Hospitality refers to the management of hospitality services that includes:- beds; breakfast; resorts, cruise and other hospitality services. The assignment further focuses ion the nature of hospitality products and the services provided by them. It means the products offered by the hotels and other service industries in this line are of what quality and it further focuses on the evaluation of the factors that influence the demand within the hospitality sector. The report further lays emphasis on the comparison in respect of profiles of different customers and their requirements in respect of the provision of the hospitality. The assignment further lays emphasis on the key stages of the products and services that are being offered. The company on which report is being made is:- Hilton Hotel.
1.1 The nature of hospitality product and service areas:
Culture is the most important aspect of the Hilton company for arguments and complaints. Companies whose cultures are explained weaker results in countries with very highly cultures, and reflection of the national cultures, so they are different culture to another countries.
Hilton company create the right goods and service available to the right customers at the right time and right place. That is tangible service of the company. And take a high level of risk. The tourism services provides but they are waste of the produced (Styles, Schoenberger and Galvez-Martos, 2015).
Intangible services, such as having an honest and friendly employees can fast food destination from other, both of which of the similar kind of product. Customers are take risk buying these services; tangible services are good service and product ensures again repeat customers. The intangible services are very differentiates the services from the goods. Intangible is very critical for a consumer to know what consumers will be getting in advance. Hilton company keeping up with a good routine to provides to guests. And also looking to spend good time with their customers.
Hilton hotel departments in room division like front office, housekeeping, guest service, security, reservations and communication. These departments using needs of customers, from their first contact and reservations to check out. It is used by Hilton hotel to coordinate efforts of the housekeeping department. A rooms' division employer is directly complain to the deputy manager and general manager. Room division manager is responsible for front office. Bantique service is good services. Includes great room service and customers a high range of accommodation to create their stay comfortable. This easy check in and check out service. Hilton hotel 24 hour safe security provides to guests ( RadosavljeviÃ„â€¡, JevtiÃ„â€¡ and Klimenta, 2016 ).
1.2 The affecting patterns to hospitality operations:
Culture- The culture objective defines guests satisfaction and that means to customers from different cultural and religion background. The Hilton company provide the best quality of product and services based on their customers. They have through importance of culture background in their customers.
Seasonality- the highest season using the festive days like November and December for attracts customers than another seasons. Costumers are demand for good product and services. They want to minimum price to good quality of products and services. Hilton company effects on high seasonality, because there have been a major role in explaining customer like high peak lord with different demands and expectation (Martínez-Martínez, Cegarra-Navarro and García-Pérez, 2015).
Healthy Living- Customers today are taking pay of their health fitness; Hilton hotel are responding with good health fitness, pools and spas. Customers are expecting wellness service option. Involves good and healthy food, increasing social trends, yoga spaces etc. they want to hotel rooms in exercise club and shower water.
Influence economic- Hilton hotel in influence economic condition then involves most of department like management department, human resources' department, account department etc. they are not working properly so increasing influence economy. So hotel in customers demand decreasing (del Alonso-Almeida, Bagur-Femenías and Llach, 2015).
1.3 Different customer profiles and their expectations and requirements
Every consumer have their own perceptive and their need which can fit in the outline they made. In the hospitality business the preference can be in limit of price range, place, like, services etc. Following are the different expectations based on customer profile of Hilton Hotels and Resorts:
Power of spending- Spending power basically depends on the income of consumer. And the income depends on the employment and pay off. The higher they earn, higher they can spend and in opposite the lower they earn, spending power is also low.
Types of hospitality business- Hospitality industry can be classified in four categories. Travel & tourism, Food & beverages, Lodging and Refreshment. Hilton is type of travel and tourism hotel where people spend their money on food and accommodation with this also they spend on food as well, when they are there for business trip or family vacation (Borch and Batalden, 2015).
Pricing consideration- Hilton Hotels & Resorts is a great place for those who travel and on for their vacations. In this segment youth, families, business person, couples are included. As some want affordable and some cannot concerned with price range, they just want the best services. Accordingly, Hilton is segmented its price range according to the services and consumers.
