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Competition in the Hotel Industry

Competition in the Hotel Industry

Hotel, Tourism and Hospitality Industries

 

Contemporary Issue: Competition

 

The aim of this report is to analyse Hilton Hotel’s contemporary issue which is affecting the hospitality industry overall.  Currently, hospitality industries are facing many challenges and one of them is high level and intensity of competition.  I will be discussing current Hilton Hotels’ competitors, how it is affecting the company, and I will use my personal work experience in this hotel and talk about how the issue is implicating the management.

So what is Competition? Cambridge English Dictionary describes it as “a situation in which someone is trying to win something or be more successful than someone else”. Clearly, hospitality industries have been competing for a long time, but what are the hotels doing to stay relevant and innovative during these changing times and demands of new age travellers?

Hilton group of hotels was established back in 1919 by Conrad Hilton. It provides customers with a great customer experience at their locations. It has 14 different brands and customers. It is one of the largest organisations among the hotel brands in the world. Hilton Hotels aim at business and leisure travellers. Nowadays, there are so many options where to stay while travelling and customers are more conscious about the price and quality which makes the competition amongst hotel industries very intense.

Hilton SWOT Analysis  

Strengths Weaknesses
  • Quality stay
  • Upscale to mid-range accommodations
  • Many locations worldwide
  • Helpful, well-trained staff
  • Wide price range
  • Well known, strong brand image
  • Wide range of services
  • iPhone and iPad touch applications
  • Too expensive to many, price-conscious consumers
  • High operating costs as result of being premium hotel service
Opportunities Threats
  • International expansion of hotel and resort industry
  • Take advantage of mid-priced business class market
  • Mid-range to low-cost hotels
  • Heavy competition from similar competitors (Westin Hotels and Sheraton Hotels)

Hilton Hotels are currently competing with AirBnb which offers cheaper options for customers and sometimes with better rooms, which are en suite, has kitchen etc. AirBnb was founded in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk. Other huge competitors to Hilton are Marriot Hotel, Hyatt Regency, Radisson Blu. These hotels are offering similar services, sometimes for a lower price.  People are more price conscious and are looking for cheap alternatives. People are staying with their friends or relatives, hostels and motels. The competition amongst hospitality, hotel and tourism industries became fierce. Organisations must stay innovative and think about new ideas how to attract the customer. Two reasons behind this competition are: technological adaptation and changing customer profile.

Looking at the first reason, we can see how fast the world changed after technology stepped in. It contributed to various fields of the industry, for example marketing, communication, branding and outreach. Travel and hospitality sectors are forced to invest in mobile apps, websites and social media to stay relevant.  Hotels are introducing augmented reality interactions,  reality tours and robotics to satisfy customers’ needs.

Second reason is changing customer profile. It means that hotel and tourism industries are facing a change in the demographic and psychographic profiles of customers. Millennials have different expectations and lifestyle which challenges the industry to change and keep up to date. Hospitality industries need to think about new ways how to engage with the younger generation. People are more aware of climate change and the way their food is produced. Organisations are forced to reduce their waste and introduce sustainable options, for example organic food.

 

Possible hotel critical success factors

1. Added-value facilities in guest rooms
2. Central sales or reservation system
3. Choice of room type for guests
4. Consistent accommodation standards
5. Consistent service standards
6. Convenient locations
7. Corporate contracts
8. Customer loyalty and repeat business
9. Customer surveys and feedback
10. Design and look of guest bedrooms
11. Disciplined operational controls
12. Efficiency of guest service
13. Geographic coverage of hotel network
14. Good value restaurants
15. Guest bedroom comfort level
16. Guest security
17. Guest recognition
18. Hygiene and cleanliness
19. Low prices
20. Operational flexibility and responsiveness
21. Quality audit
22. Quality standards
23. Responsiveness to customer demands
24. Size of guest bedrooms
25. Size of hotel network
26. Standardized hotel design
27. Strong brand differentiation
28. Value for money accommodation

Source: Bob Brotherton, “Critical Success Factors in UK Budget Hotel Operations,” International Journal of Operations & Production Management, Vol. 24, No. 9 (2004), pp. 944-969

How competition is implicating the management? 

 

Hospitality and hotel sectors are service related industries. High customer satisfaction is number one priority and to earn customer’s loyalty, they must provide exceptional service and high quality. Managers need to be trained in various hospitality skills to achieve the targets.

