Hilton Hotel Management and Expansion to International Markets - Case Study Example

Hilton Hotel Management and Expansion to International Markets By: Professor: Class: University: City: State: Date of submission: Hilton Hotel Management and Expansion to International Markets Introduction In this essay, the focus will be analysis of Hilton Hotels. Hilton Hotels Corporation is a globally known hospitality corporation that manages more than 3,890 hotels with more than 642,000 rooms within 91 states. In addition, the hotel employs more than 135,000 employees globally. The business manages some of the finest hotel brands and owned by private equity known as Blackstone Group. According to Forbes, Hilton is the 38th biggest private corporation operating in the United States. Hilton Hotel has been in operation for many years which makes it an important avenue for the developers, travellers, and the partners. History Hilton Hotel was founded in 1946 which makes it one of the oldest listed businesses on the New York stock exchange. However, in 1949, the business became the first international brand to operate in Puerto Rico, Caribe Hilton. In Europe, Hilton Hotel opened its first branch in 1954 in Madrid. In 1959, Hilton Hotel introduced hotel business within the airport through opening up a branch in San Francisco Airport. In 1965, Hilton International separated from the Hilton Hotel Corporation and later began to franchise in the United States. The hotel first launched its website (www.hilton.com) in 1995. The business has various brand names including Embassy Suites, Conrad, Hilton Grand Vacations, Homewood Suites by Hilton, Doubletree, Waldorf Astoria, Home 2 Suites by Hilton, Hilton Garden, and Hampton Inn & Suites (Allegrini & Davis, 2012, 181). Since the business was founded 90 years ago, it has been committed to creating an exception customer experience which has remained unchanged over the years especially with its experienced employees who continue to bring quality services to international visitors. Hilton Hotels have headquarter in Mclean, Virginia, and considering that it is a private entity, it does not announce its financial performance within the public domain. Hilton Hotel sold two of its main hotels in UK: Hilton Birmingham and London Metropole sold to Arthur Matyas. Moreover, the Hilton Hotel Corporation signed a multi-year contract for its resorts in Costa Rico and later opened Spa and Hilton Ras Al Khaimah Resort. In 2007, Blackstone acquired Hilton Hotel Corporation and in the same years the business was delisted from the NYSE to be a private entity. In 2008, it signed an agreement with Monit Investment that saw the development of a 250-hotel rooms and Waldorf Astoria Residence which came to completion in 2011. Aims to the Target Market The main aim of the business is to fill the earth with light and warmth of hospitality. To achieve this, the hotel consistently provides superior global value to its customers through ensuring that its team members are knowledgeable and offer collaborative support, innovative solutions, and commitment to ensuring that the hotel maximizes on its profitability in every distribution channel with greater responsiveness, accuracy of the deliverables, and speed. The objectives of Hilton Hotel are central to the general business plan which involves taking good care of the customers and ensuring stability in business growth through having stable score card and steering the organization forward. The mission of the hotel ensure involvement of employees in various activities, improving customer experience through offering products and services that meet their specific needs, developing operational efficiency, improving organizational structural designs, reinforcing partnership with the customers, and diligently serving the local communities through its corporate social responsibility department. Within the hospitality industry, the business targets customers seeking both hotel and accommodation services and reaches more customers through its penetration strategy that ensures the business brings services close to the customers. Hilton International Expansion The main strategy used by Hilton Hotel to reach its customers is penetration strategy which involves exploring various market opportunities through opening up branches in various locations. Since 2007, the business to expand to more than 50% and successfully developed various brands contributing to more than 60,000 rooms to boost business’ growth. To ensure that it provides more options to the guests and owners, the business is set to unveil its midscale brand that is aimed to guarantee effective business growth. With Hilton driving a remarkable global growth with increased room pipeline within the hospitality industry, global market plays significant role to its expansion efforts. In 2017, Hilton Hotel is set to open Hilton Yantai which is set to be the second Hilton Hotel and Resorts property within the northern coastal city (Yuanhao, 2011, 127). The hotel is set to offer a stunning city and sea views and surrounded by various historical attractions such as Yantaishan Scenic Spot and Changyu Wine Culture Museum. Hilton Hotel is set is enjoy various opportunities in the Chinese market. Throughout the years, China has experienced growth in its hotel and tourism industry which is likely to make it the world’s top tourist destination. China is increasingly becoming a business and tourist hub which increases demand for hotel and accommodation services. There are a number of opportunities associated with high numbers of attractions and unmatchable diversified topography which makes the country ideal for Hilton Hotel. The number tourists have been increasing in China which leads to increased demand for hotels. Most visitors are seeking accommodation in facilities with strong internet connection. Globally, China is known as one of the countries with highly developed technology which offers opportunity for the Hilton Hotel to tap (Zhou, T. (2016).). The hotel use internet connection to acquire information, receive booking and reservations, and communication with potential guests. With increased demand and competition for the few communication, businesses require strong internet connection which is highly used in Chinese hotel industry. China has one of the highest populations globally which offers ready market to services and products offered by the Hotel. Cultural Sensitiveness Hospitality businesses are increasingly operating globally which creates real challenges for both the employees and managers to interact and work effectively due to cultural differences. Most