Analysis of Hospitality Operations Management for Hilton Group

This report delves into the intricacies of hospitality operations management, using the Hilton Group as a case study. It begins by analyzing the nature of hospitality products and services, including food and beverage, room divisions, and conference facilities, categorizing them as tangible, intangible, perishable, and non-perishable. The report then evaluates the influences affecting demand patterns, such as seasonality, time of day, health trends, and economic factors. Customer profiles are compared based on demographics, socio-economic status, and behavior, highlighting their diverse demands and requirements. The analysis extends to factors affecting average spending power (ASP), including income size, social status, and economic conditions. Key stages in product and service development within Hilton are examined, from idea generation to commercialization. The report also evaluates pricing methods, considering their applicability and impact on revenue. Furthermore, it explores performance measures and appraisal techniques, assessing their usefulness and limitations in hospitality operations. The report concludes with an application of business analysis and planning approaches, offering proposals for action within the Hilton Group.

Hospitality Operations
Management

Table of Contents
INTRODUCTION ..........................................................................................................................1
MAIN BODY ................................................................................................................................1
TASK 1............................................................................................................................................1
AC 1.1: Analysis of nature of hospitality products and services................................................1
AC1.2: Evaluate the different influences affecting patterns of demand within hospitality
operations.....................................................................................................................................2
AC1.3: Compare customer profiles and their different demands and requirements in respect of
hospitality provision.....................................................................................................................3
AC1.4: Analyse factors affecting average spending power (ASP) in hospitality businesses......4
AC2.1: Evaluate the key stages in product and service development applied within a
hospitality.....................................................................................................................................5
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 Hilton Group.....................................................................................................................6
AC2.4: Evaluate different merchandising opportunities for hospitality products and services. .7
TASK 2............................................................................................................................................7
AC3.1 Evaluate different methods of pricing taking into account additional pricing
considerations..............................................................................................................................7
a) Which of these pricing and additional pricing considerations are applicable in your
organisation, and how are they applied........................................................................................7
b) If any of the methods above is not applicable, you must explain the reason why not............8
How does each of these factors affect revenue generation and profitability in your organization
......................................................................................................................................................8
TASK 3............................................................................................................................................9
AC4.1 Apply a range of performance measures and appraisal techniques to individual aspects
of hospitality operations, the product and the whole operation...................................................9

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, making proposals for action..................................................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
The hospitality sector is the part of the travel and tourism industry that involves the
transportation, accommodation and food and beverage related services like hotels, restaurants
etc. It is a very important and major sector of the industry that helps in catering a large number of
people. The hospitality sector will help the firm to have a good range of business operations and
placing of products and services to cater a wide range of customers (Filimonau and Delysia,
2019). For the report, Hilton Group of Hotels is chosen. It is a UK based hospitality firm
providing luxury accommodation service.
The report will cover the nature of hospitality product and services with factors
influencing the demands. The customer profiles with differing expectation and the average
spending power of a customer is evaluated. Key stages in product development and features
contributing towards customer’s perception in hospitality will be analysed. Other than this, the
methods of price taking and revenue generation within a company is been evaluated. Other than
this, the appraisal techniques are analysed with approaches to business analysis.
MAIN BODY
TASK 1
AC 1.1: Analysis of nature of hospitality products and services
The hospitality industry offers a wide range of products and services that are been taken
in the consideration by the selected firm. The products that are been offered may range from the
accommodation services to foods and beverages, along with services such as room divisions,
banqueting and conferencing facilities (Annunzio-Green and Teare, 2018). The products and
services that are been offered may be tangible like the rooms and other luxury products or
intangible like room division, good quality.
The products can be perishable in nature which means that they will be exhausted or
cannot be recovered, once used like food. On the other hand, some products and services can be
in perishable like room services or service quality like if the selected firm serves a low quality
food or have a poor laundry service can ruin the customer perception towards the service quality
of the firm.
The nature of the various divisions of the hospitality or hotel services is as follows:
Food and beverages: This is one of the most important part of the product and services
that are been provided by a company to one’s customer. A good food and beverage service will
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help the organisation to meet its operational goals and developing a good reputation among the
customers. The food and beverage services are tangible in nature.
Room divisions: The room services form the accommodation facilities that are been
offered by a hotel or hospitality firm. This service will help the organisation to handle and
manage the quality of services and earn a good customer satisfaction.
Conference and banqueting: This is the additional service that is been provided by a
hospitality and hotel firm like Hilton Group which is intangible in nature. Similar to the room
services, it helps in generating revenue and customer satisfaction.
All this factors comes into the ranger of the products and services that are tangible, non-
tangible, perishable and non-perishable categories and help in setting a positive perception of
service by the organisation to their customers.
