Service management and quality of service is very important especially in hospitality industry as it helps to set standards of services offered to the customers (Erdem and Jiang, 2016). This paper is the analysis and discussing the services management strartegy of Hilton Hotel.The service strategy for Hilton Hotel is to provide the best quality services to keep its customers. Quality management is a factor that is controlled by the organization that aims at meeting quality standards.
Hilton Hotel & Resort is a global hotel chain brand under the flagship name Hilton. By the end of 2017, Travel magazine reported that the brand operated more than 570 hotels in over 85 countries. They are among the oldest group of hotels operating in 6 continents where the properties are managed by, owned by or franchised by independent hotel operators. Founded in 1919 by Conrad Hilton, the group of hotels targets both business and leisure travelers. It also has a loyalty program ‘Hilton Honors’, where some of its loyal customers are offered services at discounted rates(Komppula, 2014).
HILTON WORLDWIDE HOLDINGS INC (HLT) CashFlowFlag INCOME STATEMENT |
||||||
Fiscal year ends in December. USD in millions except per share data. |
2013-12 |
2014-12 |
2015-12 |
2016-12 |
2017-12 |
TTM |
Revenue |
9735 |
10502 |
11272 |
11663 |
9140 |
9533 |
Cost of revenue |
3877 |
4019 |
4065 |
4048 |
1286 |
1363 |
Gross profit |
5858 |
6483 |
7207 |
7615 |
7854 |
8170 |
Operating expenses |
||||||
Sales, General and administrative |
748 |
491 |
611 |
616 |
434 |
429 |
Other operating expenses |
4001 |
4282 |
4823 |
5158 |
6048 |
6225 |
Total operating expenses |
4749 |
4773 |
5434 |
5774 |
6482 |
6654 |
Operating income |
1109 |
1710 |
1773 |
1841 |
1372 |
1516 |
Interest Expense |
620 |
618 |
575 |
587 |
408 |
411 |
Other income (expense) |
209 |
55 |
298 |
1 |
-34 |
28 |
Income before taxes |
698 |
1147 |
1496 |
1255 |
930 |
1133 |
Provision for income taxes |
238 |
465 |
80 |
891 |
-334 |
-312 |
Net income from continuing operations |
460 |
682 |
1416 |
364 |
1264 |
1445 |
Other |
-45 |
-9 |
-12 |
-16 |
-5 |
-5 |
Net income |
415 |
673 |
1404 |
348 |
1259 |
1440 |
Net income available to common shareholders |
415 |
673 |
1404 |
348 |
1259 |
1440 |
Earnings per share |
||||||
Basic |
1.35 |
2.04 |
4.26 |
1.06 |
3.88 |
4.5 |
Diluted |
1.35 |
2.04 |
4.26 |
1.05 |
3.85 |
4.46 |
Weighted average shares outstanding |
||||||
Basic |
308 |
328 |
329 |
329 |
324 |
314 |
Diluted |
308 |
329 |
330 |
330 |
327 |
318 |
EBITDA |
1921 |
2393 |
2763 |
2528 |
1685 |
1883 |
On the basis of the above presented data it is observed that there is a decline in the sales figure of Hilton and company needs to do something for the same. And as its high time the business entity should make implementation of some development strategies for providing boost to the sales and thus enhance the overall performance.
Service Gap Model of Hilton
Hilton hotel is expanded worldwide with more than 570 hotels and resorts in around 85 countries. This shows a huge expansion of the organisation in terms of the geographical factor (Kandampully, Zhang and Jaakkola, 2018). Hilton targets both on national as well as international consumer group. The targeting and segmenting depends on the location of the hotels. The main strategy used by the Hilton hotel is to establish the hotel on such a location which is popular and caters a large amount of tourists or travellers. Geographical segmentation allows the organisation to expand their business. The main target of the Hilton hotel is to cater in such a location where many tourists visit mostly.
Hilton hotel has the following five service characteristics:
Image strategy is very important for any company in order to create an attractive image of the company or the organization (Komppula, 2014). Hilton hotel present itself in front of the customers in such a way, that it looks stylish and efficient in terms of the hospitality industry. The current image strategy used by Hilton hotel using different platforms to advertise about the hotel and it’s services. Many different social media platforms are being used by the company in order to gain a large audience and customer base. Many different events and shows are organized in which different celebrities promote the brand. To strengthen the image game, Hilton hotel is using different innovation in order to provide the customers with the best services all over the globe and satisfy them in every possible way. In order to include more and more customers in this organisation, Hilton is trying to provide different services for all kind of people with all kind of budget. This strategy makes Hilton, very convenient for each and every one. Hilton hotel while advertising try to convey their story to the audience in such a way that shows the main aim and direction of the organisation. In this way people will feel more connected to the brand.
