Hilton Worldwide, Home Country Headquarters & Company Psychology
Founder of Hilton Hotels, Conrad Hilton, bought his first hotel business in 1919. Because of his quick success, Conrad was always on the lookout for more hotels to purchase, as well as new and innovative additions to make to his businesses. These new additions would include being the first hotel to offer individual air-conditioning units in each room, as well as installing televisions for customer satisfaction, and included a phonebook and map next to each telephone for the female client traveling alone (Source
Hilton Hotel’s headquarters are currently located in McLean, Virginia (Source 2). Because traveling was already becoming so common in the US during the early 1920s, Conrad Hilton and his quickly growing corporation, continued to provide their clients with the utmost hospitality and service.
Not only does Hilton staff treat their customers their maximum attention and warmth, but their employees just as well. The Hilton family realizes that the key to a successful business, are happy employees. Because Hilton Hotels were founded in the US, the company continues to uphold its strong, corporate culture that reflects the All American lifestyle it wants its clients to have (Source 3). This influential lifestyle and hotel services are offered worldwide to the point where visitors know what to expect when staying at any Hilton location. Us Americans sometimes take hotel commodities and services for granted, and begin to set higher hotel standards. For instance, it is very uncommon for hotels in the US to not include a television in each unit. Hilton hotels go above and beyond and even offer a phone number to call incase you forgot any toiletry items. Those visiting from other nations might be inclined to try a different hotel commodity, and experience the All American Hilton name for themselves. The Hilton chain maintains a consistent vision and mission, everywhere while still remaining affordable.
Hilton Hotel does everything it can to comply with Corporate Social Responsibility. Meaning, the Hilton hotel chain tries to preserve cultural heritage, everywhere. Currently, the Hilton Company is donating a large
portion of their efforts to Shanghai to help conserve ancient architecture and communities. The Hilton Company pays close attention to the surroundings of each of their locations; so that they are ready to contribute to the community they are now a part of (Source 1). These kind acts work in favor of the Hilton name and its company image. Again, they continue to show communities they are there to offer hospitality and service whenever you need it most.
Finding Hilton’s mission statement was not a difficult task as it typically is for most corporations. In its separate tab read, “To be the preeminent global hospitality company – the first choice of guests, team members, and owners alike” (Source 3). As we previously mentioned, the Hilton Corporation pays close attention to its primary stakeholders. This includes all employees because without them, the Hilton would not be efficiently running as it is today. Currently, Hilton hotels are looking to expand globally to meet the wants and needs of their international-traveling clientele. In order for the possibility of expansion to work, more staff is required. Although employees are essential, the Hilton Corporation will not just hire anyone to join their Executive Team. There are now five Universities that offer Hilton Worldwide leadership and management classes for when you are ready to join the preeminent global hospitality company. The Hilton staff promotes within the company, this is why they offer such specific classes that are tailored to their organizational and management style (Source 5).
Currently, there are fourteen individuals who are listed on Hilton Hotel’s Executive Committee. These individuals are said to work closely together, despite geographical distances, to help maintain the company’s effectiveness and efficiency. As previously mentioned, Hilton’s employees are also a large portion of the company’s stakeholders. Without them working, there would be no functioning hotel business. For this reason, the corporation needs to hire regional presidents that overlook numbers, management, all while keeping in close contact with other regional presidents and CEO. In order for Hilton Hotels to continue running fluidly, employees need to be kept happy with the utmost management structure (Source 6).
Strategic Decisions & Global Objectives
Just two years ago Hilton Worldwide’s then President, Paul Brown, established some of the company’s key objectives during the PhoCusWright Conference in Hollywood, Florida. His focus was on customer service on the web, distribution, and revenue management. Brown’s statements glean some information on how the company strove for efficiency and flexibility, and how it planned to use it’s worldwide learning. In regards to customer service on the web, Brown underscored the importance of always providing the best customer service, while not “rewarding passive-aggressive behavior by offering more incentive for guests who complain publicly as opposed to privately. (Freed)” For distribution, Brown recognized the importance of learning about where clients were making the decision to book with Hilton. A system was developed by Brown to ensure efficiency in Hilton’s distribution channels. First, his objective was that direct channels offer the best rates, that way second or third parties would not take more profit than them, giving them the best profit margins. This objective was closely related to the second, which was to operate all of the hotels in the company’s portfolio as a unified whole, as opposed to competitors, which would only leave customers confused. Third, he wanted to take advantage of the channel’s economics by investing in a “brand-wide revenue management service (Freed).” This would create efficiency in the company, as specially trained managers would handle revenue and take the pressure off individual hoteliers. It would also ensure that revenue is handled uniformly throughout the company’s different locations. The fourth objective was to give third parties inventory “once the hotel has its own house in order.(Freed)” In other words, he wanted to ensure maximized efficiency in booking within, before allowing third parties to do it.
