Hilton Hotels Case Study

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Hilton Worldwide relaunched its loyalty programme HHonors in March this year, as reported exclusively by Marketing Week. It wanted to focus on the experiences available to customers, rather than on the mechanics of amassing points. Eight months on the brand is already seeing results, with new HHonors customers and an uplift in the proportion of its business that comes from those in the scheme.

Senior vice-president of customer marketing Jeff Diskin says: “We are going to have more than 50% more new members this year than we did last year – the highest number of new enrolments we have ever had, in a programme that is nearly 25 years old. We are tracking at more than 45% of all occupancy globally coming from HHonors membership. That is also its highest level ever.”

The rewards on offer have been picked according to the data shared and preferences expressed by HHonors members. Hilton has also recently made 200,000 extra premium-rate rooms available for redemption of HHonors points. According to Diskin, customers booking online have begun taking advantage without Hilton even marketing this new availability – 20% of new redemptions are now made on premium rooms.

The data generated by the HHonors scheme gives Hilton’s marketing team “irrefutable” evidence of the customer experience strategy’s impacts on the financial health of the business, Diskin says. He adds that control testing was also done to add further weight to the figures.

“Earlier in the year, we did a promotion where if you stayed longer you got more points. For the first time in the history of the company, the length of the stay went up for the three months that the promotion ran.”

What is not as measurable is what incremental improvements in sales are attributable to customers’ general feelings about the experience at Hilton’s hotel brands, as opposed to the effects of experiences offered through promotions.

However, the HHonors programme has previously been used to demonstrate how negative customer experiences hurt business, according to Mike Ashton, who until 2008 was senior vice-president of international brand marketing for the company’s previous incarnation, Hilton Hotels Corporation.

He says that HHonors members were asked in their satisfaction surveys to point out where bad experiences had led them to decide not to return. “Over a period of time, we demonstrated the amount of business that we were losing because of things we were not getting right. It becomes very hard to argue with the amount of money that you are losing because of things you are doing that do not match up to what the customers expect.”

 

Abstract

The research project describes the ways to effectively handle the different projects and the customers in the hospitality and the tourism sector. The researcher here for the ease of the analysis has taken the case study of the renowned Hilton Group of Hotels and Resorts. The researcher has tries to explain the problems and also provided the recommendations which according to the reasercher are sufficient for the growth of the company’s services. For this purpose the researcher has collected sufficient primary data from with the help of the interviews of the customers who have already experienced their stay in any of the branches of Hilton hotel and the mangers of the hotel.

With the help of the different techniques and methodology the researcher tried to ascertain the results and recommended the solutions accordingly. The researcher in this respect evaluated that the effective use of the factors will help the Hotel to implement its projects both global and national fruitfully. The survey with the customers shows that they are more or less satisfied with the services provided by the Hotel nut there is still a gap in the total management of the service quality hence the management of the hotel needs to rectify that gap to gain the highest position in this sector.

 

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Acknowledgement

Conducting this research has been one of the most preferable experiences of my life. It has contributed exceptionally in enhancing my knowledge base and skills of analysis. I was capable of overcoming the challenges that I faced while competing this dissertation. However, all this would not have been possible without the guidance and help of many persons supporting me. First, I would like to thank my supervisor ___________ for constant assistance and guidance throughout the research. Special thanks to my academic guides who shared their knowledge and encouraged me. I would also like thank my friends who provided me moral support and helped in collecting the primary data from various resources. Finally, I would like to thank the organizational personnel who participated in the research survey and shared their valuable insights. The support of all these people gave the strength and courage required for conducting this study.

Thanking You All,

  Yours Sincerely

 

