Hilton Hotel's Service Management Strategy: Essay.

Prepare a report on service management.

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

• Geographic  

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.

• Demographic
  Hilton hotel mostly targets those customers which can easily afford the hotel for instance middle and senior aged persons which mainly belong to upper social class and has a high income (Lancaster and Massingham, 2017). Those individuals who are looking for a luxurious stay are mainly targeted by the company. Hilton hotels are very particular when it comes to providing the luxurious services and charges a premium price in return of their services. Therefore it becomes very important for the company to target that part of the population which are highly interested in luxurious lifestyle.
• Psychographic
  Hilton hotels provide the consumers with a high level of luxury. Hilton is famous for it’s luxurious experience. Therefore it mainly focuses on those customers who pursue a luxurious lifestyle and want such kind of hotels for the stay. Psychographic factors determine the thinking, behavinag and feeling ability of a person (Strobl, Bauer and Matzler, 2018). That is why Hilton mainly targets those individuals who are really ambitious and  who wants to show off their high status in society by staying in such luxurious hotels.  Since Hilton provides it’s services at a premium price and a luxurious experience that is why it targets those who really want this special factor in their life.

Hilton hotel has the following five service characteristics:

1. Heterogeneity- Hilton  hotel  tries to provide similar kind of services in all of its branches to maintain their standards but still there is heterogeneity in service provided to the guests as it varies from staff to staff . It creates a gap between customer expected services and the perceived services. Since Hilton provides high touch service, it becomes hard to standardised the level of service provided to the guests as the employee’s working in Hilton are from different cultural background and nationality. To overcome that  Hilton Hotel  regularly provide service training  to their staff to create a homogeneous environment.The service gap can be resolved by focusing on the needs of the customers and fulfilling all their expectations.
2. Intangibility- Services cannot be seen or touched,so is it considered intangible because guests  have to be present there to actually experience it. Hilon service strategy aims at providing world class facilities to their guest to provide them an overall execelling experience to build a strong customer base.
3. Inseparability- During a service the production and consumption happens at the same time,so it is considered as inseparable.The services offered by the Hilton hotel to the guests starts as soon as the guest arrives at the hotel. It might indicate to the knowledge gap which occurs betweenconsumer expectation and the management perception. Only if the company try to meet the wrong needs of the customer which does not even exist.
4. Perishability- Services are perishable because it cannot be stored for selling or using it for the later.So, Hilton should use effective service  and marketing strategies to try to sell as much as possible services to the guests and keep the balance of the demand and supply taking care of all the customers requirements.
5. Ownership – Customers cannot own any service or place even if they pay for the service. They can only experience it for a specific time period.

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.

Target Market Analysis

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.

1. First challenge is to overcome the challenges faced by Hilton as a company. For that Hilton can hire a great team for proper Resource Management.
2. To handle the challenges that occurs because of the competition, Hilton should work on those features in which they lack. They should train and educate there staff regularly to keep them aware of changing trends and service strategies in the hospitality industry. Hilton is High touch but they started to be high tech as well. Hilton is the first to introduce Smart Robot concierge named connie and providing guests with digital room key. Soon this will be adopted by other hotel chains but in the meantime Hilton is constantly doing market analysis about what new services to introduce to always gain a competitive edge in the market. Monitoring the competitors is also important.
3. To resolve the issues related to customers it is important that the management of Hilton Hotel should constantly update their knowledge about the target market’s new needs and requirements. If the customers are satisfied then the competitive advantage can be achieved. Motivating the employee’s is also necessary to help them to work effectively in the workplace.

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).

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