Background:
Hilton is one of the seven largest US hotels in the business class hotel. Before the Hilton brand worldwide agreed to reunify in 1997, the Hilton brand was controlled by two different firms, Hilton Hotels Corporation and Hilton International. In 1999, the head of Hilton HHonors – Jeff Diskin, read the headline on The Wall Street Journal “Hotels Raise the Ante in Business Travel Game”. Diskin’s dilemma was if they are increasing the costs then his costs are increasing too. Also, the cost effectiveness of the industry’s marketing tool will be reduced. They are deficit spending against their program. And finally, loyalty programs are only as cost effective as the competitors let them be. All due the announcement of Starwood Hotels and Resorts Worldwide Inc. frequent-guest program that will help increase more business travellers. Moreover, Starwood’s is investing $50 million on advertising the program, which is more than what Hilton has spent on advertising the program. In addition, the Starwood’s frequent-guest program features are too expensive for the Hilton brand to match, such as “No blackout dates”, “Paperless rewards”, “No capacity control”, and “Hotel reimbursement”. However, these challenges have made Diskin to either match the Starwood’s program point for point, or come up with a new strategic program. And in order to analyse the current position and difficulties that Hilton brand is facing we must first take a look at the internal and external factors using the %Cs.
Customer
When travelling there are three types of consumers, people who travel for business, convention and leisure. Is it important for the brand of Hilton to meet these three types of segments based on the consumers’ needs, wants and values. Consumers that travel on purpose of business are one third of the customer base for the Hilton chains. Mostly all business travellers are given low exclusive rates because of negotiation between the traveller’s company and Hilton. Another segment of customers that occupy rooms are major conference organizers or major companies usually choose customers that come for conventions. The last segments that occupy rooms are mostly guests that are price sensitive and choose packages of hotels, airline ticket, and tours.
Company
The Hilton corporations’ main goal is to gain customer loyalty by providing customers with great hospitality and great quality of service. By providing these qualities, the Hilton company strives to have a known name domestically and internationally. The average price per room is between $60-$125.
Competitors
Based off the case, there are four international brands that dominate the hotel industry, which are Starwood, Marriott, Hyatt, and Hilton. Each one of these hotel brands offers a different type of segment when it comes to price, class, and quality out service. When it comes to owning rooms, Marriott hotel is number one with 339,200 rooms, Starwood with 212,900 rooms, Hilton with 154,000 rooms, and lastly Hyatt with 91,700 rooms. Out of all four-competitor brands, the only threat against the Hilton company is Starwood’s since they announced the new frequent-guest program for loyal customers.
Collaborators
SWOT analysis
Strengths:
Builds brand loyalty – industry most important marketing tool
Builds partnerships and collaboration
Facilitates database management – chain brand – one central hub
Accesses new markets
Creates a greater recognition of the Hilton brand
Generates larger sales volumes
Becomes competitive
Weaknesses:
Hilton is not the industry leader
Some competitive information is shared freely in the industry
There is less standardized of operations
Threats:
Rise of budget hotels
Changing consumer behaviour
Negative impact in economy which might affect the business travellers
Are you looking for a similar paper or any other quality academic essay? Then look no further. Our research paper writing service is what you require. Our team of experienced writers is on standby to deliver to you an original paper as per your specified instructions with zero plagiarism guaranteed. This is the perfect way you can prepare your own unique academic paper and score the grades you deserve.
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.
[order_calculator]