Critical Evaluation Of Hyatt International Hotel Company In The Present Scenario

Overview of Hyatt International Hotel Company

Discuss about the Management innovation in the hotel industry.

Doing business in the present world is becoming tougher each day owing to various factors like advancement in technology, globalization and changing needs of consumers. The hotel industry in particular faces stiff competition mainly due to increased mobilization of people. In these hard times, the role of managers becomes even more crucial in ensuring consistent success for the company.

The present report aims to provide a critical evaluation of the present scenario concerning hotel companies with particular focus on Hyatt International Hotel Company. The report will begin with an overview of Hyatt followed by an analysis of the competition facing hotel industry. Further, it will shed light on the concern managers are facing today to enhance guest experience in their hotels. In addition, the global trends that affect consumer behavior in choosing hotels will be focused as well. Recommendations for the Hyatt shall also be provided in order to tackle the growing competition.

Jay Pritzker founded the Hyatt Hotel Corporations in 1957 in Los Angeles, USA. Within a decade, jay Pritzker, along with his brother Donald Pritzker expanded the hotel’s operations and in 1968, the Hyatt International was formed (“Hyatt History”, 2018). Today, it boasts of over 800 properties in 52 countries across the globe with more than 550 in US alone. Services provided by Hyatt include luxury hotels, resorts and spas, unique stay experiences in historic landmarks, urban gems and others. Currently, the corporation has a total market share of 3 billion dollars in US alone (Nasdaq.com, 2018). In regions of Asia Pacific and South Asia, the corporation has a good performance record. A look at the increase in its revenues in the last decade further confirms the company’s good performance. The revenues generated in 2016 stood at 4.43 billion dollars, a 100 million dollars increase compared to previous year (Statista.com, 2018) (See Appendix A). These stats reveal that the corporation has managed its business successfully over several decades.

However, the recent years have seen an evident decline in the corporation’s profit probably due to consistent slides in the international market. In spite of these short-term downfalls, the corporation believes that it will continue to expand and grow.

The hotel industry in the present day faces tough competition with new brands emerging and traditional brands transforming to meet new age demands. Hotel franchisers like Airbnb and other boutique hotels have further increased the competition for luxury hotels like Hyatt (Zervas, Proserpio & Byers, 2017). Airbnb introduced an innovative platform for customers especially travelers to have a homely feeling away from home by staying with people in their own homes. This unique concept became popular overnight and posed a great threat to the already established luxury hotels. Nieves and Segarra-Ciprés (2015) define competition in the hotel sector as the contest between brands. The author further argues that political and economic changes within the last few decades had triple-folded the competition within this sector. Hotel giants like the Hilton group, the Marriot International and Starwood Hotels and Resorts amongst others are coming up with strategies like least cost for maximum comfort (Nasdaq.com, 2018) (See Appendix B).

Competition facing hotel industry

In this age of technology where consumers are getting everything they desire within an affordable range, luxury hotels are coming up with unique features to lure and keep customers. Hyatt Corporations have been in the industry for more than six decades and each year they have come up with newer ways to attract travelers.  In order to stay ahead in the competition, the company has utilized technology to the maximum by introducing apps like Hyatt Event Concierge App. The growth in the number of repeat customers has seen a rise of 125% as per the company statistics that demonstrates the success of strategies employed. Apart from that, the ‘World of Hyatt’ platform that began in 1987 providing easy access to guests worldwide continues to provide impetus to company revenues (“World of Hyatt”, 2018).

Hyatt Corporation is known for its outstanding guest services everywhere in the world. The company operates brands like Park Hyatt, Grand Hyatt, Hyatt Regency and Andaz amongst others.  All these names resonate to the grandeur and luxury associated with the company. However, changes in the needs of customers are unpredictable and hence must be assessed continuously. The manager has to be on his toes to come up with new plans and innovative ideas to stay a step ahead always.  

Starting from the search for hotels to the booking, checking out, everything has been customized, and digitized. Hyatt Hotel Corporations is up to date with the changes taking place in the industry and it has devised and implemented various strategies (Liu etal., 2014).

The first thing managers have done is to ensure completely satisfied guest experience by providing seamless service. Seamless service refers to the services that are received by guests without any flaws at any level (Edition.cnn.com, 2018).  

Hyatt is known for providing exceptional personalized services to its customers. These include direct interactions with guests by hotel executives, fulfilling customer needs prior to their visit with the help of technology and catering to customer needs irrespective of time and place (Xie, Zhang & Zhang, 2014).

Hyatt managers realize the value of the brand and hence they have employed unique strategies to do brand marketing (Huang & Sarigollu, 2014). The company shelters and maintains brand value while articulating particular business needs of operations.

Another strategy applied by Hyatt is coordinated marketing initiative. It gives advantage to a subset of resorts and hotels and to regional programs as well (Warnaby & Medway, 2013). As per this strategy, the revenues earned by Hyatt Regency are shared by the subsets and thus enhances the corporation’s overall business.