AC1.2: Evaluate the different influences affecting patterns of demand within hospitality
operations
The hotel and hospitality industry deeply affected by the range of influencing factors and
services which are to be considered by a business for formulation of right plans. This factors or
elements will help the organisation to manage the business operations and action plan that will
support the organisation to handle the business operations in an effective manner. Other than
this, the influence of this factors on customer demands will impact the profit and revenue
generation. Some major elements that are been taken in consideration by the hotel and hospitality
sector are:
 Seasonality: The season plays a very important role in deciding the demands and needs
of the customers towards the hotel or hospitality firm. A good and pleasant season will
catalyse the customer base and generation of revenue. On the other hand, a negative
seasonality may lead to the decrease in revenue of the firm.
 Time of Week and Day: This is not a usual factor but lays the influence to the demand
of customers in a hotel or hospitality firm. It is seen that the majority of the demands for
the hospitality services and products are on weekends and in afternoon to evening for
travel, leisure and official meeting purpose.
 Healthy living: The health condition of a person also impacts the setting up of the
demands and requirements of the customer to a greater extent. A healthy and safe
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environment of the hospitality location will help in increasing the customer base for a
hospitality firm.
 Cultural, regional and ethnic reasons: The cultural, regional and ethnic factors are to
be taken in the consideration while determining the requirements and demands of the
customers (Filimonau and Delysia, 2019). This will impact his/her mind set and
perception for the services and products offered by the organisation For example
Christmas and New Year is the major festival in European Countries thus, Christmas will
experience higher rush when compared to other seasons.
 Economic factors: This is one of the major factors that impacts the demands and
purchasing of the products and services from a luxury hospitality and hotel group. Also,
higher disposable income leads to higher economic revenue for business. This will also
influence the quality of products and services that are been taken in consideration by a
firm like Hilton group.
AC1.3: Compare customer profiles and their different demands and requirements in respect of
hospitality provision
A customer profile is the group of the customer base and people that are taken in
consideration by the organisation to manage the business operations and activities in much
effective manner. They are variant on the basis of demographics, economic conditions, region
and other socio physical factors. Hospitality business will have to see through the proper
management of this elements that will help the firm to have a good buying pattern, purchasing
power and credibility. Comparison between some major customer profiles are:
 Demographic: This is based on place or the location of the customer or service buyer to
where it belongs. Their demand may be regarding the nature and behaviour of their
demographic location which varies from one place to another on the geographical
grounds. Thus, impacting and modifying their requirements and needs.
 Socio economic: The social and economic constraints are the factors that will influence
the expectations and demands of the organisation to a greater extent. The person with
higher socio-economic status will be more inclined into using premium services
 Behavioural: This is based on the purchase, spending and general behaviour of a user or
the customer that will help the organisation like Hilton Group to carry out the business
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operations and activities to a greater extent. The firm is required to evaluate the products
and services that are been offered to their customer base (Rangarajan and et.al., 2018).
Besides this, the spending power, type of hospitality firm like a hotel, restaurant, motel
etc also plays a very important role in the setting up of customer’s requirements and operations
in an effective and significant manner. The menu offered or the accommodation services of the
organisation that are been decided by the organisation based on the pricing of services and meal
experience help in setting a positive perception of the organisation.
AC1.4: Analyse factors affecting average spending power (ASP) in hospitality businesses
The Average spending power or (ASP) in a hospitality industry is the ability of extent of
a customer to pay for the products and services that are been offered to him by an organisation
like Hilton Group. It is based on certain factors that are been taken in consideration by the
organisation to manage their customer base:
 Size of income: The size of income that is been earned by an individual that will
motivate him to have the services and thus placing of the services and products to a
greater extent (Bozarth and Handfield, 2019). A good income size will increase the ASP
of a customer of Hilton Group.
 Status: Social Status is the major service that will help the organisation to have a good
amount of ASP from their customers. Besides this, a good social status will make higher
use of premium products and service offered by Hilton Group to a greater extent.
 Social and cultural influences: This factor also impacts the basic ASP of an individual
that will help in setting up of the business operations and activities to a greater extent.
People of higher social and economic status will have the higher demands as compare to
middle class customers. This will help in the setting of the average spending of an
individual over the services that will help him to set his status to meet their higher status
in society.
 Economic factors: the economic issues that are been taken in consideration by Hilton
group to have a good customer base will support the organization to have the customers
with higher ASP. A good economic condition means better extent of purchasing power.
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AC2.1: Evaluate the key stages in product and service development applied within a
hospitality
The product development process within an organisation will consist of different operations that
will help the Hilton group to have a good market share and customer satisfaction level (Vassou,
Zopiatis and Theocharous, 2017). It involves the following steps:
 Idea generation: In this stage, Hilton group will come up with an innovative and new
idea to implement for having a good quality customer service. For example, launching a
mobile application of Hilton Group.
 Evaluation of idea: the idea that is generated is been evaluated to test its feasibility and
effectiveness in service area.