Table of Contents

Chapter 1: Introduction. 6

1.1 Introduction

1.2 Research aim

1.3 Research objectives

1.4 Research questions.

1.5 Background of the company: Hilton group of hotels and Resorts

1.6 Rationale of study

Chapter 2: Literature review

2.1 Introduction

2.2 Current Project Management trends in Tourism and Hospitality Sector

2.2.1 Total Quality Management (TQM)

2.2.2 Customer Relationship Management (CRM)

2.2.3 Life time value of customer and its importance

2.2.4 Relation between the TQM, CRM and Customer Loyalty

2.2.5 Grievance Management 12

2.2.6 GAP between Customer Perception and Customer Expectation

2.3 Conceptual Framework

2.4 Summary.

Chapter 3: Research methodology

3.1 Introduction

3.2 Method outline

3.3 Research onion

3.4 Research philosophy and its justification

3.5 Research approach and its justification

3.6 Research design and its justification

3.7 Data collection procedure

3.8 Sampling technique

3.9 Ethical considerations

3.10 Research limitations

3.12 Summary

Chapter 4: Data Interpretation and Data Analysis. 22

4.1 Introduction

4.2 Quantitative questions for the customers

4.3 Quantitative questions for the managers

Chapter 5: Conclusion and Recommendations

5.1 Introduction

5.2 Objective Linking

Objective 1: To identify the ways to improve the synchronization between the projects through the involvement of the technology

Objective 2: To analyze the project management issues which are affecting the growth for Hilton Hotels in global market?

Objective 3: To develop a well synchronised project management framework this will help The Hilton Hotels to manage their global projects

5.3 Recommendations

5.4 Future Scope of the Study

References

Appendix

 

List of Figures

Figure 1: Grievance management 14

Figure 2: Conceptual Framework. 16

Figure 3: Research onion. 18

Figure 4: Types of research philosophy. 19

Figure 5: Steps involved in Deductive approach. 20

Figure 6: Gantt chart 22

Figure 7: Satisfaction level of the customers with Hilton hotel 24

Figure 8: Problem faced by customers in residing at Hilton hotels. 25

Figure 9: Analysis of the service provide by the hotel 26

Figure 10: Analysis of the satisfaction level of the use of modern technologies in Hilton hotels. 27

Figure 11: Analysis of the grievance management of the hotel 28

Figure 12: Use of technology to improve the co ordination between projects and customer delivery  30

Figure 13: Important factors affecting the growth of the projects undertaken by the hotel 31

Figure 14: Effective management of the global projects. 32

 

 

List of Tables

Table 1 : Satisfaction level of the customers with Hilton hotel 23

Table 2: Analysis of problem faced by customers in residing at Hilton hotels. 25

Table 3: Analysis of the service provide by the hotel 26

Table 4: Analysis of the satisfaction level of the use of modern technologies in Hilton hotels. 27

Table 5: Analysis of the grievance management of the hotel 28

Table 6 : Use of technology to improve the co ordination between projects and customer delivery  30

Table 7: Important factors affecting the growth of the projects undertaken by the hotel 31

Table 8: Effective management of the global projects. 32

Chapter 1: Introduction

1.1 Introduction

The hospitality and the tourism industry is a growing industry of UK which employs about 9% of the total working population (Zahay, 2009). It is one of the fastest growing economies which comprises of more than one third of the total global economy. The sector had faced a reduction in its revenues during the time of the recession because of the reduction in the purchasing power of the tourists. But according to Lo et al (2010) the industry revived its position in the recent years to recover for the loss it suffered. The Hilton group of hotels founded in the year 1919 aims to provide a fresh environment to the tourists serving over 78 countries across the world (Sen, 2009). It provide comfortable atmosphere for the tourist and thereby maintains a customer loyalty in the sector.

1.2 Research aim

The aim of the research here is to analyse the system of the project management incorporated by the hospitality and the tourism industry of UK. The researcher thereby tries to evaluate the project management system of the renowned Hilton group of hotels to get a clear picture of the whole industry.

1.3 Research objectives

  • To identify the ways to improve the synchronization between the projects through the involvement of the technology
  • To analyze the project management problems which are affecting the growth for Hilton Hotels in global market
  • To develop a well synchronised project management framework which will help The Hilton Hotels to manage their global projects

1.4 Research questions

  • How the inclusion of the modern day technology can help to improve the project management capabilities for Hilton Hotels?
  • How much the project handling problems are affecting the growth for Hilton Hotels worldwide?
  • What are the main problems Hilton Hotels are facing in managing the global projects?
  • What framework Hilton Hotels can follow to manage their global projects?

1.5 Background of the company: Hilton group of hotels and Resorts

Originally based in UK, Hilton group of hotels are one of the biggest chains of International hotels which have its branches in more than 78 countries (www.hilton.com, 2014). The main mission of the company is to create an unforgettable experience for the customers in both business and leisure travels so as to retain the customers and create a sense of customer loyalty. The main objectives of the hotel are to enhance the guest experience, improvement of the operational efficiency, protection of the environmental factors and strengthening of the partnerships with other groups (www.hilton.com, 2014).

