EVALUATION OF HILTON COMPANY BASED ON PESTLE ANALYSIS OF MARKET ENVIRONMENT

EVALUATION OF HILTON COMPANY BASED ON PESTLE ANALYSIS OF MARKET ENVIRONMENT

 INTRODUCTION

HILTON HISTORY AND BACKGROUND

Hilton worldwide holdings Inc. which was also Hilton Hotel Corporation, is an American based company that manages and franchises several hotels and resorts. It is currently managed and operated by CEO Christopher J Nasseta. The Hotel derived its name from its owner, Conrad Hilton. He first purchased a hotel in Cisco, Texas in 1919 and continued purchasing more hotels in Texas as years passed by. In 1925, Dallas Hilton became the first hotel to bear the name Hilton.

In 1946, Conrad and Co formed Hilton Hotel Corporation which became the first hotel company after the World War 2 to sell stock in New York stock exchange. The Hotel took advantage of the political stability after World War 2 to establish themselves since at that time; most customers valued and found it very important in using lodging services.  In this case, they flourished rapidly and gained a lot of popularity.

. At the time, the country focused on rebuilding its economy after World War 2.

The country at that time was focused in trying to rebuild their economy after the damages of the World War 2. Therefore, the country promoted and supported the Hotel in its quest to grow and in turn, improve the economy.

The hotel benefited from the advancement in technology of that time by improving the quality of services to their customers, for instance, Hilton hotel was the first hotel to install televisions in guestrooms.

Additionally, people at that time were focused on entrepreneurship therefore the hotel received the backing and the support of the society hence, developing immensely.

Hilton hotel as well benefited from the conducive environment at that time where it enjoyed good climate, availability of clean water and good environment free from pollution. These benefits created an enabling environment for the hotel to operate effectively.

In another instance, the hotel benefited from the laws that were set to protect intellectual rights of their company, this idea ensured that they protected its business from duplication by other Hotels, hence the hotel flourished and developed greatly.

HILTON CURRENT CONDITIONS AND CURRENT ISSUES

Current conditions

Apart from the robust growth that Hilton worldwide holdings Inc. has enjoyed over the past years, there are evolving issues that affect its growth and hence its operations as a whole. These issues range from political stability, technological advancements, social factors, economic conditions and legal issues.

Politics has proved to be a crucial factor that hinders the growth of Hilton Holdings. Many countries nowadays want to promote its own Hotels and usually discourage foreign companies from establishing their Hotels. This idea has led to heavy taxes imposed by these countries to the foreign companies resulting to loss of revenues.

Hilton hotel has embraced technology in trying to provide best services to its customers through the use of mobile phones for booking the rooms. Christopher J Nasseta the Hotel’s company CEO promised to improve on its services so that not only can its customers get lodging services but also let the customers have a vocational experience by improving on the overall technology and becoming more innovative.

Competition from other companies has proved to affect the Hilton hotel’s economic growth. Apart from the increasing growth of many other Hotel companies, Airbnb (Air bed and breakfast) is also causing great pressure to Hilton Holdings growth.  Hilton hotel has been working towards ensuring they improve on the basic performance, The Hotel’s CEO stressed about treating its employees like its clients. Happy and satisfied employees will enhance excellent customer service.

Hilton Inc. has been trying to solve issues that concern their markets in Europe. The Hotel enjoy economic growth during the winter as they get many clients but suffer during the summer since most people have left to camp to other countries to enjoy the summer.

Consequently, Hilton Hotel has been trying to lobby with most countries that do not have sufficient legal framework in protecting intellectual property rights. This has been slowing their expansion rate as well as they have lost a lot of resources in their quest of lobbying.

Major problem affecting Hilton Inc.

Competition from other hotels has been their major challenge that they have faced. Other hotels have well developed infrastructure and additional services that attracts their customers more than Hilton hence making it difficult to achieve its objectives.

Also, most countries have set up policies against foreign business hence make it difficult for Hilton hotel to achieve its targets.

Additionally, some countries have bad beliefs about Hotels of Hilton’s caliber as they are used to Airbnb. This case will make it difficult for Hilton Hotel to establish themselves in these countries.

Some countries have discrimination laws which work against foreign Hotels companies. This scenario creates a bad impression to Hilton hotel’s customers hence undermining their growth.

In some countries, governments intervene to sponsor their own Hotels; this reasoning will lead to better prices of such Hotels hence undermining Hilton Hotel thereby resulting to delayed growth.

Countries, in especially in Africa have poor waste management system, Hilton hotel in such countries can be trapped in places where garbage are disposed hence giving its competitors an edge over them.