I have interviewed the assistant manager of Hilton Garden Inn in Birmingham, Sue-Ane Johnson and asked her how competition affects management processes. She said that competition is very fierce between other hotels such as Marriot Hotels. They offer similar services and for smaller price. To stay relevant in hotel industry, managers have to make sure that they are providing exceptional customer service to the guests and make them want to come back to the hotel again. To do that, management have to invest in technology and training processes. Hilton Hotels have an online website which is called Hilton University, and staff members have to complete the training regularly and keep up with the updates. Sue-Ane said that it is hard to keep the engagement between her and staff because some workers are not that keen to learn and develop themselves in hospitality sector. Some staff leave the company because of the high number of trainings they have to complete and because they find it boring.

From my personal experience, I find the training website very helpful. It helps me to learn about the company, its’ values and it definitely improves my customer service. I can see that some guests come back to the hotel just because they love our customer service and how we engage with them. It takes a small amount of effort to make someone’s day brighter and it feels great to know that you made a guest smile.

My Learning Experience/Reflection how it will support my professional development

 

Reflection is very important part of the learning process. It allows you to look at yourself from the side and observe your mistakes, transform your experience into knowledge and apply it to the future situations.  Reflective learning is used “to uncover the knowledge used in practical situations, by analysing and interpreting the information recalled” (Fitzgerald, 1994). In this part of the report, I will talk about how Contemporary Management Issues module helped me to learn about my chosen organisation, reflect on my work experience using Gibbs’s Reflective Model  and analyse my learning process throughout the 1st semester.

This module has taught me to look deeper into hospitality industries and notice how complicated the business is. I have learned that there are different processes and ways of management for each different department and that it takes a lot of effort to develop your skills. During this semester I was more conscious of my actions at work and I have improved my soft skills, such as communication and body language. I took time to read customers’ reviews and analysed the problems running in the company. It led me to higher customer satisfaction and positive feedback from guests.  I know that in my future career I will be more aware to look deeper in organisation and existing problems and try to reverse them with more training and increase the engagement between the company and customer.

Description: what happened?

Customer was complaining about the temperature in the hotel room. It was too cold for him.  He was angry and upset.

Feelings: what were you thinking and feeling?

I was thinking that customer simply does not know how to use the air conditioning system. I was explaining how to regulate the temperature in the room. Customer was angry because he tried the method, I was talking about, but it did not work for him.

Evaluation: what was good and bad about the experience?

This experience made me realize that I need to listen to the guest more and stop thinking that I can solve all problems without knowing the real reason behind it. I made the guest upset and angry just because I did not want to believe him, and I thought that he does not know how to use the AC.

Analysis: what sense can you make of the situation?

Just because I had similar situations where guests did not know how to use AC in the past, I decided that this customer is the same. I wanted to solve a problem quickly just by explaining how to use it and did not make effort to go and check his room.

Conclusion: what else could you have done?

I could have gone to his room and check the air conditioner. I made him feel that I know better than him and made him feel even more upset because I did not believe that AC is broken.  Next time when I will have to deal with similar situation, I will know that I am not always right and sometimes I need to listen carefully and do not make assumptions.

Action plan: if it arose again, what would you do?

I would listen to the guest more carefully and not be quick to think about the solution without going and checking the problem myself. I would not be quick to judge and assume that someone is not experienced enough and does not know how to use the equipment.

REFERENCES

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  • Cambridge Advanced Learner’s Dictionary & Thesaurus (2018) Cambridge University Press. Available at: https://dictionary.cambridge.org/dictionary/english/ [Accessed on 18 November 2018].
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  • The 4 Contemporary Issues in the Hotel Industry (2015) Hotel Internet Marketing. Available at: https://roomkeypms.com/blog/the-4-contemporary-issues-in-the-hotel-industry/ [Accessed on 8 November 2018].
  • Travel and Hospitality Industry Outlook (2018) Deloitte Insights. Available at: https://www2.deloitte.com/us/en/pages/consumer-business/articles/travel-hospitality-industry-outlook.html137-145 [Accessed on 15 November 2018].
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  • The Current Hospitality Scenario: Competition, Upswing, Marketing (2018) 4Hoteliers. Available at: https://www.4hoteliers.com/features/article/11027 [Accessed on 21 December 2018].
  • Top Hilton Competitors across the world (2018) Marketing91. Available at: https://www.marketing91.com/top-hilton-competitors-across-the-world/ [Accessed on 21 December 2018].
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  • Vinitia E. Mathews, (2000) “Competition in the international hotel industry”, International Journal of Contemporary Hospitality Management, Vol. 12 Issue: 2, pp.114-118.


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