Veeren GowreaSWOT analysis of Hilton Worldwide (Hilton hotel SWOT)
This is a detailed SWOT analysis of Hilton Worldwide Holdings Inc. Hilton is one of the largest hotel groups in the world, founded in 1919 by Conrad Hilton. The main brands of the hotel are: Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio -A Collection by Hilton, DoubleTree by Hilton, Embassy Suites Hotels, Hilton Garden Inn, Hampton Hotels, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations.
Strengths of Hilton Worldwide
Performance management
Hilton has one of the best performance management and appraisal systems in the hospitality sector, which gives them one of the best hospitality operations technically speaking. Managers and employees both like it because it is linked to salary raises and promotions, training, and development etc.
Excellent employee benefits
Hilton has a reputation of offering a range of benefits to their temporary and permanent employees for example, Travel Program, 401(k) Savings Plan, Hilton Honors Program, Employee Assistance Program, Employee Purchase Program, The ComPsych Guidance Resources, Educational Assistance Program, Health and Other Insurance Coverage (Hilton, 2021).
Brand Image
A strong brand image over the years saw the development of well-known portfolio of hotel brands including Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton, Doubletree, Embassy Suites Hotels, Hilton Garden Inn, Hampton Inn & Suites, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations.
Loyal customers
Over 50 million customers are in Hilton’s loyalty membership programme covering the 18 brands at over 6,400 properties worldwide. New members earn 10 points for every £1 they spend at any Hilton hotels. Customers are also promised to enjoy the lowest price in the industry if thy booked Hilton.com.
Global presence
Global presence is also strength of Hilton. Hilton has over 6,400 properties in over 100 countries – a hotel for every style, budget and occasion (Hilton, 2021).
Profitability
Hilton’s financial position is strong as well. It generated approximately $9.45 billion in revenue in 2019 (Lock, 2021). It also reported $9.1 billion in revenue for fiscal 2017, up from $7.3 billion in fiscal 2016 (Hilton, 2021).
Weaknesses of Hilton Worldwide
Poor customer review
Many customers have shared their unsatisfactory Hilton experience on different online platforms such as TripAdvisor. Their complaints included but not limited to the hotel’s poor internal environment and poor customer service.
Shareholder pulling out
Blackstone Group LP a private equity sponsor which buys stakes at a discount through a block trade, has decided to sell off all its shares in the Hilton group, which is equivalent to 15 million shares. This can be good for Blackstone as they are selling at three times what they paid 11 years ago, but not necessarily good for Hilton (Reuters, 2018).
Weak in fighting malwares
Credit-card targeting malware infected Hilton’s cash register and the hotel had to pay $700,000 (£525,000) fine for two credit card data breaches. This shows the hotel’s weakness in combating viruses and malwares.
Opportunities for Hilton Worldwide
Partnerships
Partnerships and joint ventures worldwide with the Chinese, Indians, and Japanese companies promise interesting remuneration for Hilton, for example, the sale of Waldorf Astoria in Manhattan for a whopping $ 2 billion, and Hilton holding on to the management of the hotel for 100 years leading to additional long-term revenues. However, some US departments have offices and official residences in the Hotel and are not happy.
New products development
Dual-branded Hilton properties are becoming a common feature with guests favourable towards the concept. Hilton has developed dual-branded properties for a decade and there are huge prospects. Latest development is co-branding with non-competitors or individual hoteliers.
New marketing campaign
The New marketing campaign ‘stop clicking around’ for more direct bookings from customers is based on convincing customers that the lowest prices for Hilton hotels is from their own websites rather than from Expedia or Booking.com (Ting, 2017). The hotel should continue with the lowest price guarantee to further penetrate into the market.
Threats to Hilton Worldwide
Competitors
The main competitors globally are: Accor S.A., Carlson Rezidor Group, Hongkong and Shanghai Hotels, Hyatt Hotels Corporation, Intercontinental Hotel Group, Marriott International, Movenpick Hotels and Resorts, and Wyndham Worldwide Corporation.
Legal Issues
Hilton paid $75 million cash payment to Starwood and another $75 million in hotel-management contracts after a lawsuit where Hilton executives were convicted to stealing confidential documents related to Starwood’s successful W chain. Several other lawsuits followed for many years, an embarrassment for shareholders (Lattman, 2010). This shows that legal penalties may be very challenging for the hotel.
Concluding statement
Hilton benefits from a well-established and traditional leadership and favourable human resources management which give them an advantage over competitors during times of labour shortages. They also benefited from the backing of one of the biggest investors, Blackstone which invested into numerous new properties and mergers and acquisitions. The new markets of China and India provide huge opportunities for opening new hotels and also new shareholders in the umbrella corporation, now that Blackstone is pulling out of hotel business.
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Last update: 28 March 2021
References:
Guardian, (2010) “US taking ‘close look’ at Waldorf Astoria hotel sale to Chinese company” available at: https://www.theguardian.com/us-news/2014/oct/13/waldorf-astoria-sale-us-government-close-look [Accessed on: 04.07.2018]
Hilton (2021) About us, available at: https://www.hilton.com/en/corporate/ [Accessed on: 28 March 2021]
Lattman, P (2010 “Hilton and Starwood Settle Dispute” available at: https://dealbook.nytimes.com/2010/12/22/hilton-and-starwood-settle-dispute/ [Accessed on: 04.07.2018]
Lock, S. (2021) Revenue of Hilton Worldwide Holdings Inc. from 2009 to 2019, available at: https://www.statista.com/statistics/297760/revenue-of-hilton-worldwide-holdings-inc/ (Accessed 28 March 2021)
Reuters, (2018) “Blackstone to end its stay at Hilton after 11 years” available at: https://www.reuters.com/article/us-hilton-wrldwide-stake-blackstone-grou/blackstone-to-end-its-stay-at-hilton-after-11-years-idUSKCN1IJ1FZ [Accessed on: 04.07.2018]
Ting, D (2017) “Hilton’s New CMO Inherits a Strong Legacy and Big Challenges in Hospitality Marketing” available at: https://skift.com/2017/12/14/hiltons-new-cmo-inherits-a-strong-legacy-and-big-challenges-in-hospitality-marketing/ [Accessed on: 04.07.2018]
Photo credit: hiltoneducation.com
Author: Veeren Gowrea
Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.
M Rahman