Operations management is the most important component of the hospitality sector. It can be considered as the pillars of the hotel industry (Mahadevan, 2015). In this regard, Hotel Hilton will be taken into consideration to understand the various aspects of operations like division of rooms, foods and beverages and many more. This assignment will describe about the nature with different factors affecting the services, comparing customers’ profiles and key stages in the product development. It will also include about the overall assessment of the hospitality environment of Hotel Hilton in context of targeting audience and achieving profits and revenues in effective manner.
Overview of Hotel Hilton: It is one of the finest groups of hotels and resorts that have been operating at global level since 1919. This was founded by Conrad Hilton and is operational at all the major locations of the world with more than five hundred properties and large workforce to maintain its stark reputation (Conroy and Yemen, 2018).
1.1 Nature of hospitality product and service areas
Foods and Beverages have been considered here as one of the vital operations of Hotel Hilton.
Perishable Element- It is definitely perishable and easily consumable. However, it is the attractive entity to target the desired set of people.
Tangible/Intangible Element- This comes under both tangible and intangible as well. Foods and beverages have a physical and concrete presence which can be touched, smell and feel in proper mode(Manhas and Tukamushaba, 2015). Along with this, it has intangible traits as sometimes the taste, look and overall presentation is indescribable and ethereal.
Inseparable Element- This put light on the quality assurance factor and involves empathetic emotion with reliable validation leading to generate profits for this hotel.
Service Areas- It consists of division of rooms for providing comfort and security to guests with variety of foods and beverages with provision of banqueting hall to organise functions, events and conference rooms to conduct formal meetings, seminars etc.
1.2 Different influences affecting patterns of demand within hospitality operations
Hotel business does get affected from many factors as the following. There are wide pools of influential components that accelerate the businesses at Hotel Hilton to flourish such as economic factor, season, festivals or vacation time, socio-cultural factors, ethnicity led elements,
Economic Factor helps the management of Hotel Hilton to plan any event or offers to attract the customers by creating demand for their services. Along with, there are four seasons such as summers, spring etc. that also has an impact on the demand of this hotel's services. Sometimes any vacation or festivals also affect the demand (Bowie and et.al., 2016). Nevertheless, some personal events like weddings, anniversaries, birthdays might also influence the demand patterns. The social factor includes human's working patterns at both professional and personal levels where people tend to go out and eat and during weekdays, until any occasion is there, they avoid any outings. Lastly, the cultural component is another element to attract customers as hotel's decor is important with food preferences on the basis of taste, flavors or regionalism to attract potential customers.
1.3 Compare customer profiles and their differing expectations and requirements
Hotel Hilton has wide exponential expectations from their customers’ outlook and provides many services.
Spending Power- It is one of the oldest names and has a huge spending power as its operations are expanded in more than 85 countries in almost all leading countries worldwide.
Type of Hospitality Business- It deals in mainly hotels and resorts with complete services. This in terms of accommodation, entertainment, organizing, restaurants and more on full time basis.
Menu/Accommodation Range- It has a wider reach that has impressed its clients, guests in profound fashion.
Pricing Considerations- This is for all types of customers like high end clients, travelers, families, conducting meetings, seminars for larger or small companies.
Expectations and Requirements- It’s a 99 years old group of hotels and resorts, clearly demonstrating the desired expectations from customers’ viewpoints and has been sustaining the competition so efficiently (Brown and Bessant, 2013).
Meal Experience- This hotel is known for its impeccable taste and variety of cuisines with the suitability of the geographical location it is operating.
1.4 Analyze factors affecting average spending power (ASP) in hospitality businesses
ASP refers to a joint decision that is made between equal partners of hotel or restaurant in pricing process.
Size of Income- This factor is directly proportional to the value of spending power of the customers.
Status- It depends on the situational status of an individual in the eyes of the society or community. This is mainly in context of the economic status and the ability to spend money to enjoy services provided by Hilton’s management.
Social/Cultural Influences- It is directly connected with the influential power of customers in their social circle which promotes celebration of any occasion/festival/event on large scale and making them use the hotel’s services.
Economic Situation- It depends on the earnings capability of guests and clients of Hotel Hilton (Gunasekaran and Ngai, 2012). Thus, they offer variable costing strategies to satisfy all their expectations with respect to costing of their services.
AC2.1 Stages in product and service development applied within hospitality operation
Product and service development is an on-going process which includes a detailed plan to identify, implement and analyze all the important stages required for the completion in appropriate manner.
Idea Generation: It is the foremost step that laid the foundation for any development procedure to meet expectations of Hilton’s investors, shareholders, customers and entire workforce.
