If you are a person who likes to travel from one place to another, then you must have stayed in Hilton hotels since the Hilton hotel chain is one of the most renowned hotel chains in the US.
It has been offering excellent services to people all across the globe for almost 104 years. Hilton Hotels are considered among the top hotel chains like Marriott.
Earlier, we carried out a SWOT analysis of Hilton to analyze the strengths, weaknesses, opportunities, and threats faced by Hilton. However, today, we will conduct the Hilton PESTLE Analysis to see what external factors impact the operations of Hilton.
Before we proceed further and conduct the PESTLE analysis, let’s discuss the history of Hilton. The roots of Hilton can be traced back to 1919 when Conard Hilton purchased his first hotel.
The first Hilton hotel was opened in 1925. This hotel was opened in Dallas. As soon as the hotel opened, people started visiting it since it was considered relatively modern then.
Soon, other branches of Hilton were opened in Texas and other parts of the US. Hilton Hotels kept gaining popularity over time in the US. In 1943, the Hilton corporation was founded, which decided to expand the hotel chain’s operations across the globe.
In 1949, the first overseas Hilton hotels were established in Puerto Rico and San Juan. After a few years, the hotel chain went public in 1954.
Within a few years, Hilton opened its first hotel in Turkey, which was considered a big milestone since it was Hilton’s first hotel outside the Americas. Hilton Hotels became extremely popular after it opened a hotel in Chicago, the biggest hotel in the world.
Since the hotel was expanding internationally at a very rapid pace, Hilton International was founded to oversee the international expansion. The hotel chain kept on growing both locally and internationally.
In 2007, Blackstone Group acquired Hilton Hotels, after which the company became privately held. In 2010, Hilton’s name was changed to Hilton Worldwide. Many hotels came under this name, along with Hilton Hotels.
In 2013, Hilton Worldwide became public again. From then onwards, the company continued expanding its operations in other parts of the world. Currently, Hilton has more than 584 hotels and resorts across six continents.
The hotel industry requires a lot of workforce to function. Hilton had 159,000 employees in 2022. Since Hilton is one of the biggest hotel chains in the world currently, it managed to generate revenue of $9.34 billion in 2023.
Now that we have discussed the history of Hilton and analyzed how one of the largest hotel chains evolved over the years, let’s proceed and discuss what a PESTLE analysis is.
A PEST analysis is a business technique used by businesses to examine how different political, social, economic, legal, technological, and environmental factors affect the operations of a business.
So, let’s proceed ahead and conduct the PESTLE analysis of Hilton. The section below will discuss how different political factors impact Hilton.
Political factors are the factors related to the government and politics that impact the operations of different businesses. In this section, we will discuss how various political factors affect Hilton.
Businesses are greatly impacted by political instability. Every business wishes for political stability because that’s when businesses prosper.
Similarly, political stability benefits Hilton. Tourism takes place when there is political stability, and Hilton generates revenue. On the other hand, in political instability, there won’t be much tourism or business activity, so the hotel chain won’t earn much.
Moreover, the buildings of Hilton Hotels can get damaged in case of political protests and riots.
Other than that, government support impacts Hilton significantly. Businesses are always looking for subsidies and tax breaks from the government. If the government announces subsidies or lowers the tax rates for the hospitality industry, Hilton will benefit from these incentives.
Furthermore, international relations also impact Hiton significantly. Hilton is a US hotel chain. Suppose the international relationship between the US and some other country deteriorates. In that case, Hilton might be forced to shut its operations from either side. This would make Hilton suffer financially.
Besides that, government policies regarding promoting tourism also greatly impact Hilton. Suppose the government makes policies to encourage tourism. In that case, it will benefit Hilton since an increase in tourism will increase the revenue made by Hilton.
Economic factors are linked to the global economy or a country’s economy. Different macroeconomic variables impact businesses differently. In this section, we will discuss how different economic factors impact Hilton.
One of the economic factors that impact Hilton is Inflation. Inflation has an adverse impact on businesses. Similarly, people will avoid traveling if an economy has a high inflation rate. As a result, the tourism industry will suffer. When the tourism industry suffers, Hilton will suffer.
Moreover, the interest rates have a significant impact on Hilton. When there are high interest rates, people save more and spend less. In that case, the revenue of the hospitality industry also falls.
On the contrary, when the interest rates are low, people are willing to consume more. In such an economic environment, Hilton would generate high revenues. Hence, low interest rates in an economy favor Hilton.
Besides that, if a country is experiencing economic growth, it means that the economy is spreading and businesses are prospering. Hence, high economic growth would attract business tourism, so Hilton will generate high revenue.
Furthermore, global economic conditions also impact Hilton significantly. If there is an economic recession, the global tourism industry will collapse as few people will still have enough money to travel.
Hence, during economic recessions, the hospitality industry will suffer, due to which Hilton will also suffer.
