Hilton SWOT Analysis
...ts such as youth tournaments and professional venues. In volume, the more people that move through the doors, the more money there is to be made. With this said, room rates must stay within the $100.00 a night rate with weekend promotions of Thursday through Sunday at a lower rate; perhaps 25% to 35% lower. This would be a novel concept, as the industry generally promotes lower room rates Monday through Thursday. The food and beverage structure should remain the same, as it has proven to be more than adequate and very popular. The increase in competition can be dealt with through better values in room rates, children's activities, slot machines that pay off more frequently and the most important aspect of the business, service. Hilton could offer something that the other hotels do not: ensuring the employee responses to each customer’s needs are met with enthusiasm and expedience. People are paying for an experience along with the opportunity to break the house; give them what they are looking for. Word of mouth is far more powerful than any media advertisement. Hilton has entered the gaming industry. Gaming must focus on gambling and hotel must focus on hotel amenities and service. It would be the hotel’s responsibility to insure the entertainment, promotions and accommodations were settled; leaving the gaming operations to generate gaming interest. Advertising would be a joint effort, but casino operations would focus on the age 21 and older market. The two operations would report to the Chief Executive Officer and his staffs to ensure all objectives are met. It would be the CEO and staff's responsibility to ensure both lines were working hand-in-hand, while maintaining separate operations. The purpose for this suggestion is to keep revenues separate so one function does not bear the full brunt of any losses that may occur. The casino will always show a bigger profit than the hotel, but by having separate bottom lines, profit and losses are easier to control. The hotel/casino is one business, but must have two different mindsets as the casino and hotel does, and will operate much differently. Situational Analysis The U.S. based Hilton Hotels Corporation is a multi-billion dollar corporation and a leading brand in the hotel and gaming industry. Conrad Hilton started the company in 1919 with his first hotel purchase. Since then the company has grown to over 2,000 hotels globally, with several brand name acquisitions, including Bally’s, Hampton Inn, Doubletree Suites and Homewood Inn. Besides standard hotel service, the Hilton Corporation runs casinos, vacation ownership businesses and luxury hotels, like the Conrad Line. The Hilton Hotels Corporation earned in excess of $3.8 billion in fiscal year 2003 (Datamonitor, p. 4). External Factors According to the Datamonitor report, the Marriott and Hyatt Corporations are the Hilton Hotel Corporations biggest competitors. Las Vegas is a gaming town, thus every hotel is expected to have gambling casinos within. The Las Vegas Hilton website shows that they also provide live entertainment, including comics and headline musical acts, as well as hosting a million-dollar Blackjack tournament. These factors, along with the attractive room packages and gambling activities, should be enough to maintain the occupancy rate and keep the gambling action constant. According to its website, the Las Vegas Marriott is a hotel with 278 rooms. The Hyatt franchise is located 17 miles away from the Las Vegas strip on Lake Las Vegas, but is a resort, casino and spa. While the Hyatt is a luxury hotel chain, the Marriott is a corporation more in line with Hilton. The Marriott made over $9 billion in fiscal year 2003; more than three times the Hilton Hotel Corporation (Marriott Datamonitor report). SWOT Analysis Strengths Hilton Hotels Corporation strengths are that they are a reputable company, they have a large operation, and they are known worldwide. Hilton Hotels Corporation is recognized internationally as a preeminent hospitality company. The company develops, owns, manages or franchises approximately 2,100 hotels, resorts and vacation ownership properties. It's portfolio includes many of the world's best known and most highly regarded hotel brands, including Hilton®, Conrad®, Doubletree®, Embassy Suites Hotels®, Hampton Inn®, Hampton Inn & Suites®, Hilton Garden Inn®, Hilton Grand Vacations Company® and Homewood Suites by Hilton®, as well as many of the most famous hotels to be found anywhere, such as New York’s Waldorf Astoria, Waikiki’s Hilton Hawaiian Village and Chicago’s Palmer House. The Hilton family of brands and hotels offers guests and customers the finest accommodations, services, amenities and value for business or leisure (Hilton Hotels Corporation, 1998, p.1). To contend with a company of this magnitude is not an easy job for any of their competitors. Hilton Hotels Corporation is an enormous company as mentioned above; so sizable that they had to split the corporation into six main divisions, totaling approximately 100,000 employees worldwide. Hilton Hotels Corporation has been very successful since they were established in 1946. Their diversification profile is significant and ambitious; no matter where you go, there are Hilton hotels there. In addition, Hilton Corporation has been leading in customer service and efficient staffing by utilizing a call center to help them maintain their reputation for hospitality. Hilton Reservations Worldwide handles reservations and information requests for thousands of hotel properties, under their various brands, positioning the company on the top of: • Accurate intraday forecasts • Reduced management costs • Excellent customer service • An edge over the competition A company’s strength does not solely lie in the size of the company but in the management of the company, the employees and their commitment to their customers. Hilton’s management promoted brand relevancy within minority markets. Their sales team strategic initiatives are to target the multicultural market. In relation to their employees, Hilton’s are some of the finest. They are trained to do their jobs with care and make sure the customers are comfortable and happy. The customer personal profile allows the Hilton employees to treat each customer as a unique and special individual. Weakness Every company has weaknesses; Hilton Hotels weakness lied in its inability to recover quickly from the attacks on America in 2001. Although Hilton Hotels is a large company in many locations across the country, they had to reduce their manpower due to the decline in business. Matthew J. Hart (president and CEO) said; “we have had a lot of job losses - about 2,500 full-time equivalent jobs out of a worldwide workforce of 100,000. But we have no plans for any more, unless business gets worse” (Finch, 2001, p.1). The September 11th attacks left the whole nation in awe, in grief, and for many New Yorkers, jobless. The attacks left the airline and hotel industry to recover from lost sales. Another weakness the hotel industry is facing is the evident decline in supply. The below chart shows how the demand to occupy the Hilton hotels has been a declining behavior during the last years: A closer examination of the demand cycle for economy hotels during the past several years reveals a pattern that is not consistent with other hotels. The rate of demand growth in this segment began declining during mid-2000, about nine months before a similar effect was felt industry-wide. In addition, as the industry's demand recovery has begun to accelerate the rate of demand growth, the economy segment has plateaud. Of even more concern is that the number of rooms currently being purchased in this segment is still declining when compared to previous-years levels. (Look Smart Articles, 2004, p.1) Opportunities As mentioned earlier, Hilton Hotels Corporation is known ...