Idea Screening: This leads to proper segregation of various components like deadlines, budgeting, people requirements, materials needed and whatsoever.
Concept Development and Testing: This is imperative to understand the implications attached with that specific product or service development. It involves the implementation part after testing it for couple of times to check its validation points and authentic results.
Business Analysis: This includes demand, pattern of customers’ needs and requirements, their perspective towards alternations, current trends of marketplaces.
Product Development: This is long process but once it is finished, it reaps benefits in the best possible manner including packaging, storage and reaching the shelves.
Test Marketing: This puts insights on the analysis and segmentation of product or service. It also involves the customers’ preferences, their shareholders targets and owns goals that is totally depended on profitability with enhanced productivity.
Commercialization and Launch: This is the last step yet not the confirmatory signal for the success of that service or product (Mok, Sparks and Kadampully, 2013). However, the launch must be done vigorously using marketing gimmicks and promotional tools to attract potential audience.
AC2.2 Features towards customers’ perception of products and services
Hotel Hilton has occupied a sparkling positing in the marketplaces due to the following features:
Brand Image- This can provide them a loyal customer base which will come again and revisit their services.
Nutrition and Dietary Requirement- It includes the variety of cuisines with many healthy and organic value with nutritive value that enhances Hilton’s slid image amongst its customers’.
Disabled Access- This has given extra wings to their expanding laurels list by giving special attention to the specially challenged people and making them feel comfortable at their hotel.
Availability of Resources- Hotel Hilton’s supplementary services are also well established, especially their small kits provided by the reception and making their customer to revisit.
Style of Service- This includes the etiquette and friendly behavior of Hilton’s staff which time and again push the forwarding button for customers to willingly access to their services (J. Harrington and C. Ottenbacher,2011).
Standardization and Space Utilization- This hotel is popular for its rich architecture and huge lobby areas, providing ample space in all types of services including TV, mini-fridge, AC and more.
AC2.3 Opportunities and constraints affecting product and service development
Product and service development is one of the integrated frameworks that put any hotel globally. This can be done by grabbing opportunities and eliminating the obstacles in a confined yet feasible manner. Additionally, Hotel Hilton has reputable name and thus do not need promotion when launching of product or service. Along with, it attracts investors easily thus leading to clutch the competitive advantages through its market positioning and by giving services of top notch. On the other hand, this hotel does face any challenges such as medium class families are still struggling to afford their services and they have limited options in choosing room divisions. Moreover, they need wide spaces and thus are mostly situated in the extreme points affecting the locals to visit and enjoy their services.
AC2.4 Different merchandising opportunities for hospitality products and services
Merchandising is defined as that activity which is needed for selling of goods and services to customers by employing the retailing methodologies. The retailing sector and hospitality industry goes hand in hand and has an influential impact on the customers’ mind. Hotel Hilton’s merchandising ranges from laundry like linens, bedding, robes etc. to its visual merchandising of hotel properties through information technological tools which has been accelerated due to an upsurge rise of internet. Moreover, this section deals with the consumers’ PPP (Purchasing Power Parity) as their expenditure habits would assist in selling of Hilton’s customized products and add value to their supplementary side businesses. Along with this, the concept behind merchandising in hotel sector has impacted the other establishments dealing ij the same sector like clothing, cosmetics and more. It has led to a spiraling effect and has resulted in low usage of their products while visiting this hotel (Kessman and McCauley, 2011). Additionally, it is one of the effective techniques used by the sales and marketing department of Hotel Hilton that has impacted its profits and sales volume in leaps and bounds.
AC3.1 Different methods of pricing
Hotel Hilton has been in this hospitality sector for more than nine decades now and with advent of open economy and globalization, it has expanded its operations in almost all major cities with proper arrangement of staff, personnel and employees to fulfill their loyal customers’ expectations in exponential growth. Along with this, they have always put exclusive concentration on their pricing strategies as it has led to gain a momentum over their competitors. They use the skimming tactic due to their seasonal demands and make them operate at prices more than the usual. It has direct effects on their profitability. Whereas during off seasons, they cut down their prices by applying various discounts, offers to accept the customers’ requests in smart and appropriate order. Nonetheless, this seasonal demand also affects their handling of operations and might result in lay-offs during low season and high hiring in times of any grand event or arrangement of any event (Sisson and Adams, 2013). Another reason is flexible approachability factor that determine the pricing strategies of this hotel’s administration. Their regular customers’ get special pricing while new ones also fetch discounted offers to lure them to come again and use their hotel’s services. Lastly, price discrimination is one of the latest fads that have provided the subsidized hotels to offer their services and products at reasonable costing to the locals when comparison has been done with the tourists in order to cover their proximity at regional level with extension of global image by maximizing their revenues.