 

1.6 Rationale of study

The main reason for the choice of this topic is to ascertain the ways through which the international tourism and hospitality industry manages its projects. With the rising number of hotels in different parts of the world it has become very important for all the hotels to maintain a standard benchmark in the quality of the services provided by them. Since the number of substitutes is high in this industry hence effective management of the different projects and attraction of the customers are the primary duty of the hotels.

Chapter 2: Literature review

2.1 Introduction

This chapter will focus on establishing the relation between the different academic and proposed theories and with the current industry scenario of the hospitality and tourism sector. With the help of this academic foundation the researcher aims to enhance the quality of research topic. The proposed theories will help the researcher to analyse the situations through which the current industry is passing and will thus help the researcher to derive at a fruitful conclusion.

2.2 Current Project Management trends in Tourism and Hospitality Sector

The project management trends in the tourism and hospitality industry are the factors which the industry should consider for the betterment of the service. Since it is a service industry hence its success depends completely on the effective management of the customers (Kalisch, 2009). The current trends followed by this sector are:

Globalization: According to Bolton and Lemon (2009) the hotel industry for effective management of the projects is trying to globalise their services. Nowadays it is seen that all the hotels are encountering customers from varied parts of the world with varied cultures. Hence it is required by the hotels to globalise their services.

Safety issues: The industry has become vulnerable to the increasing terrorist attacks. Hence according to Jiang et al (2009) the hotels are trying to incorporate disaster management plans and making personal safety as the first priority.

Service: Quality plays an important role in the services provided by the hospitality industry. Kwak and Ibbs (2009) are of the opinion that the degree of satisfaction can be increased by providing a diversified service at a reasonable price. But Soderlund (2009) argues that quality service cannot be provided by all companies. For enhancing the service quality extensive training should be provided to the employees.

Technology: It is the driving force for creation of different opportunities and improving of the customer’s experience. For the smooth running of the business the hotels are now days using the different database systems to store the information about the customers and mange them effectively (Casado, 2009). The online service helps the clients to view the services offered by the hotels and to make the selection accordingly. This not only increases the number of customers for the hotel but also reduces the territorial boundaries.

2.2.1 Total Quality Management (TQM)

According to Anwar and Hamilton (2010) the TQM is the process of creating a climate where the quality of the services and the products are continuously enhanced by employing of different techniques. The key concept based on which the company’s perform the TQM is that the quality of a service or a product is defined by the requirements of the customers. In the hospitality sector the definition of the quality denotes the obtaining of the goods and the services which will satisfy the needs of the customers and also these services should be above their expectation levels. So according to Easton and Jarrell (2010) the concept of quality management is an essential concept in this industry.

Pettersen (2009) are of the opinion that for attaining a successful TQM process the management of the company should try to identify the customer’s needs and accordingly enhance the service or product feature through continuous efforts and different systematic analysis. The TQM concept offers quality in the fields of total quality control, quality circles, provide standard quality, satisfaction of the employees, satisfaction of the guests and also maximisation of the profits.

According to Xie et al (2014) the management of the quality of service on the hospitality industry is very essential. The quality of a service provided may be analysed in two respects namely the perceived service and the actual service. The quality of actual service provided by the hotels can be increased with the help of the various research techniques like incident based methods. But Lee et al (2011) argues that the actual quality of the service may at times be good but still the customers may not be satisfied with the same. This generally occurs due to high expectations of the customer towards a particular service.

According to Murphy (2012) to understand the expectations of the customers the hotels can make use of the different tools like the survey of the satisfaction levels through use of questionnaires, use of the technique mystery guest, analysis of the market situations and also evaluation of the audit reports.

2.2.2 Customer Relationship Management (CRM)

CRM combines all the aspects of the interaction of the company with its customers. According to Dutu and Halmajan (2011) in the present scenario the business of different sectors are facing high level of competition and hence they have to make efforts to survive in the market by creating a competitive advantage in the sector of efficient management of the customers. According to Costa and Buhalis (2012) the service industry should have the knowledge of the special treatment that they should provide to each individual customer. The hospitality industry has adopted the system if CRM because of some rising issues like the complexity in the nature of the customers’ expectations, the deficiency of the technologies, complexities associated with the management of the perishable products and retention of the loyal customers. Atkinson (2009) is of the opinion that there are four parameters to ensure the success of the CRM. They are as follows:

Impact of corporate strategy: The companies implementing CRM should at first identify the corporate strategy and then should give emphasis on the customer centric approach.