 Concept definition: it involves the services and other measures that will help in the
identification of the potential idea which could be employed by the business.
 Product/service development: at this stage, Hilton Group will see through the creation
of a prototype of product or service and will let it to have a test run to find out its
effectiveness in practical scenarios.
 Market testing: This is based on the feedback or review that is been given by customer,
employees and management after using the products and services. Depending on it,
further changes in product or service are been made.
 Commercialisation: This will involve the steps to set the proper pricing of the product or
service developed by Hilton Group.
 Launching the product: Once the price of the product or service is decided, it is been
launched in market to gain revenue.
AC2.2 Analyse the features which contribute towards the customers’ perception of products
and services
Various features are taken in the consideration that will help the organisation to handle
the business operations and action plans that will help the organisation to meet the demands of
the organisation in an effective way (Liu and Ko, 2018). Some of the features that are been taken
in the consideration are:
 Brand image: It plays a very important role in developing the customer’s perception
towards products and services that are been offered by the firm. As Hilton Group has a
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good brand image which ensures their customer to have a good quality product and
services.
 Nutrition and dietary requirements: This will help the organisation to have a good
customer perception about the food and beverages services that are been offered to the
customer. A good quality food will develop a positive mind set for Hilton Group.
 Disabled Access: The accessibility that will be provided to their disabled customers will
help the firm to have a goodwill for the consumer side and thus will lead to improve the
positive perception towards the company's products and services (Espino-Rodríguez and
Ramírez-Fierro, 2017).
 Availability of resources and style of service: Hilton group is well known for the
availability of wide range of resources leading to the products and services that they offer
to their customers. Besides this, the luxurious methods to deliver or serve the services
improves the customer perception.
 Standardisation and space utilization: This is the maintaining of the quality standard
that are been set by the firm in order to provide high quality products and services that
are offered by Hilton Group to their customers. The appropriate use of space and
standardisation in terms of service delivery will assure better customer’s perception.
AC2.3 Assess the opportunities and constraints affecting product and/or service development
within Hilton Group
Different opportunities and constraints are required to be taken in the consideration by
the organisation that will help the firm to have a good share of business opportunity and
development of the firm (Bharwani and Talib, 2017). Some major opportunities and constraints
that are been taken in constraint by the organisation are:
Opportunities:
 Brand image: Hilton group has a positive brand image around the works to have a good
quality services and products that its offer to its customers. This will help in the positive
growth of the firm.
 Disabled Access and provisioning: Hilton group hotels are well known for providing
the service to physically disable that has earned a good reputation to firm.
Constraints:
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Availability of resources: it is essential for a business to be possessed with ideal
financial, human and technical operations to sustain operations. The lack of workforce
availability with a business can be considered as major constraint to product or service
development.
AC2.4: Evaluate different merchandising opportunities for hospitality products and services
Merchandising is the process which includes the selling or promoting the products that
are been taken in consideration by the organisation to cater maximum number of customers. This
will help the firm to handle the business operations and thus will help the firm to have the
opportunities to sell the products and services (Ramanathan and et.al., 2017).
Various merchandising measures like Digital merchandising, retail merchandising etc
that will help the organisation to have a good share of market pricing etc. The Hilton group will
implement various mechanising opportunity to sell its products and services to its customers.
This will help in effective management of their production and distribution of services.
TASK 2
AC3.1 Evaluate different methods of pricing taking into account additional pricing
considerations
Question 1
a) Which of these pricing and additional pricing considerations are applicable in your
organisation, and how are they applied
Looking at the market conditions and the scale of the operations that are been followed by
Hilton group. The firm will look after the proper management of marketing-oriented pricing
which will help the organisation to carry out the business activities in much effective way. The
market oriented prices is been based on the conditions that are prevailing within a market in
which the organisation is operating. This will help the firm to have a good revenue and thus will
help the organisation to manage the business activities and have a good customer satisfaction
level (Fan and et.al., 2017).
The effective assessment of the market-oriented pricing will help the organisation to
placer and sell down its products and services during the peak seasonality i.e. Christmas and
New Year. The products that will be offered will also have the service charges as the additional
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pricing that will be applied within the organisation. It will be implemented or applied in the form
of packages offered by the firm.
b) If any of the methods above is not applicable, you must explain the reason why not
The remaining pricing and charges like cost-oriented pricing, cover and minimum charge
will not be used within the organisation as this may turn out to be excessive charges that will
impact the business operations of the firm.
Question 2
How does each of these factors affect revenue generation and profitability in your organization
Various factors will lead to the revenue generation and profitability of Hilton Group. They
will have the following implications:
 Labour Intensity: The good strength of workers will help the organisation to have a
good operational functionality and meeting of the operational capacity of organisation.
