If you have traveled to different countries, you must have seen one hotel chain in almost every country. So what’s that one hotel chain that’s present everywhere? Did you say, Hilton? I am sure you did.
Hilton is one of the hotel and resort chains that is spread all across the globe. Excellent service and ambiance add to the customer experience, due to which the demand for Hilton hotels and resorts is present worldwide.
Today, we will discuss the operations of Hilton in detail since, in this article, we will be carrying out Hilton SWOT Analysis, having already discussed the external factors having an impact on the hotel in our Hilton PESTLE analysis. Hilton is one of the hotel industry’s most renowned hotels and resort chains.
Before we carry out Hilton’s SWOT analysis, we must look at its history to know how such an amazing chain of hotels originated and evolved over time.
The history of Hilton goes back to 1919, when Conard Hilton, the owner of Hilton, purchased a local hotel in Texas instead of a bank. After six years, the first hotel that was opened was named Hilton.
The newly opened hotel was highly equipped at that time. For example, it had elevators, air shafts, and laundry shoots. Moreover, the rooms were built in the hotel in such a way that they don’t face the setting sun because it would raise the room temperature.
As the hotel attracted more customers, Hilton expanded its operations. In 1943, the hospitality company bought two hotels in New York. A couple of years later, Hilton got listed on the New York stock exchange in 1946. At that time, Hilton was the first hotel company listed on the stock exchange.
As the hotel chain grew, Hilton felt the need to introduce innovation. In 1947, Hilton became the first hotel in the world that had installed TVs in hotel rooms. Moreover, Hilton also introduced the modern-day reservation system.
In 1949, Hilton finally decided to move its operations internationally. Hilton opened its first branch in Puerto Rico. From there onwards, the hotel chain kept opening more branches overseas to spread its operations across the globe.
Over the years, Hilton kept on developing ways through which they could facilitate their customers. In 1955, Hilton developed its first reservation office. Hilton kept on expanding domestically and internationally. In 1995, it launched its website to reach more audiences.
Hilton did some mergers along the way to further consolidate its position in the market. By 2009, the hotel chain was operating in 76 countries. This made Hilton the largest hotel that was offering full service.
Over the years, Hilton evolved to reach where it is today. Currently, Hilton is present in 122 countries and owns more than 7,000 properties worldwide. Hilton hotels are known as one of the best hotels in the world.
Before COVID-19, Hilton was generating around $9.5 billion from around the world. Currently, Hilton is the 3rd largest hotel company by market cap. Moreover, as of 2021, Hilton had employed 142,000 employees worldwide.
Now that we have discussed Hilton’s history and current operations let’s look at the SWOT analysis. SWOT analysis is a business technique that analyses an organization’s strengths, weaknesses, opportunities, and threats.
A SWOT template highlights the external and internal factors responsible for affecting an organization’s operations. Now that we have also discussed SWOT analysis, let’s proceed further and carry out Hilton’s SWOT analysis.
Strengths are the positive things that an organization possesses. These strengths provide an edge for companies to compete in the market. Any organization that possesses more strengths will be able to compete well in the market.
This section of the SWOT analysis will have a look at the strengths that Hilton possesses.
1. Worldwide Recognised Brand
Brands try hard to gain recognition across the globe. This helps them in increasing their customer base and revenue. If a brand is globally recognized, it gets easier for that brand to attract customers.
Hilton hotels and resorts are a world-class hospitality company and one of the largest global hotelier brands. Hilton operates in more than 122 countries and owns more than 7,000 properties worldwide. Hilton is one of the most reliable hotels in terms of security and comfort in different parts of the world.
This acts as a strength for the brand because it helps in increasing the brand’s customer base.
2. Huge Customer Base
Businesses look for ways to increase their customer base because as the number of customers increases, more revenue is generated. In the case of Hilton, it has a wide customer base.
Currently, Hilton has more than 112 million members registered worldwide. These members play a significant role in making Hilton such a famous brand. Besides that, due to the presence of so many customers, Hilton manages to cover its costs and earn some profit, making the business beneficial for the shareholders.
3. Satisfied Workforce
Employees are the engine that pulls the business in the right direction. It is very important for businesses to keep their employees satisfied. Hilton is considered a brand that is famous for keeping its employees satisfied. In 2020, Hilton was added to the Fortune list of the top 100 companies to work for.
The Hilton hotel is known for its great treatment of workers and their families. The brand understands the importance of ensuring they provide their employees with all the possible facilities.
Hilton hotel provides its employees with several benefits, such as health and insurance coverage, educational assistance programs, saving plans, and more.
Weaknesses account for drawbacks that hinder the growth of any company. Of course, every company has some drawbacks. However, work should be done to cater to these weaknesses. In this section, we will highlight some of the weaknesses of Hilton.
1. High Number of Staff
Businesses need workers to carry out their daily operations. However, if the workforce grows too big, it can become a liability for the company. The hotel industry requires a high number of employees due to the nature of the business.