An interview with the current President and Chief Executive of Hilton Worldwide, Christopher Nassetta, reveals more up to date information on how the company strives to tackle the efficiency objective. Nassetta talks about his efforts to create a unified set of values, which he regards as “guardrails” by which the company can be guided (Bryant). Though seemingly elementary in terms of organizational management, this objective is key to
ensuring that the company’s employees all contribute to in a unified manner towards the rest of the company’s objectives. Three key objectives: efficiency, flexibility, and worldwide learning capabilities are all addressed by a focus on international growth. Thomas Kennedy, Hilton’s CTO, speaks about the company’s growth in an interview for Bloomberg.com in which he mentions that 80% of the growth in the company is outside the US market in places including China, India, and Europe. The interview also reveals that a staggering 230 new hotels are planned to open this year, over 30% more than last year’s 171(Hilton Experiencing ‘Explosive Growth,’ CFO Says) Expansion contributes to the company’s worldwide learning capability, as they have a record of being first-movers into new countries, which they use to their advantage as a means to create brand loyalty among international customers (Maxwell). National expansion provides Hilton with a first-mover edge as it acquires much needed information about the market and then uses it as an advantage over competitors. Another change Nassetta has established is the ability for all employees to “make decisions that meet guests’ needs” (Maxwell). This change serves as a vehicle towards meeting their flexibility objective. In enables the company to give the best service and receive the most direct feedback possible.
Hilton Worldwide has also been making giant steps towards efficiency under the direction of Christopher Corpuel, the organization’s brand services vice president and sustainability efforts overseer (Gunther). Back in 2009 the company established concrete goals to reduce its energy consumption by 20%, its CO2 emissions by 20%, its waste output by 20%, and its water consumption by 10%, all by the year 2014 (Nassetta). Since then, Corpuel has helped establish a proprietary digital platform that allows Hilton Worldwide to track the carbon footprint of specific actions (including electricity, water, waste, and CO2 emissions), as well as the collective carbon footprint of all the hotels in its portfolio. This new technology is called LightStay, and it became mandatory for all the hotels under Hilton Worldwide to implement the program by December 31, 2011. Additionally, there are managers in charge of collecting and sending data from every geography to the head office through LightStay (Mitra). What is most impressive about LightStay is that it was created in such a way that hotel owners and managers “can, in
effect, ‘friend’ others in the system and then measure their progress against their peers, as well as trade ideas (Gunther).” This enables maximum communication across hotels in all locations and in turn allows their leaders to share knowledge with each other in respect to the best efficiency and business practices.
One of LightStay’s features, the Meeting Calculator, enables hotel managers to share potential corporate customers’ carbon footprints with them and then plan to reduce them prior to events (Guevara). Hilton Worldwide also took another stride towards reaching its efficiency goals when it partnered with the nonprofit organization Good360 to help distribute donations from the hotels to over 22,000 nonprofit organizations (Ross). In partnering with Good360, Hilton Worldwide gained access to a major distribution channel, which gives it an incremental amount of flexibility in both business and its efficiency objectives. The Global Soap Project is another initiative by Hilton Worldwide. The nonprofit’s website explains: “Hilton Worldwide is providing channels for their more than 3,900 global properties to donate partially-used soap to vulnerable communities, while also investing $1.3 million over the next three years and providing their operational expertise and understanding of global supply chains to help expand the Global Soap Project’s processing and distribution capabilities” (Global Soap Project).
All of Corpuel and the company’s efforts to reach their efficiency objectives are undoubtedly being successful, as is evident by Hilton Worldwide’s available most recent sustainability results: “Since the introduction of LightStay, the company has reduced its: carbon output by 10.9 percent; waste output by 23.3 percent; energy use by 9.7 percent; and water use by 7.5 percent” (Hilton Worldwide Global Media Center). The results are astounding. After just three years, Hilton Worldwide has managed to reach half of its goal in reducing its carbon output, surpassed its goal to reduce its waste output, and is well on its way to reaching its other goals.