This can be said that a good labour class will help the Hilton group to carry out its
business operations in much effective way. Thus, it will lead to the rise in revenue
generation of the firm (Masa’deh and et.al., 2017).
 Shelf Life: Having the products with an effective and prolonged shelf life will help in the
effective planning of business operations and activities. Providing the product to the
customers with a longer shelf life will improve the customer satisfaction level and
profitability of the organisation.
 Elasticity of Demand: Elasticity in demand is referred to change in demand due to price.
The good amount of demand that is been followed by the organisation will help the
Hilton Group. A good rise in the demand can be achieved with lowering prices down
which will influence profitability of the company as well.
 Standardisation: The selected firm is well known for the effective delivery of the high-
quality business operations and action plan to have better customer satisfaction level. A
good customer satisfaction level will help in improving of the revenue generation of the
firm.
 Price: As the Hilton Group is a high-end organisation that offers the products and
services to its customers. Providing them at nominal cost will help the hotel to enhance
the business of the organisation in more effective and significant manner.
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 Procurement: It is the process of supplying the good service to the customer in order to
have the better management of their requirements and having a positive satisfaction level.
 Portion control: this will help in the proper growth and management of the portion of
service that is been offered to the customer.
TASK 3
AC4.1 Apply a range of performance measures and appraisal techniques to individual
aspects of hospitality operations, the product and the whole operation
The performance measures are the standards or criteria that helps the firm to analyse the
growth rate of their employees. Various performance measures are being taken in the
consideration by Hilton Group to improve the quality of products and services that are been
offered by the firm (Lugosi and Jameson, 2017). Some of the major measures that are
implemented at the firm are:
 Quality Management: This will help in setting up of the effective measures that will
help the firm to carry out the business operations and thus will help in the suitable
growth and development of the firm.
 External comparison: This will lead to the assessment of the firm with any other
department or organisation that will help in suitable rise in the placing of the appraisal
techniques that will assist the organisation to improve its product and service quality.
 Speed of Delivery/ Customer Service: This will help in the improvement of the
customer satisfaction level develop an effective growth and development along with the
customer satisfaction level for the Hilton Group.
AC4.2 Determine the usefulness and limitations of the various quantitative and qualitative
appraisal techniques and their application to hospitality operations
The quantitative technique involves the proper assessment of the performance through
the analysis of the work report and other documents of an employee while the qualitative
techniques involves the assessment of the work or task performed by an individual employee at
the work place.
The qualitative and quantitative appraisal techniques have a wide range of usefulness
such as they help in the setting up of the feedback and improve the product and service quality.
9

Besides this, it will help the organisation to assess the needs and requirements of their consumer
and assess the products and services accordingly (Kandampully, Zhang and Jaakkola, 2018).
On the other hand, the major limitation of this measures and functionality is that it does
not provide the complete details and clarification of the needs and requirements. The data that is
been collected cannot be relied completely and hence this will help in proper management of
hospitality operations.
AC4.3 Apply approaches to business analysis, evaluation and planning appropriate to
hospitality operations, making proposals for action
Business analysis is the process that will help an organisation like Hilton group to
assess the effectiveness of their business operations and thus will help in the proper
management of their business activities by suggesting solutions to their problem.
Business evaluation is the procedure that will be used to estimate the economic value for
an owner’s interest in the business related to the hospitality firm like Hilton Group.
The business planning is the activity to determine the sustainable goals and operations
and setting out the proper procedure to achieve them by Hilton Group.
The proper assessment of all these factors will help in the setting of an effective goals
which will help in the revenue generation of the firm and support the production of the effective
policies and action plans that will help the firm to have a sustainable growth and development
(Sheehan, Grant and Garavan, 2018).
CONCLUSION
On the basis of the business operations that are been followed by the selected firm this
can be said that the hospitality firm has a vast range of operations. The assessment of
components of hospitality firms and their contribution to the growth and development is been
analysed with the opportunities and constraints of the factors affecting the business are been
discovered. Other than this, various pricing methods and their implications leading to the
development of a new pricing strategy is been analysed. Apart from this, the business appraisal
measures and approaches of business analysis, evaluation and planning is made for the proper
assessment of the growth factors of the firm.
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REFERENCES
Books and journals
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Bharwani, S. and Talib, P., 2017. Competencies of hotel general managers: A conceptual
framework. International Journal of Contemporary Hospitality Management. 29(1).
pp.393-418
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MANAGEMENT.
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outsourcing. An approach based on competitive advantage. International Journal of
Contemporary Hospitality Management. 29(8). pp. 2006-2026..
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critical review. Tourism Management. 71. pp.234-245.
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behaviour and firm performance: empirical evidence from UK retail sector. Production
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Sheehan, M., Grant, K. and Garavan, T., 2018. Strategic talent management: A macro and micro
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Vassou, C., Zopiatis, A. and Theocharous, A.L., 2017. Intercultural workplace relationships in
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