HILTON HOTEL FACTS AGAINST THE ISSUES

Hilton Hotel has it 13 brands that are well distributed all over the world. It has 4856 hotels worldwide, 4029 in the US and the average daily rates in earnings is 147.22 USD. Hilton Hotel earns a revenue of 8.91bn USD and another 1.48bn USD from owned and lease hotels. The net income for Hilton Hotel worldwide is estimated to be around 0.77bn USD. In 2019, Hilton hotel has been the leading hotel company worldwide with the highest number of properties and guestrooms as well.

Despite the success that Hilton hotel has enjoyed over the past years, Hilton has not manage to effectively market its brands since many hotels nowadays have well developed marketing system hence giving Hilton stiff competition.

Marketing in the current world has been digitized and is conducted online, this has enabled other hotels to market their brands effectively, making it difficult for Hilton to continue enjoying their control in the market.

Also to note, most foreign governments are promoting their local hotels and discouraging foreign hotels, by doing this, they are marketing their local hotels thereby making it difficult for Hilton hotel to establish themselves in these countries.

In some countries, governments may intervene in the local markets thereby improving the economy of such markets; this scenario makes it difficult for Hilton Inc. to market its brands effectively in such countries hence slow growth.

In some other instances, people in some other countries have strong beliefs that foreign hotels are not good and that they believe that conditions there do not suit them hence these people stick to their own local hotels. This idea will make it difficult for Hilton hotel to establish themselves in such hotel despite their many marketing strategies.

Some countries do not have effective legal framework against discrimination. Therefore it will result to some customers lacking respect towards the company’s effort to market its brands; this scenario will bring about delayed growth.

In European countries where there are climate changes, it becomes difficult for Hilton hotel to market its brands effectively because of changing customer’s needs.

SOLUTION AND ADVICE TO THE ISSUE

For Hilton hotel to address their marketability issue effectively, it needs to have social media platforms where they will be able to engage most youth on the quality of service they are offering. Advertising its services on such platforms will increase their customers and therefore more profits.

Also, Hilton hotel should advertise its brands through the use of email marketing an also on televisions so that they can attract new customers to their company.

Hilton should also ensure that it follows the trade regulations when marketing their brands to ensure they respect that country’s laws, this scenario will create harmony with the host countries hence enhancing growth of the company.

In other instances, Hilton should advertise its new prices and offers to customers especially in European countries. This case will prevent them from going to other countries to enjoy the summer and prefer to stay.

Additionally, Hilton hotel should advertise on ways in which they are going to protect their customers and protect the rights and respect the privacy of their customers. This scenario will instill trust to the customers who will in turn be happy and continue using Hilton hotel services.

Finally, Hilton should advertise its brands by reminding and boasting to its customers on its economic prowess across the globe. This idea will attract more customers as most of them would want to taste what Hilton hotel really offers.

IMPLEMENTATION, CONTROL AND RESULT EXPECTATION

The hotel should also ensure it is  leading in digital marketing department by using the latest advertisement tools online such as pay per click (PPC) and search engine optimization (SEO). When customers search for hotels online PPC an SEO enable the search engines to make the Hilton adverts appear at the top hence there is a high chance of such customers to click on those adverts and therefore acquiring new customers. In this case, Hilton Company will be able to increase the number of their customers hence increasing their growth.

The company should also use all the social media platforms such as Facebook, instagram and twitter to advertise its brands and provide updates on how the company is striving to improve the customer experience. Also the hotel should use email marketing by sending commercial messages to its clients as well as a tool for communicating to its customers effectively. Since many youths are nowadays using social media as a source of information, Hilton will attract a lot of customers and also, when using email marketing it builds a good relationship with its customers. This idea will enable them to compete effectively with their competitors hence remaining relevant in the market.

When Hilton hotel advertise its brands by boasting on its success in being able to change the economy in recent years, the hotel will be able to attract new customers as they will be impressed by the hotel’s achievement. This idea will increase the hotel’s customers and subsequently lead to increase in profits.

Hilton hotel should also advertise clearly on the how they would protect and respect the privacy of its customers. The hotel will therefore impress most of its customers and therefore, attract more customers as well as establish trust between the hotel and the customers. This move will drive the company towards success in achieving their goals and targets.

In European countries where there are changes in climate, the hotel should go an extra mile in advertising offers and reduce the prices of their services so as to convince their customers to stay during the summer. This idea will enable the hotel to maintain and retain their customers hence strive towards achieving their goals and objectives.

To enhance their marketability, Hilton hotel should follow the government’s trade regulation in ensuring they comply by the trade regulations of the countries that they have established themselves. This scenario will enable the hotel to market their brands effectively as well as get the backing of the government. The hotel will therefore have an enabling environment to compete effectively and strive to achieve their goals and targets.