Social factors are associated with society and culture that impact businesses. In this section of the PESTLE analysis, we will analyze how different social factors affect Hilton.
The market is always dynamic, which means consumer preferences are constantly changing. These changing consumer preferences impact Hilton significantly. For example, a few decades ago, everyone traveled on vacation.
However, as time has passed, people have invested more in work, and fewer people tend to go on vacations. Moreover, one more change in the taste of people that impacts Hilton is people’s interest in camping.
As people’s interest is growing towards camping, fewer people are considering booking hotels like Hilton. This is how Hilton is impacted due to changes in consumer preferences.
Moreover, since Hilton is a multinational hotel and resort chain, it operates in different cultures. Hilton has to ensure that it doesn’t violate the cultural boundaries of any culture.
For example, in some countries, there is no concept of a combined pool of men and women. In such countries, Hilton has to ensure that it offers separate pools for both men and women.
Besides that, Hilton also has to keep the demography of the society in mind where it is operating. For example, suppose Hilton operates in a society where most people who visit the hotel are above 60. In that case, the hotel should introduce activities that elderly people enjoy.
Technological factors represent technological advancements and innovations that impact any business. In this section, we will discuss how various technological factors impact Hilton.
A few decades back, people had to go to hotels to book their rooms.
However, as technological advancement took place, people got the opportunity to book hotels through mobile Apps.
This has made Hilton more accessible to people, and online reservations have made booking more efficient, so more people can now book rooms at Hilton simultaneously.
Moreover, when Hilton Hotels started operating, there were no CCTVs installed in its hotels. However, due to technological advancements, CCTVs are installed in the hotel, ensuring security and maintaining accountability.
Other than that, using data analytics in the hospitality industry significantly impacts Hilton’s operations. Now Hilton can use its customer data to extract useful information such as its customer preferences and customer’s age group.
Hilton can also forecast the number of people visiting the hotel during peak season and make arrangements accordingly.
Furthermore, social media platforms are now being used for marketing purposes. Hilton can also use social media platforms to market its hotel chain. By doing so, the reach of Hilton will increase, and more people will visit the hotel.
Besides that, advertising on social media will cut down on the marketing expenditure of Hilton. The hotel chain can use that money on R&D to improve the customer experience.
Legal factors are associated with the laws and legal framework of the country where a business operates. In this section, we will look at the legal factors affecting Hilton.
Businesses have to follow the government’s laws where they operate, or they might have to face heavy penalties. Labor laws impact Hilton significantly. If Hilton operates in a country with strict labor laws, the hotel chain must be careful while dealing with the staff.
Hilton has to ensure no discriminatory practices are taking place on its premises. Otherwise, lawsuits can be filed against the hotel. Moreover, data protection laws also impact Hilton.
After some of the big names in the tech industry leaked customer data, governments across the globe have made strict customer protection laws. Hilton keeps a record of all of its customers.
The hotel chain has to ensure that its customers’ data doesn’t leak. If it gets leaked, Hilton might get banned.
Furthermore, the hospitality industry has to abide by a country’s health and safety regulations; otherwise, it might get sealed. Similarly, Hilton is a renowned hotel chain. It has to ensure that the food served in its hotel is healthy and of good quality.
If the food served by Hilton doesn’t pass the health test, the reputation of Hilton will be damaged, and the hotel chain might have to wrap up its business in a few countries.
Environmental factors are factors related to the environment of the country where the business operates. In this section of the PESTLE analysis, we will discuss how various environmental factors impact Hilton.
Hotels require a constant electricity supply. However, power supply cuts sometimes due to storms, floods, etc. Such natural calamities impact Hilton significantly since floods or storms might cut the power supply of Hilton.
Moreover, natural calamities can damage the Infrastructure of Hilton. This would cause inconvenience to the people in the hotel and create safety concerns for those residing there.
Besides that, people have become aware of how hotel plastic waste damages the environment. Hence, pressure groups are monitoring the waste management systems of Hilton.
Suppose the activists feel that Hilton is not processing its waste properly before disposing of it. In that case, they might ask the government to shut down Hilton.
Hilton is one of the most significant and renowned chains of hotels. It was established in the US by a man named Conard Hilton. The first ever Hilton was established in Dallas.
From there, Hilton kept growing and expanding its branches in different parts of the US. After that, Hilton went international by opening several hotels in different parts of the world.
Currently, Hilton has more than 584 hotels in six continents. Besides that, Hilton also provides employment to 159,000 people worldwide.
After looking deep down at the history of Hilton, we proceeded further and discussed PESTLE analysis. After that, we conducted the PESTLE analysis of Hilton.
The PESTLE analysis framework helped us examine how various external factors impact Hilton. We hope you would have enjoyed reading this article. If you found this article interesting and are intrigued by the PESTLE analysis technique, look at this example of PESTLE analysis.