Expectations and requirements- Different consumers have different expectations and requirements. Thus, Hilton Hotels & Resorts fulfil their demands and provide them services according to their expectations.
Meal experience- As differentiation in consumer can vary their wants and needs. A health conscious wants the meal not so heavy. Families may have kids too, so the meal is eatable for kids (Hartman, 2016).
1.4 Factors affecting average spending power
Customers are provided huge range of services on different piece level in hospitality businesses, this decides average spending power of consumer. Following are some different factor which can affect average spending power of consumer:
Size of Income- Spending power is mostly based on the income size of consumer. If the income is higher, they spend more money or they upgrade their services accordingly.
Status- This factor include different type of people, some are self conscious to showing off their status to the people or some are the royal persons. If a person who is conscious about showing off his/her status to everyone, they will increase their spending power for purchase a high class- luxurious room in Hilton Hotels & Resorts. And if a individual is royal personality then obvious they cannot minimize the cost, and pay higher cost for better services (Bamber and et.al., 2014).
Social/Cultural influences- Average spending power can also influenced by social or cultural factors. It includes- main festivals, special occasions, an important business conference or social meetings, big cultural event, etc. On this big or important days individual spend more than usual days.
Economic Situation- It includes some uncontrollable economical conditions. It is over the expectations of consumers, sometimes economic conditions forced to spend less or high beyond their expectations.
2.1 Evaluation of the key stages in product and service development
It is important in every business to develop the products and services in certain times, for a rapid and consistence growth. As an operational manager of Hilton Hotels & Resorts, it is important to analyse the key stages, which are as following:
Idea generation- Ideas can comes from anywhere, in any form, and can come in huge number. For generating and selecting a best suitable idea it is important to analyse some factors, which are- internal and external analysis, current trend of marketing, SWOT analysis, also they can analyse what are the need and want of consumers. With the analysing, industry can generate ideas accordingly (Evans, 2015).
Idea screening- After generating the ideas, next stage is to select the best out of them. In product development screening of idea is basically filtering and taking those ideas which are suitable and feasible, and dropping which are not feasible. In hospitality businesses there are many ways of developing products and services, but it is important to select those ideas which are fitted in the criteria.
Concept development and testing- The concept in product and services development need to be tested after screening. Concept development is mention best and top features of ideas. For hotel business, idea should be appropriate. For testing, the concept will tested on selected consumers. It will give a brief idea about the best concept among the other concept tat which will satisfy consumers or not, or meet the consumers wants or not.
Business analysis- After having finalized concepts, the other strategies of businesses should be analysed and implemented. It give brief about future. Business analytics included- pricing strategies, competition, etc. In hospitality business it is important to analyse competition in the market, pricing and costing factors, segmentation of business and services, consumer preferences and their demands (Van der Wagen and Goonetilleke, 2015).
Commercialisation and launch- In this stage marketing mix should use. Consumer segments should done according to the services. Process of introducing the services should be manage and implemented systematically to gain financial satisfaction. The launch of the new developed services and products of the hotel industry done through advertising, marketing campaign.
2.2 features which contribute towards the customers’ perception of products and services.
Brand-Image: Hilton hotels have a solid brand image globally which has attracted a large customer base for them. It is because of the image Hilton has that everyone wants to go there and experience their products and services. Hilton has 97 years of experience in hotel industry which has created a tremendous goodwill for the corporation that people without thinking twice will go to its luxurious venues. The brand's reputation has a very crucial role in developing the positive attitude towards Hilton;s products and services. Brand-image creates an impression on the minds of the customers and it comes after years of hard work(Bowie,et.al.,2016). Although the brand image would not sell the Hilton products and services by itself but it does create a positive impression on the customers about expected products and services which the brand has promised.