Cost based pricing – In this, prices are set according to cost of product or service. In this some percentage of total cost of production is added to cost of product and then selling price is determined (Zhang and Weatherford, 2016).
Demand based pricing- In this, price of product is based according to its demand in the market.
Competition based pricing- In this, prices are set according to competitor’s price of a product.
AC3.2 Factors affecting revenue generation and profitability in hospitality operations
The following elements have impact on the operations of Hotel Hilton in both positive and negative aspects. The elasticity of demand plays important role in underplaying the patterns of using the services of any hotel. When demand is low then profits or revenues also get affected accordingly (The Influence of Customer Satisfaction towards Positive Word-of-Mouth in Hospitality Industry, 2016). Sales mix is another component that shed light on the brand image at the global status and number of customers with their satisfaction level. This helps in increasing the profits as well (Davis and et.al., 2018). Next is average spending power of customers on the basis of services provided to them. Here, Hotel Hilton has been known for its royal look and good maintenance of rooms division, conducting seminars, conferences etc, with special emphasis on the food department (Mahadevan, 2015). The focus on detailed analysis and planning of menu with international taste led to bring innovation in setting the standards among their competition and profit generation.
AC4.1 Performance measures and appraisal techniques of hospitality operations
Performance Appraisal is refereed as the methodology in which the identification and assessment of workforce of any organization occurs. It mainly deals with the performance management of employees’ and gives rewards to them on the basis of the complete evaluation of their skills, knowledge and etiquette in dealing with clients. Hotel Hilton does the same process by considering the following elements:
BARS- In this, a scale a used to measure performance of employees. It includes factors like employee behavior and their performance.
Management by objective – Here, performance is measured according to objectives that are been set by managers (Altin and et.al., 2018). In this, each employee are given different goals and objectives according to their skills and abilities.
360 degree feedback- Here, employee performance is measured by taking feedback from superiors, colleagues, customers, etc. for this usually questionnaire is designed.
AC4.2 Usefulness and limitations of various quantitative and qualitative appraisal techniques and their application
Usefulness: These techniques not only assist in motivating their employees to work better and lead to an amiable and positive work environment. Overall, the productivity at workplace in increased with a sense of responsibility and accomplishment to fulfill the objectives and goals of Hotel Hilton. Effective feedback and regular informal meetings or parties can give an opportunity to connect with each other that later impact the work ethics and team bonding. Nonetheless, employees’ behavior and treatment towards their colleagues and clients as well, managing their roles with deadlines etc can be considered while assessing the qualitative aspects. Along with this, such qualitative and quantitative techniques affect the entire progression in multiple effects with high profits and low conflicts and challenges at workplace.
Limitations: Hospitality sector, especially large hotels like Hilton has loopholes too. Their organizational structure is hierarchical which influence their upper management with great powers and thus it can lead to partial and biased recommendations and appraisal. This can hamper the entire workplace environment and has discouraging impact on employees’ working practices. In addition to this, when the customers’ take undue advantages of their privileges and harass or abuse the hotel’s staff then it also affect the records of that employees in mishandling or giving unclear instructions to such clients. Such situations can promote distrust and ambiguity in the minds of task force, resulting in lower levels of productivity and profitability.
AC4.3 Approaches to business analysis, evaluation and planning
Business analysis is defined as the practice of understanding the needs, specifications and requirements in order to recommend the business owners regarding the analytics and logistics for smooth running of operations at the organizational context.
Business evaluation is the procedure of set of rules and regulations that are used to measure the financial part of an organization. This is the estimated value that the market is ready to pay or get in return of proving service or selling of product.
Business planning is considered as the step by step guide for writing the documentation of a business and has components like goals, approach abilities, techniques and more in order to achieve the mission and goals of the organization.
With the context of Hotel Hilton, it can be clearly understandable that these three components have facilitated them in growing their businesses by expanding in many countries and keeping their core values and regional ethnicities intact by incorporating the strategic planning with adopted marketing procedures to optimize their resources allocation and enhanced productivity to gain profits and increased generation of revenues. Along with, they are trying to bring creativity in their food, room services and lodging facilities through usage of diagatl tools and use of internet for booking and promoting about their latest discounts and offers. Thus, it did assist and support invariably to positive direction.
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It has been summarized that Hotel Hilton has been in the global competitive market for the right reasons. It not only provided the best services but also assist their staff and employees with the best facilities that in return give the best to their clients and guest in effective and efficient order.