Efficient technologies: The technologies thus used in the different departments of the company should be combines to provide a compact data about the successful application of CRM (Badri and Davis, 2010).

Improvement in the partnerships: For a better result of the CRM process the partnerships within the organisation should be improved.

Efficient management of the CRM technique: The management officials who are responsible for the implementation of the CRM should be well knowledgeable about the process and the technologies for applying it. According to Badiru (2011) misuse or partial knowledge about the programme may result in a failure of the project.

2.2.3 Life time value of customer and its importance

According to Chang et al (2010) lifetime value of a customer is the total profit which the company or the industry will derive from the future relationship with the customer. The purpose of conducting the lifetime value assessment is to ascertain the financial value of the customer. Hence if the company is able to determine the value of the customer with whom it is dealing then it would be easier for the company to take the decision as to which customer is important and should be retained in the future. According to Lewis et al (2010) the top two pressures faced buy the hospitality industry are the increased pressure from the emergence of competitors and the availability of less number of loyal customers. It is seen that the introduction of the online reviewing system has helped the customers to instantly book the hotels according to the suitability of their locations and the cheaper price. Kutsch (2010) are of the opinion that although this is a plus point for the customers but it is a drawback for the hotels because the websites may be misleading and the customers in this respect are not paying a visit to the hotel to make a correct judgement. However according to Johnson et al (2011) the branded hotels cannot set lower price levels because of the brand valuation. Hence this creates a problem for them to gets loyal customer base.

Hence the big chain of hotels should try to retain the customers by enhancing their service quality (Kim et al.2010). They should personalise the services that they are providing and in doing so they will create an image in the mind of the customers and they will have a brand recall value of the same. The hotel industries in this respect can also provide seasonal discounts or discounts on the special suits. They can also provide some additional services for the special types of customers. According to Kutsch (2010) these service enhancements will help this sector to retain the customers.

2.2.4 Relation between the TQM, CRM and Customer Loyalty

CRM is the basic technique adopted by the customer oriented industries. In other words the CRM method is solely used to identify the needs of the customers and to enhance the service quality in order to provide satisfaction to the customers (https://www.researchgate.net, 2014). TQM is a strategy adopted by the companies to focus on the effective controlling and monitoring of the overall all the process of the organisation to achieve an overall satisfaction level in every respect of the organisation. According to Costa and Buhalis (2012) TQM is the broader aspect of CRM or it can be said that the CRM is a part of the TQM process. The TQM aims at achieving the quality satisfaction in all sections of an organisation the sections of an organisation also concerns its customers. They are a broad base of the total quality management of a company. Irrespective of the fact whether the company is a customer oriented company or not, the management has to maximise the quality of the service or the goods provide to the customers.

According to Kalisch (2009) the total quality of the company can only be maximised when the service provided are also maximised in terms of their quality. Hence the implementation of the CRM technique is essential in this respect. This technique will pay specialised attention to the maximisation of the customers’ service quality and thereby will help the company to achieve its improvement level.

Soderlund (2009) are of the opinion that the implementation of both TQM and CRM is necessary for the achievement of the customer loyalty. The enhancement in the level of the service provided will help the particular company to attract more customers and will eventually help the company o to retain the valuable customers for the purpose of the profitable growth.

2.2.5 Grievance Management

The employees are the backbone of any industry and the customers are the base of any industry, hence it is the duty of the industries to check the grievances of both the parties (Pettersen, 2009). There is generally a set of procedures for the effective management of the grievances concerning both the parties. The framework of the organisation should provide the different norms as to how the employers and the mangers should monitor the behaviour of the employees and what benefits should the employees get in their due course of time. According to Kim et al (2010) the different types of grievances faced by the employees of the hospitality industry are namely the increased work pressure, inconvenient work timings, rude behaviours from the customers, lack of respect at the workplace, negligent amount of salary, sexual harassments etc. The companies in the hospitability sector in this respect to reduce the employee turnover rate have introduced various methods to attain to the grievances of the employees (Easton and Jarrell, 2010).

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