Nutrition and Dietary Requirements: People nowadays have become cautious towards their health, Hilton recognised this need of their customers and launched its healthy menu programs to provide delicious, nutritionally balanced diet to its customers. Personalization has led Hilton to outperform the industry's benchmarks. This nature of Hilton to adapt changes according to the customers needs and requirements has positively impacted the customers perception about the Hilton hotels. All these personalised services induced customers to speak pleasant words for the Hilton. Customers prefers restaurants, hotels which provide nutritious products because nobody wants to risk their health, and when the hotels like Hilton provide such offerings, customers perceive that hotels are socially responsible(Evans,2015).
2.3 opportunities and constraints affecting product and/or service development within a hospitality environment.
Brand-image: Hilton has a spectacular image all over the world thus, it has an opportunity to enter into to the emerging markets of the world either by establishing its own premises or coming together with the aspiring hotel entrepreneurs. Such a strong brand image have given opportunities to Hilton to expand its empire in the developing countries.
Standardisation: Standardisation means the minimum quality of products and services, a hotel has to provide to its customers along with some customized services according to the needs and requirements of the customers(Van der Wage and Goonetilleke 2015). The Hilton group of hotels already provide par excellence services but it has opportunities to continuously review the industry standards and adapt itself to the dynamic business environment to remain the leader in the hospitality sector.
Availability of resources: Availability of resources is a matter of concern for The Hilton group. Resources include finance, physical location, and skilled personnel which are scarce. These resources are to be optimally acquired and efficiently managed in order to have a competitive advantage over other hotels in the industry.
Accommodation Facility: Accommodation facilities are to be according to the customers preferences and the latest trends in the industry. This could be a threat for Hilton group as it demands a lot of R&D (King, 2017). market research to know what their customers expects from them. Customers wants the best accommodation facilities or else they will shift towards its rivals as the hospitality market is highly elastic in relation to the value paid to the services experienced by the customers.
2.4 Different merchandising opportunities for hospitality products and services
Merchandising is the activity which is concerned with sales and purchasing activities within the organization. Hilton Hotel & Resort is prior for royal people, business persons and travellers. In the combination people have to travel for businesses and refreshments purpose as well, which help in increasing the hospitality businesses.
In most situations, travellers want less or more of high quality services, which is based on their spending power. That's why Hilton have the opportunity to generate high value with superior charge (Bowie and et.al.,2016).
If there is improvement in traveller's economic condition and their country's economic situations, then it will give the opportunity of taking advantage of merchandising to the hospitality businesses.
3.1 Various methods of pricing consideration use in hospitality industry
In hospitality businesses, there are various types of pricing methods are observed. Like: cover charge, cost oriented pricing, market oriented pricing, minimum charge, service charge, market oriented pricing etc.
a.) For Hilton Hotels & Resorts best suitable and applicable pricing methods are:
Cost oriented pricing- This pricing strategy is based on the cost of production. This method is simplest and flexible among all the methods. Cost based prices are easy to manage, if costs get higher, it is simple to adjust price as per the situation. It include direct and indirect costs. For Hospitality industry, this method is easiest form of pricing. It can be classified as- cost plus pricing, contribution pricing, full cost pricing, marginal cost pricing. For apply this in Hilton, firstly it is important to calculate the production cost, after that set a price based on cost of production and products and services are ready to provide (King, 2017).
Market-oriented pricing- It also called as competitive strategy. This method is little complex than cost oriented pricing method. It is based on the competitive environment in market and current market conditions. Hospitality industry will analyse the prices of same services and products offered by the competitor in the market. After this it will analysed by the industry that the products having less or more features compare to its competition, accordingly the prices being set, it can be lower or higher than the price of competitor.
For example- if Hilton offering extra services which are not offering by other similar industries, they can put the price same for increasing value or slightly higher for the extra feature ) Law and et.al., 2018 (.
b.) In the context of Hilton Hotels & Resorts, the minimum charge pricing method does not fit and applicable, as the hotel is luxurious 5-star hotel. They have to maintain their standard in the market and for their targeted consumers. To maintain the luxurious hotel they have to charge according to the services they provide.
3.2 Factors affecting revenue generation and profitability in operations of Hilton Hotel
There are many factors which affect the revenue generation and profitability of the industry. Revenue generating factors include- ASP (average spending power), sales mix. And profitability factors are- labour intensity, elasticity of demand, portion control, self life, standardization.