Concern managers facing in enhancing guest experience

Hyatt also has a unique strategy to do field marketing that allows managers of respective hotels to market for their individual property (Kownatzki et al., 2013). By utilizing the business requirements, targets and issues of the individual property, the managers assist in enhancing the company’s brand value.

Businesses today are exposed to the opportunities and challenges of technology and the rise of internet. The customer-client relationship has reached new heights where the customer can now directly interact with the client. This unfathomable reach of technology and the internet also influences hotels like Hyatt. In addition, customers have become more aware about environmental degradation and hence they scrutinize the services provided by hotels. Owing to this, managers have now become more careful not to include anything that could cause any potential harm to the environment. In addition, people have also become stricter in their response to environmental degradation by big companies in order to succeed and sustain in business. This has led to firms adopting the Corporate Social Responsibility policy (Kumar, 2014).

The impact of globalization cannot be ignored as well because it has led to diversification of businesses. The recent trend visible globally is the intermixing of cultures and traditions and the growing acceptance of long neglected communities. Due to this, people have become more critical of companies that show even signs of hostility towards any race or community. Political and economic changes in the world are also affecting consumer behavior. The increasing influence of the social media and customers’ dependence on these platforms has reshaped their perspective about business. Negative campaigns that target big firms are sometimes easily accepted b customers thus affecting business.

Another trend that has reshaped the way consumers purchase a product or service is the ease of financial transactions. This trend is attributed to the integration of technology. The trend has even provided opportunities for the B2Bs to thrive. Offering special cards like World of Hyatt in case of Hyatt Corporations shows the mold in strategy by companies to meet changing consumer behaviors.

To a well established and reputed brand like Hyatt, very little could be recommended that would contribute to its continuing success. However, businesses must not be satisfied with success, they must thrive to achieve more and be consistent in providing customers with the best experiences.

• It is recommended that the company managers must assemble the franchise. They should elevate the brand name because it reverberates with the customers.
• It is also recommended that the Hyatt Corporations must boost customer value because the present day customers expect each of their pennies to be worth spending.
• Further, managers at Hyatt should focus more on their operational quality to make sure that the customers do not face any break throughout their stay.
• Managers should incorporate personalized services at an advanced level where customers do not have to search for their needs.
• In addition, it is also recommended that the hotel should have a separate program for customers where they could be a part of something noble; like a fundraising activity or event.

Conclusion

To conclude, it ca n be stated that factors like changing trends in the world, technological advancements and globalization have had a great influence on the hotel industry. The Hyatt Hotel Corporation, a name that is synonymous to grandeur and luxury, also faces threats owing to these factors. However, managers at Hyatt must be well aware of these facts and are capable enough to meet the challenges. The given report tried to provide an overall scenario of the hotel industry by evaluating the performance and strategy of Hyatt. Further, the report presented an analysis of the changing trends in the world and the ways these affect consumer behavior. The report provided recommendations to the managers at Hyatt that could be followed to ensure consistency in success. However, it is suggested that further readings on the performance of the company and its chief competitors be carried out extensively for deeper insights.

References:

Edition.cnn.com. (2018). World’s most luxurious chain hotels. CNN Travel. Retrieved 20 March 2018, from https://edition.cnn.com/travel/article/luxury-chain-hotels/index.html

Kumar, R. (2014). Corporate Social Responsibility-A study on hotel industry. Asian Journal of Multidisciplinary Studies, 2(4).

Nasdaq.com. (2018). Hyatt Hotels Corporation (H) Stock Report – NASDAQ.com. NASDAQ.com. Retrieved 20 March 2018, from https://www.nasdaq.com/aspx/stock-report.aspx?symbol=H&selected=H

Nieves, J., & Segarra-Ciprés, M. (2015). Management innovation in the hotel industry. Tourism Management, 46, 51-58.

Statista.com, R. (2018). Hyatt Hotels: revenue 2016 | Statistic. Statista. Retrieved 20 March 2018, from https://www.statista.com/statistics/257362/revenue-of-the-hyatt-hotels-corporation/

Zervas, G., Proserpio, D., & Byers, J. W. (2017). The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research, 54(5), 687-705.

Xie, K. L., Zhang, Z., & Zhang, Z. (2014). The business value of online consumer reviews and management response to hotel performance. International Journal of Hospitality Management, 43, 1-12.

Liu, W., Guillet, B. D., Xiao, Q., & Law, R. (2014). Globalization or localization of consumer preferences: The case of hotel room booking. Tourism Management, 41, 148-157.

Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer, New York, NY.

Warnaby, G., & Medway, D. (2013). What about the ‘place’in place marketing?. Marketing Theory, 13(3), 345-363.

Kownatzki, M., Walter, J., Floyd, S. W., & Lechner, C. (2013). Corporate control and the speed of strategic business unit decision making. Academy of Management Journal, 56(5), 1295-1324.