Hilton Worldwide’s strategies have changed from when Paul Brown was Hilton’s President, to now that Christopher Nassetta is in charge. The new strategies
proposed by Nassetta make sense, especially the efforts to create unity and within the company’s different sub-brands. Maintaining brand unity will create efficiency within the company as its sub-brands will not cannibalize each other, and it will also give Hilton flexibility to cater to its different customer bases domestically and abroad. Rapid international expansion is also contributing and will continue to contribute to the company’s success as it grants Hilton first-mover advantages and better learning capabilities. Additionally, Christopher Corpuel’s LightStay platform has allowed Hilton Worldwide to maximize its learning capabilities and flexibility while simultaneously reducing its costs and increasing its efficiency. Strategies for Global Expansion
Hilton Worldwide has become the fastest growing major hotel company, increasing its portfolio by 29 percent since June 2007 and exceeding its competitors in total rate of room growth. Also since 2007, Hilton Worldwide has also added more than 950 hotels to its total global footprint and created a pipeline of over 860 hotels. In 2011 alone, Hilton Worldwide opened a total of 170 hotels and increased supply share in each of its global regions. In the United States, Hilton Worldwide has over 10 percent of the room supply market share, which is the largest in the country, as well as over 18 percent of the active industry room pipeline in the planning to construction phases.
Hilton Worldwide’s rooms under construction in rising markets have grown from 6 percent in June 2007 to 66 percent. Hilton Worldwide, Egypt’s largest hospitality provider, signed a deal with the Egyptian Touristic Resorts to open two new properties in Cairo and Alexandria. The agreement will expand Hilton’s portfolio across Egypt to 20 properties. The 390-room Hilton Giza Pyramids, which will include a large health club with a spa and an outdoor swimming pool, is due to open in 2016. It will be Hilton’s sixth property in Cairo and is aimed at business and leisure travelers. The 195-room Hilton Alexandria King’s Ranch Resort will open in late 2013 and will house an indoor and outdoor pool. Aiming these new hotels at a specific market will help them stand out amongst other hotels.
Hilton Worldwide has numerous advantages over their competitors across the globe. The Hilton Worldwide Performance Advantage is a system of innovative solutions and advanced technologies that work together in order to drive increased business and keep costs down, without compromising the quality of the hotels. Together, these services provide access to the latest tools, technologies, forward-thinking strategies, and influential people in the industry to create an unchallenged competitive advantage. The Hilton Performance Advantage Services includes Hilton HHonors, Hilton Worldwide Sales, Information Technology, Global Online Services, Hilton Reservations and Customer Care, Revenue Management Consolidated Center, and Hilton Supply Management. The Hilton Performance Advantage combines the power of scale, access, reputation, and innovation. Their system provides powerful resources across of their portfolio of brands, delivering leading edge solutions to consistently drive profits and efficiencies. This system creates a higher share of wallet, guest loyalty, and leading innovation making it easier for on-site personnel to focus on providing a superior guest experience.
Hilton Worldwide launched a global corporate responsibility platform, Travel with Purpose. The platform has four areas of focus, which are creating opportunities, celebrating culture, living sustainably, and strengthening communities. These areas of focus allow Hilton Worldwide to support local initiatives and join the local communities in the new market. On Hilton Worldwide’s website they state that the mission of their “strategic giving is to harness our passion and expertise to address the social, economic, and sustainability issues that impact our business and are important to the communities where we live and work.” The Travel with Purpose platform also allowed for Hilton Worldwide to announce partnerships with The Global Soap Project, Good360 and Sundance Institute. These partnerships allow the company to engage in activities that help give back and build onto communities.
By continuing to open new hotels, engage in a global corporate responsibility platform, and build partnerships with other companies, Hilton Worldwide is not only successfully expanding globally, but also rising above their competitors. Developing a Transnational Organization
In a competitive environment, economy globalization has become a very large and necessary requirement for transnational organizations in order to remain successful. The hotel industry is one such competitive environment, and expansion of hotel operations has become an increasingly significant development strategy for big hotel corporations. Hilton is one of these big hotel corporations. Hilton Hotel has created, “a series of market development strategies including entering new market segments and spreading into new geographical areas (…) to capture the potential market and take the leading role in the market competition.” (Yin-Chang) One such technique that Hilton has used to spread to new geographical areas is to set their goals to sub-Sahara Africa. According to Jean-Paul Herzog, president of Middle East and Africa for Hilton Hotels Corporation, Hilton has set a lofty goal to set up at least one hotel for every capital in Africa. In Africa there are 53 countries, meaning 53 capitals. (Peinaar)
Another expansion route that Hilton is tackling is Saudi Arabia. As of April 2012, Hilton had announced they were planning to open nearly 7,000 hotel rooms in Saudi Arabia, 14 hotels, within the next two years. If this goal is obtained, it would make Hilton being the fastest-growing hotel company in the country. Rudi Jagersbacher, the president of Hilton Worldwide, talks about why Saudi is so important to their expansion stating that , “One of our responsibilities is also to make sure that we develop in areas that can also potentially have outbound business.” (Hilton)
One of Hilton’s major challenges is to, “recruit technically competent and culturally sensitive managers for managing the operations of overseas properties.” Hilton is facing these challenges by recruiting a majority of their future employees from within the country. Jagersbacher declared that Hilton has, “lined up agreements with hotel schools in Saudi Arabia. We have recruited specific people just to deal with this in these particular markets.” (Hilton)
Hilton’s concept, “global hand, local touch” will be a strength in their global expansion. In order to develop a strong organizational structure, Hilton makes it a priority to hire local managers and employees to run their foreign subsidiaries. It is important to develop, train and understand demands of the locals. This will be an invaluable asset for long-term growth in their expansion. The future of Hilton lies in a strong structure that relates to their employees and the local market. Hilton’s recognizable name will provide people with an excellent experience they can rely on regardless of the location. Each individual location will focus on the three characteristics of a transnational organization.
