainly deals in various segments which are illustrated as below: Standardisation and space utilisation- Perception of customer also depends on
designing of Hotel, interior decoration, products and services, utilisation of space etc. this
attracts customer of the hotel as they feel more relaxed in the open and spacious area. As
a result, it contributes in increasing number of customers for Hilton Hotel. Service quality- Quality of products and services also influences interest of customers
and makes perception of company in their mind. I relation to Hilton Hotel, operation
management of the company offers high quality services to its customers which
formulates an effective perception of the hotel among customers (Sigala, 2013). As a
result, it influences huge number of customers towards the Hotel.
 Brand image- Customers have different perception for hotel industry, its services, values
etc. In relation to operational manager of Hilton Hotel mainly focuses on building its
brand image among customer with high quality service in order to influence them to

remain loyal for long duration of time. This will also help hotel in enhancing its
command over customers with mouth publicity.
As per the above mentioned factors which impacts over perception of customers it can be
said that all of them are important as they influences interest of customers towards the services of
hotel and persuade them to use it.
AC2.3 Assess the opportunities and constraints affecting product and/or service development
within a hospitality environment.
Every business organisation essentially seeks for the better opportunity which helps them
enhancing their business at market place. It can be said that there are numerous factors which
have their influences the growth of the company. In relation to Hilton Hotel, it can be said that
there are numerous factors which influence growth of the hotel and might result in decline of its
services as it impacts negatively over its sales. Hilton Hotel is giving special preference to its
customers which impacts positively over the growth of the company. This hotel is offering
personalised services to the customer which makes them relaxed and attached as a result it
improves their level of satisfaction (Sunder, 2013). Its defective services directly differentiate
them from rival organisation belongs to similar sector. This contributes in gaining competitive
advantage and contributes in the enhancement of more number of customers. As a result, it
increases profitability of the company
Apart from this, it is considered as the responsibility of the operation manager of hotel to
analyse external market and find out real expectation of the customers. This help them in
developing new effective services that will own all the factor that contribute in satisfying
customers at higher extent.
AC2.4: Evaluate different merchandising opportunities for hospitality products and services.
Merchandising is an activity which is used by an organisation to promote sale of their
particular products especially by its presentation. It includes pricing, design, display, techniques,
ascertaining quantity of the products. In hotel industry, it refers to a process of identifying
customer preferences to deliver services in a way that influence it's visitors in raising demand of
their hotel. In context of Hilton, it essential for it's managers to increase it's brand image and
stake in a competitive business environment.
By the use of technology, most of the hotels is providing online room booking services to
their customer which will helps them in building a healthy communication environment with its

customers (Tsang, 2011). It is essential for the chosen organisation Hilton, to analyse needs of
it's customer and provides them good services which will help them in building a good brand
image in a dynamic business environment. It will also help Hilton in achieving customer
acceptance at the time of it's expansion. There are various types of merchandise services with
which hospitality industry can be indulged.
Digital Merchandising:
It is a vital part of e- commerce business where shopping is done through online or digital
stores. It guides the consumers about what to purchase and what not to purchase.
TASK 2
AC3.1 (a) Evaluate different methods of pricing taking into account additional pricing
considerations
Pricing is a strategy used by companies for finding out the selling price that is to be set by
the firm. It is determined after calculating the costs incurred by the firm in the production. The
different methods of pricing used in HILTON hotel are:
Cost oriented pricing- This pricing method is used by Hilton hotel in which the
management determines the selling price of different products after a profit percentage is added
in the costs incurred. The profit percentage is different for different organisations.
Market oriented pricing- Hilton hotel evaluates the price of all similar services supplied
by other prominent hotels present in the market and accordingly keeps the price of its services
after evaluating the features of the services.
Service charge- Every hotel charges a certain service charge. It is basically a fee that
Hilton hotel charges for the services it provides to its customers. The service charge is always
added in the initial bill itself and never taken outside the bill.
Hilton hotel can use Market oriented pricing strategies to determine the prices of the
services provided by it, keeping in mind the competitive market strategies and prices of its
competitors.
AC3.1 (b) Which of these methods is not applicable in selected organisation and justification
From the above explained methods, some methods cannot be brought into practice by
Hilton hotel which are explained as under:-

Cost oriented pricing- This pricing method involves addition of profits to the costs paid
to the producers for the goods supplied by him. This method cannot be applied in this case as
there is no supply of goods rather hotels work on providing services to its customers (Vlachos
and Bogdanovic, 2013). Also, they do not charge any extra amount for maintaining cleanliness,
good and positive ambiance etc. They do it out of a sense of responsibility.
AC3.2: Assess the factors which affect revenue generation and profitability in hospitality
operations
Revenue generation is the basic aim of any organization structure. Every organization or
business concern that starts works with the core idea of earning maximum profits and generating
revenues. The factors which affect revenue generation and profitability in the hospitality industry
are:
Labour intensity- It is a process or an industry which requires extensive amount of
labour or workforce for providing services or producing goods. In hospitality industry, large
amount of capital is required to run a hotel and provide services to the customers. Labour
intensity is decided on the basis of capital involved in providing services to the customers. This
factor enhances profitability ratio of firm as extensive labour can provide effective services to
customers according to their needs.
Shelf Life- Shelf life refers to the life of goods ie the time period during the goods or
services can be consumed by the customer (Vlachos and Bogdanovic, 2013). For example, if a
jam comes with a expiry date after 6 months , shelf life of the jam is expected to be 6 months
which means customer can effectively consume it in those 6 months. This factor affect revenues
of firm as they cannot store products for longer time durations this is because products are
stored according to their expiry dates.
Elasticity of demand- This term is used by business professionals and economists to
measure the change that occurs in the demand of any given product or service when the other
factors keep changing. It can be calculated by the percentage change in the quantity demanded
dividing it by the percentage change in another economic variable This is an important factor as
firm can analyse change in demand factor of customers and accordingly they can sell and store
the products thus enhancing their profitability index..

These are the factors which mostly affect revenue generation and profitability rate in the
hospitality operations and also provide strategies how profits can be increased even if there are
any unfavorable changes.
TASK 3
AC4.1 Apply a range of performance measures and appraisal techniques to individual aspects of
hospitality operations, the product and the whole operationPerformance Management
It is a process of identifying effectiveness of organisational operations to achieve it's
desired goals and objective. It will help the chosen organisation Hilton to improve it's
productivity in a dynamic business environment.
Appraisal techniques
It is an technique used to evaluate performance capability of employees working in an
organisation to achieve a specific goal and objective. It will help Hilton in making it's workforce
efficient and effective.
Quality Management
It used to manage quality of delivered services in accordance with the standard of hotel
management. It will help Hilton in getting customer satisfaction. This will result in enhancement
of booking of hotel room as a result it will increase its profitability.
Qualitative Data
It is a non numerical data which is collected through observation. It is also known as
categorical data. Data or information about anything that stresses more upon the qualities, for
example softness of skin, colour eyes,efficiency of manager etc.
AC4.2 Determine the usefulness and limitations of the various quantitative and qualitative
appraisal techniques and their application to hospitality operations
Comparison of inputs and outputs of employees are termed as quantitative appraisal
techniques. While qualitative techniques are determine to appraise behavioral pattern of workers.
Hilton hotels are implementing numerous qualitative and qualitative techniques on their business
culture to monitor their employees productivity. These techniques can be utilize by a company to
provide reward to their workers and on work forces to give promotions. With the help of these