Essay Sample on Uncovering Hilton's Global Reach: A Century of Hotels & Resorts

Introduction

Hilton is a United States multinational firm that operates a diverse portfolio of hotels and resorts, either as wholly owned subsidiaries or through franchising. Conrad Hilton founded the company in 1919 in Cisco, Texas (United States Securities and Exchange Commission, 2019). However, it relocated its headquarters to Tysons Corner, Virginia, in 2009 (United States Securities and Exchange Commission, 2019). To date, Hilton operates about 900,000 rooms in more than 100 countries around the world (United States Securities and Exchange Commission, 2019). Some of its brands include Conrad Hotels and Resorts, Hilton Hotels and Resorts, Hilton Garden Inn, and Embassy Suites Hotels, to name a few (United States Securities and Exchange Commission, 2019). These brands offer products and services, such as food, lodging, dining, restaurants, and loyalty programs. Diversification is the primary strategy that Hilton utilizes to grow the size and revenue, as evidenced by its vast global presence. Therefore, this company will likely continue expanding to different regions in the world. Hilton also adopts differentiation to maintain leadership in the hospitality industry. In differentiation, the company develops luxurious products and services that foster the utmost customer satisfaction. As such, it has maintained the highest market share in the industry. However, Hilton also utilizes focused differentiation that involves developing products that meet the needs of specific customer segments. For instance, it has different categories of luxury brands that fulfill different levels of customer expectations, such as price and quality. Indeed, even though Hilton primarily focuses on luxuries that attract premium prices, it also has low-priced products.

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Notably, Hilton targets customers with a high level of income from the upper social class, who can afford its premium-priced luxuries (United States Securities and Exchange Commission, 2019). Most of its customers are professionals enjoying lucrative jobs who may also travel across the world at different times of the year. Essentially, digital hospitality is one of Hilton's competitive advantages as it improves the convenience and the quality at which the company delivers services (Hilton, 2018). For example, Hilton has recently digitized the booking of hotels through mobile-based apps that optimize the client experience. In the digital booking, clients can access a digital key from the Hilton Honours app that is available in smartphones (Hilton, 2018). Ultimately, Hilton customers can plan different aspects of a trip like booking, bedtime, and time to end the trip without involving a human agent. Also, Hilton possesses a competitive advantage in targeting and positioning. Unlike many other hospitality companies, Hilton targeting involves segmenting customers according to the benefits they seek. Precisely, customers for the hospitality industry seek several benefits such as extended stays, luxury, budget accommodations, and vacation properties, amongst others. Therefore, hospitality firms may not fulfill customer expectations by a single product or service. With that realization, Hilton has created diverse, branded hotel lines to meet the heterogeneous nature of hospitality demand (United States Securities and Exchange Commission, 2019).

So far, Hilton has done remarkably in the use of technology for competitive advantage. Digital keys discussed above are some of the suitable examples of how the company is capitalizing on the emerging technologies. However, given its vast geographical presence, Hilton needs to decide on the technology that can facilitate cost reduction and customer satisfaction and engagement, all of which can improve its financials. This decision-making process needs to include the insights of the balanced scorecard and the cost-benefit analysis of the potential technologies, as exemplified by the following discussion.

The Balanced Scorecard

The balanced scorecard (BSC) is a tool used for performance management or implementation of business strategies (Kaplan, 2009). The financial and non-financial perspectives in the order of importance are customer, financial, learning and growth, and internal. The rationale for this ranking is that a business must satisfy customers to realize the primary purpose of a business, which is profit optimization. Learning and growth appear in the third position because they only support the achievement of customer satisfaction and financials. Internal processes though highly important, exist as support for the other set of goals.

Customer Perspective

The customer perspective includes objectives that can enable the company to optimize customer satisfaction (Kaplan, 2009). Here, Hilton needs to improve customer engagement. This goal is realistic because there are several techniques for enhancing engagement, such as utilizing technology to boost interactions or inform customers of the available products. Thus, it can attract new clients. Another goal is fostering customer loyalty to gain customer lifetime value. Hilton can realize customer loyalty by offering an authentic experience, digitizing most of its services, and keeping engagement with customers from diverse areas. Essentially, customer loyalty assures consistent sales and profitability and thus can play a pivotal role in keeping Hilton ahead of its competitors (Magatef & Tomalieh, 2015). Lastly, Hilton needs to solve customer problems that can prevent them from accessing its brands. For instance, the company may need to market extensively to inform customers of the characteristics of its offerings. This extensive marketing can increase brand awareness and thus translate to increased sales.

