SWOT analysis of Hilton Worldwide
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. The main shareholder for the last two decades was Blackstone hedge fund investors, but they have been selling off their stake due to favourable stock prices lately.
Strengths of Hilton Worldwide
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 rises 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, 2018).
A strong brand image over the years saw the development of well known portfolio of hotel brands with numerous awards, 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.
Over 50 million customers are in Hilton’s loyalty membership programme covering the 13 brands at over 5,000 hotels worldwide.
Global presence is also strength of Hilton. Hilton has hotels in over 5,000 locations in over 100 countries – a hotel for every style, budget and occasion.
Hilton’s financial position is strong as well. The hotel reported $9.1 billion in revenue for fiscal 2017, up from $7.3 billion in fiscal 2016 (Hilton, 2018).
Weaknesses of Hilton Worldwide
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).
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 and joint ventures worldwide with the Chinese, Indians, Japanese 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).
Threats to Hilton Worldwide
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.
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 (New York Times, 2010)
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: 31 July 2018
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 (2018) About us, available at: https://www.hilton.com/en/corporate/ [Accessed on: 31.07.2018]
Lattman, P (2010 “Hilton and Starwood Settle Dispute” available at: https://dealbook.nytimes.com/2010/12/22/hilton-and-starwood-settle-dispute/?region=stream&module=stream_unit&contentPlacement=2&version=latest&pgtype=collection&action=click&rref=collection%2Ftimestopic%2FHilton+Hotels+Corporation&contentCollection=business [Accessed on: 04.07.2018]
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.