of the problems experienced by international hotels in China are culture related. For business success, cultural awareness, sensitivity, and understanding of various cultural differences need to be considered important. Adaptation to the Chinese culture commences with struggle of Hilton Hotel management to understand and appreciate behavioural expressions of the Chinese which are greatly rooted in their culture. The problems could occur from differences in cultural backgrounds and misunderstanding of each other which results to language barrier (Grobelna, 2015, 217). In China, the hotel would have to adjust its cuisine to meet the needs of the target market. Individuals’ predispositions to deliver better services are influenced by either ethnic or national culture; thus, hotels often depend on both multicultural workforce and guests. China has many cultures that define the types of food eaten, beliefs, and hotel themes. With such sensitivity in culture, the business cannot fully rely on the expatriate employees considering that they do not understand the manner in which local cultures operate. Chinese management culture differs from the western especially since it considers seniority important. China is extremely a large country with customs and traditions varying with geography and ethnicity. In China, culture includes language, food, style, religion, morals, marriage, and music which determine the manner in which people act and react. Like any other aspect of Chinese life, Chinese food is high influenced with location and ethnic diversity. Among the Chinese cooking styles that the hotel needs to consider to eliminate cultural issues Cantonese which includes stir fired dishes and Szechuan which greatly depends on the peanuts, ginger, and sesame. In China, rice not the only the main source of food as it also an element which assist to grow the society. Rice is stable for the Chinese diet. In addition, the Chinese do not consume a lot of meat especially pork or chicken with tofu being their main protein source (Zimmermann, 2015). Customer satisfaction is the driver of organizational success; as a result, throughout the years, Hilton Hotel has focused on developing products and services that meet specific needs of the customers irrespective of cultural background. Therefore, if the business needs to invest effectively in China, it is important that it undertakes visibility study on the Chinese hotel industry to determine the most preferred cuisines and develop menus tailored to meet the market needs. Centralized and Decentralized Decisions Centralization and decentralization are two types of organizational structures found within businesses. In centralization, the authority means the power to plan and make decisions exclusively lie in the hands of the top managers and to allude to the concentration of all the powers within the apex levels. On the other hand, decentralization means that power is disseminated by the top management. In the early stages of investment, the decisions need to be decentralized which allows lowers managers and front-line employees to make various strategic decisions for themselves and workgroups while reporting their information to the higher levels of management. Branch managers operating from China understand various market dynamics, challenges, and opportunities; as a result, the top management need to give them the opportunity to make decisions on factors influencing the performance of their operations (Management Study Guide, 2017). However, it is important that decentralized decisions are communicated with the top management to guarantee accountability and assistance should the business experience any decisional challenge. In extent of decentralization and centralization depend on the amount of authority that the lowest level of management possess. If the hotel chooses decentralization method, then their implications it is likely to experience. Such implications include lessening the burden on the Chief Executive, giving the subordinate chance to improve their managerial and decision making skills as they decide and act independently which assist to develop important skills and capabilities. As a result, the business is able to reserve its talents. With decentralization, concern diversification can be placed effectively since there is more scope for creation of new organizational departments; enable coordination of various operations at divisional levels; enhance the level of motivation and morale of the employees since they are independent to act and decide on critical issues without interference of the top management (Management Study Guide, 2017). Companies which enjoy wide geographical reach such as Hilton Hotel can benefit from the decentralized structures since it enhances efficiency and reduces time wastage during decision making, eliminate redundancy in various executive positions for country instead of allowing single executive teams to make decisions. Conclusion The market is increasingly becoming competitive that before investing in global markets, it is important that businesses conduct feasibility studies to establish to need to adjust to cultural differences. In this essay, the focus was on Hilton Hotels in which the history, the aims to the target market, cultural sensitiveness, and international expansion were discussed. Based on the analysis, it is evident that the hotel commands a big share of the hospitality industry and the chosen market for study was China. To continue strengthening its overseas branches including China, Hilton Hotel needs to embrace decentralization structure while making decisions. References Allegrini, R. V., & Davis, G. H. (2012). Chicago's grand hotel: A history of the Hilton Chicago. Chicago: The Hilton Chicago. Grobelna, A. (2015). Intercultural Challenges Facing the Hospitality Industry. Implications for Education and Hospitality Management. Journal of Intercultural Management, 7(3), 214-236. Management Study Guide. (2017). Centralization and Decentralization. Retrieved August 16, 2017, from http://www.managementstudyguide.com/centralization_decentralization.htm Yuanhao, Q. (2011). A study on spatio-temporal differences in operating efficiency of Chinese tourist hotels. ICSSSM11, 4(6), 122-138. Zhou, T. (2016). Analyses of the Cultural Differences in Chinese and American Cartoon Movies. Proceedings of the 2016 International Conference on Engineering Management (Iconf-EM 2016), 3(2), 101-116. Zimmermann, K. A. (2015, January 20). Chinese Culture: Customs & Traditions of China. Retrieved August 16, 2017, from https://www.livescience.com/28823-chinese-culture.html Read More