Since Hilton is a hotel chain, it requires a lot of workers. Currently, Hilton has a workforce of 142,000 employees. Having such a high number of employees hurt Hilton since affording them is difficult for the brand. In addition, paying salaries to so many employees would increase Hilton’s operational costs, lowering its profit margins.
2. Bad Reviews
Social media is an essential tool used for marketing in today’s world. For example, people often try a product or go to a restaurant and give reviews about the place. These reviews act like word of mouth, and they shape other consumers’ points of view.
Some customers of Hilton hotels have rated the hotels poorly on various social media platforms. According to these reviews, the brand’s customer service was poor, and the hotel’s ambiance wasn’t good. Such bad reviews spread like a virus and damage a brand’s reputation.
3. Data Breach
Over the years, as the world has moved towards technological advancement, businesses have realized the importance of data. However, we often hear news of data breaches in the current era. Big brands are often accused of misplacing data or getting their data hacked. Similarly, a few years ago, Hilton failed to protect the data of its users.
Hilton had a security problem with its cash register. In addition, the company’s credit cards were compromised due to a data breach. In early 2018, the hotel chain had to pay 700,000 dollars as a penalty to resolve this issue. This incident seriously impacted customers’ confidence in the company and its services.
Opportunities mark the chances available for any organisation to succeed in the future. Every organisation is provided with some opportunities to do well. In this section, we will analyse some of the opportunities that are present for Hilton.
1. Look Into Social Media Marketing
Businesses nowadays have changed their ways of marketing due to the technological advancements we have recently experienced. Instead of investing in Billboards, TV ads, and pamphlets, businesses have shifted to social media marketing.
Hilton can hire social media managers and market its brand on social media platforms such as Facebook, Twitter, Instagram, etc. By marketing on these platforms, Hilton can reach new customers, which can help the brand in generating more revenue.
2. Expansion to Developing Countries
Businesses often look forward to expanding their operations in developing economies since they have high demand and cheap labor. Both of these things are very beneficial for any company.
As we know, one of the best ways to grow is to enter new markets. Keeping that in mind, Hilton should penetrate developing countries of Asia and Latin America. They have great growth potential, and the investment wouldn’t be high, but it would generate a lot of revenue for the company.
3. Mergers and Acquisition
Brands are always looking to increase their customer base and share in the market. However, one of the easiest ways to do so is to form a merger or acquire any pre-existing brand. These practices are used by businesses to consolidate their position in the market.
Hilton being a dominant player in the market, has the opportunity to form mergers and acquire pre-existing small businesses to increase its customer base and profit margins. By forming mergers, Hilton can use the expertise of different brands in different operations. Moreover, acquisitions will increase the customer base of Hilton.
Threats Faced by Hilton
Every brand faces some threats from the environment where it practices business. These threats must be catered timely, or they can damage a brand. In this section, we will look at some of the threats faced by Hilton.
1. Legal Cases
Any company operating in a market feels threatened by legal procedures since they negatively affect a brand’s reputation. Brands don’t want to get involved in lawsuits because they push away investors and customers.
Hilton Hotel lost its lawsuit with Starwood some years ago. The court gave the verdict in favor of Starwood, and Hilton had to pay a fine of 75 million dollars. Many investors and stakeholders were affected by this lawsuit, which pushed them away from their business deals.
2. High Competition
Businesses always avoid markets where there is intense competition since the result of high competition always leads to low-profit margins. Due to price wars and unnecessary marketing expenditures, businesses observe severe losses. Hilton being a hotel chain, operates in a highly competitive market.
Hilton’s hotel chain has been around for over 100 years and has expanded to several countries. However, there are some threats to their future growth if it doesn’t keep up with the pace of technology. For example, Marriott International and other hotel brands are increasing their market share quickly by offering better services at lower prices.
3. Russia-Ukraine Conflict
Many businesses have wrapped up their operation in Russia after the war between Russia and Ukraine. Hilton is among those companies that have been operating in Russia for years. However, as the conflict between the two countries started, Hilton decided to suspend its development operations in Russia.
By taking this step, Hilton closed the market of millions of people. As a result, Hilton has lost a significant share of its revenue which it used to generate from Russia. In addition, Hilton now feels threatened since no one knows when Hilton will be able to continue developing in Russia.
Hilon is a renowned hotel and resort chain that operates in almost every country. Its roots can be traced back to 1919, when its owner entered the hotel business. Over the years, the operations of Hilton evolved, and soon it became one of the leading hotel chains in the world.
After discussing Hilton’s history and current operations, we proceeded and carried out Hilton’s SWOT Analysis. The SWOT Matrix highlighted the strengths, weaknesses, opportunities, and threats faced by Hilton.
Besides learning about the internal and external factors affecting Hilton’s operations, we are sure you must have understood how to conduct a SWOT analysis from this article. If you still have any queries, don’t hesitate to look at some examples of SWOT analysis.