Elasticity of demand- It is the relation between demand of the products and prices of demand, as change in demand of consumers will make change in prices of products and services. In the Hilton Hotel & Resort the elasticity of demand-price is inelastic. If the consumer's increase their demand for the services the prices of services will change in the industry.
Standardisation- Hilton Hotels & Resort is high in sanitary and have to maintain higher standard of services, as it is luxurious hotel. And mostly the consumers are royal, and high class business persons. Maintaining the standard will increase its profitability and help in generate revenues (King, 2017).
Shelf life- To sustain in the market it is important to developing new and good products and services. Also it depends on the brand value, the higher the value of brand is increasing the consumers and will increase shelf life of the industry. Satisfying customers with the services also decide the loyalty of consumer towards the industry. For fulfilment of all the factors, initiatives should taken by Hilton management.
Labour intensity- Cost of labour plays a major role in generating revenue and profit in Hilton Hotels & Resorts. It can depend on amount of labour and capital is utilise. In the hospitality businesses, use of labour is higher in compare to the use of capital (del Alonso-Almeida, Bagur-Femenías and Llach, 2015).
4.1 performance measure and appraisal techniques effect hospitality operation:
Quality management: Hilton companies all expected to through customer service so making effective quality management results in a group of staff's. Then works provides to retain and improve the quality base on services. A good practice in Hilton hotel is classified to contact with guests so they will contact with two departments. Like; front office departments and back office departments. The customers are performed the activities, so they have direct contact with front office department and perform other supporting tasks, so they have contact with back office departments.
Data analysis: Hilton hotel organization trends. In the hotel company, data analysis can be used in various ways in order to change hospitality operations, business strategies and market rates etc. Hilton company faces the similar challenge another company faces; proper data management. Hilton hotel need to be good data which means managing data so that is clear and update data (Styles, Schoenberger and Galvez-Martos, 2015).
Speed of delivery and customer service: customers are want to and use to receiving good quality, fast delivery and minimum price. Customers commits the best price, refundable amount and travel coupon, so if they have a better and good deal online with 24 hours. They want to good quality and super fast services.
Sales performance: Hilton company have set their goal and targets for the period time then provides to their sales team. Sales employees are usually moved to various types of employee and they should is on correct and brand facility from the internet and brochures down to email and welcome packs.
4.2 Usefulness and limitation of qualitative and quantitative techniques
Hilton hotel takes support of speed delivery qualitative technique, this aids the firm in measuring the delivery process of entity and analysing satisfaction level of consumers in enterprise. This is beneficial in order to identify errors an removing these errors by improving speed of delivery. But sometimes it is very difficult to measure the speed of delivery because when number of consumers are high then few people can get immediate services whereas other may get later services (del Alonso-Almeida, Bagur-Femenías and Llach, 2015).
Use of financial accounts is another great quantitative strategy in which enterprise can compare current and previous performance of business in financial term. Furthermore it can also compare performance of business with competitors. This is best way to manage its operations well and implementing new strategies for improving performance of entity. But changes in economic condition creates difficulty for organisation in order measure profitability by looking at financial records.
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4.3 Business analyses approaches
In order to analyses condition of company, Hilton hotel can take support of SWOT, PESTLE analyses techniques. These are helpful tools in order to determine internal and external situation of entity. By this way company can evaluate its existing performance against the required standard. SWOT analyses helps in determining strength and weakness of enterprise. Furthermore, through which Hilton hotel and find out actual existing performance. Whereas by conducting PESTLE analyses entity can find out issues in external market (Evans, 2015). This supports in analysing position in market and making changes in existing planning so that it can sustain in market for longer duration.
The report states that, the products and services being offered by the hotel industry are of which type and also, in respect of the customer satisfaction. The assignment further concludes in respect of the various key stages of a product and also in respect of the various key elements that affect the demand of consumer in different aspects. Further, the report lays emphasis on comparison of different customer profiles.