Hilton is one of very popular name in the hospitality industry and to maintain the status, the company provides High Touch service to the customers in a very efficient manner. This organisation is very keen on satisfying all the needs and requirements of the customers and provide them a best experience. Hilton hotel provide different kind of services such as, clubs, restaurants, transportation, accommodation, and many other services(Smith and Wong, 2016). A great staff team makes everything possible therefore Hilton is very famous for it’s hospitality. Hilton also organizes many other services such babysitting, beauty salon, meeting rooms, office rental, video conferencing etc.. Hilton serves many different people from different culture and to make the stay convenient for them, Hilton also has a multilingual staff. Even for businessmen, those who deals with cash, Hilton also provide safety deposit box services. All these different makes the journey very easy for the people. Safety and quality levels of all the services are checked and ensured before providing any kind of services to the customers to maintain their standards.
Hilton is a great brand but it also face several challenges such as, competition, demotivated staff, technology, focusing on single individual etc. As a company, Hilton needs to focus on their performance level but sometimes due to bad feedback or any complaint, the employees feel so demotivated (Lin, Shen, Hengel and Reid, 2016). There might be some issues regarding the proper scheduling of the work due to lack of participation and staff turnover. Hilton is a large group therefore sometimes it is very difficult to manage and overlook each and every resources.
This indicates the gap between management perception and the service quality specification in which the company fails to maintain and update all the service management functionalities (Dolnicar and Leisch, 2017).
There are so many different brands which creates a huge amount of competition for the Hilton hotels (Kowalkowski and Ulaga, 2017). For instance, Mariott, Hyatt and Intercontinental hotel groups and many more. Among all these hotel groups, Mariott is one of the biggest and toughest competitor for the Hilton. Since the Mariott hotel strives hard to maintain all it’s services in an efficient manner and the service standard are very high.
The gap between consumer expectation and management perception can cause the competition because if the consumer needs are not fulfilled then they will choose other brand causing high competition level.
Customers are a very important part for any orgnaisation. Customers can be very demanding sometimes. It is a really big challenge for the companies to cater all the needs of the customers in the most efficient manner (Huang and Rust, 2017). The major challenges faced by the Hilton because of the customers are mainly, continous services, bothering the staff, fluctuations in demands, rude behavior etc. Customers can be very moody and demanding which puts a lot of pressure on the hotel staff to fulfil all their demands and the orders. Any kind of mistake even if it is a little one can irritate the customers and they take out all the anger on the employees which demotivated the employee. Sometime due to network connection the servers are down which can create a communication error between the hotel staff and the customers. Due to which customers can be angry. Also the customers compares the hotel in which they are staying to the other hotels and demand a bargain wherever possible.
This indicates the Gap between the customers expected service and the perceived service. If the quality services are not delivered then the customers feel disappointed which causes a gap.
To monitor the service satisfaction, the Hilton group can use several strategies such as, analyzing all type of complaints, creating focus group etc. Analyzing and focusing on all the complaints of the customers will make the customers feel valuable. The problems can be resolved with the help of the focus groups.
Conclusion
This report consist of a brief description of the service management. It can help in various ways to achieve the company target by carefully strategizing all the system and functionalities. It helps to achieve the operational excellence and customer satisfaction for the Hilton hotels by identify the weaknesses and conquering them. Although there are some loopholes in the working of Hilton organisation but if the overall experience is evaluated then it is noticed that the Hilton hotel is a great organisation. They always try their best to fulfil all the expectations of the customers in each and every way and make the experience very luxurious for the customers . It shows that the perceived services are normally same as expected services which results in customer’s satisfaction(P=E).
Dolnicar, S. and Leisch, F. (2017) Using segment level stability to select target segments in data-driven market segmentation studies. Marketing Letters, 28(3), pp.423-436.
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Huang, M.H. and Rust, R.T. (2017) Technology-driven service strategy. Journal of the Academy of Marketing Science, 45(6), pp.906-924.
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Kowalkowski, C. and Ulaga, W. (2017) Service strategy in action: A practical guide for growing your B2B service and solution business. Service Strategy Press.
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