Financial

The goals related to the financial perspective represent objectives that can optimize an organization's finances (Kaplan, 2009). Therefore, one of the goals is to increase sales revenue, which realistic because various mechanisms can achieve it. Primarily, an increase in the number of customers that Hilton serves within a particular timeframe might be a significant driver of financials. Market penetration is one of the reliable ways that businesses apply in increasing customer base (Chandola & Fu, 2017). In essence, sales revenue is important since it indicates profitability, company valuation, and customer satisfaction. Also, the company needs to reduce costs. This goal is achievable because there are various ways that Hilton can adopt to fulfill it. For instance, it can choose the technology that involves the least purchase and operational costs. The importance of the reduction of costs is that it can increase profit margins and encourage a culture of efficiency. Lastly, Hilton should aim at improving profit margins, which can be achieved by reducing costs or increasing sales revenue. Profit margins indicate the attractiveness of company products or services.

Learning and Growth Perspective

Hilton needs to develop training programs to enhance employees' skills for new technologies (Kaplan, 2009). The company has recently trained employees about teamwork using virtual reality. Thus, it can also adopt the same experience to prepare the staff for conventional technologies. Training equips employees with the ability to utilize emerging platforms to achieve great customer service. The company also needs to focus on maintaining innovation leadership. This goal can be enhanced by valuing employee input and incentivizing creative ideas. Also, Hilton needs to invest in research and development, which can offer data-driven insights for fostering competitiveness and growth.

Internal Perspective

The internal perspective guides a business to determine internal processes that it must undertake to meet customer needs (Kaplan, 2009). One of the goals related to this perspective is the aim to develop or purchase technologies that promote marketing. Marketing technologies, even those related to virtual reality, are readily available in the market. The acquisition of virtual reality technologies can facilitate brand awareness and customer attraction (Gandhi & Patel, 2018). Also, Hilton needs to continue diversifying services to fulfill different customer needs. Diversification is a proven customer attraction technique as people prefer to purchase from businesses with broad product portfolios (Ganesan & Rajanbabu, 2011). Finally, Hilton needs to boost the convenience at which clients access its services. This can be achieved by increasing customer knowledge about the company's operations, which will undoubtedly promote customer traffic.

Three Potential Technologies

Chatbots

A chatbot refers to a software application that uses artificial intelligence to enhance online chat either through text-to-text or text-to-speech (Di Gaetano & Diliberto, 2018). Therefore, this technology can perform most of the functions that are traditionally undertaken by the communications department. Interestingly, a chatbot is designed to convincingly simulate how human beings would react if they were the conversation partners (Di Gaetano & Diliberto, 2018). The chatbot technology is one of the latest artificial intelligence machines that businesses have capitalized on to optimize customer service (Di Gaetano & Diliberto, 2018). In the hospitality industry, customers can schedule room cleaning and receive pre-arrival reminders. The most important feature of chatbots is that it facilitates client engagement before booking, after booking, and even after the departure. Additionally, a chatbot is effective cost reduction technology as it does not necessitate the hiring of additional personnel to manage its operations. Notably, the machine learns automatically and can, therefore, interact with customers just like a human being. Apart from these purposes, hospitality firms like Hilton can also use chatbots for marketing. For example, Hilton may utilize chatbots to respond to customer comments on Facebook without involving its communications department personnel.

Notably, the costs of building chatbot systems can be exorbitant, approximately about $340,000 (Apexchat, 2019). The company may avoid this huge expense by subscribing to chatbot providers. However, it will still incur some costs. If Hilton chooses this latter option, it will need to pay a one-time fee of $1,495 but subsequently pay $500 every month (Apexchat, 2019). However, the benefits associated with chatbots make this investment worthwhile. Through chatbots, the company will save time due to automation, save money, augment customer satisfaction, and expand customer base. Another important note is that it fits in many elements of the economic, sociocultural, and technological forces of the hospitality industry. In terms of economic forces, highly competent employees enable an organization to implement sophisticated information systems to enhance efficiency and effectiveness. Hilton employees are highly competitive due to the company's recent programs that focus on equipping workers with emerging trends. Therefore, even though chatbots are the most recent technologies, they can be adopted in Hilton considering the high level of skills possessed by the company employees. The economic wellbeing is another important economic force in this regard. For instance, if a society achieves a high quality of life, businesses respond by offering technologies that match the prevailing standard of life. In recent years, most economies around the world have prospered at least compared to the previous century (Samimi & Jenatabadi, 2014). Thus, customers across industries have been demanding the most sophisticated technologies, and this affirms why Hilton needs to ado...