The multidimensional perspective will provide insight into how decisions made in a transnational organization. A transnational company, like Hilton, evaluates the opportunities in a global market and seeks to provide satisfaction to each independent subsidiary. For this strategy to be successful in a transnational company, Hilton allows their decisions to vary based on the environment and underlying circumstances of that specific location. They do not have a set standard that applies to every single subsidiary without negotiation, nor do they allow decisions to affect the entire organization. Decisions are specialized through each individual operation. By allowing the organization to operate as separate units, Hilton can react, establish and make effective changes to only those who need it. A transnational company is stronger in their operations through this type of management. Integrated Processes in a transnational organization give them the ability to separate assets and resources throughout the company. This allows for increased freedom and independence. Hilton can manage their subsidiaries differently based on their location and offerings. All of these characteristics are strengths Hilton will have against their competitors. Their diversification of products gives them an advantage over the competition. Games, entertainment and hotels are just a preview of their offerings. When one part of their business is lucrative they have the ability to spread their profits around. This gives them the upper hand in expansion. While it may not guarantee security, it definitely provides stability for long-term growth. This transnational organization can withstand economic downturn. Since they have locations all over the world they are not as easily affected when one country has tough economic times. Strengths like this balance out their losses. During tough times they can spread out their gains and losses throughout the entire parent company. With smaller companies a tough economic time can leave them in an unpredictable situation. Hilton is a strong transnational competitor due to these strengths. Hilton provides exceptional service for their customers around the world. However their weaknesses also need to be evaluated in order to maintain further success in the market. The constant evaluation of operations, demands and feedback from employees and customers, at each subsidiary, will be crucial in the growth of Hilton as a transnational organization.
Culture, demographics, values and overall needs of satisfaction will be important for their continued presence throughout the world. The challenge Hilton faces is delivering a satisfying experience for both domestic and international customers. They need to consider their market and react to feedback from their local managers/ employees. This is still an opportunity for Hilton. There have been unsatisfied customers who see inconsistent decisions being made. Lack of improvement based on feedback, will decrease further growth. Decreased innovation will result in decreased business. The evaluation of their product offerings can have both a positive and negative impact on the business. Distribution of hotel revenues can be an asset or a liability. There have been situations in the past where the revenue mix brought a decline in profits. When a 85%+ of the company’s revenue is tied up in gaming, and economic recession happens, there will be a domino affect into all areas of the organization. Hilton as a corporation will suffer the loss in all areas of the business. It is important to focus on the worldwide presence and not putting all of their ‘eggs into one basket’ parse. When the UK had tough economic times, Hilton accounted for 87%+ of the business in that region. This has a large impact on the geographic region, but also the total revenue of the company. Upon entrance into international markets this transnational organization needs to do the proper research to accommodate the local market. While the economies are improving and travel is increasing, consumers are looking to hospitality industries to make memories through an exceptional experience. Hilton needs to improve their point of difference in the industry. With competition on the rise, Hilton has to provide a unique, memorable experience that their consumer will remember. In a transnational organization like this one, each subsidiary will need to
specialize their offerings by speaking directly to that consumer.
Hilton will continue to be a strong transnational company as they focus on the importance of partnership with their national subsidiaries. Their strengths and weaknesses will be under constant evaluation. As they continue to increase their knowledge, capability and over all worldwide presence, the company will keep a strong hold on their global competitive advantage. Hilton is a long- term brand name that encompasses a variety of products. Through product differentiation, market presence and their “global hand local touch” strategy, Hilton’s organizational structure will reflect a market as diverse as the world we live in.
Hilton Hotels is planning a huge expansion into Africa and the Sub-Saharan Region over the next several years. Hilton Worldwide VP Development of Southern Europe & Africa, Deepak Seth, told Tourism Update Online in Cape Town in 2010 that Hilton was going to build at least five new hotels in South Africa. Prior to 2010, Hilton did not have a good strategy for expansion into the African continent, according to Seth. However, Hilton has redesigned its strategy, which takes into account the recessions and soaring prices in developing nations. Comparing this to Africa, Africa continues to show positive growth in their economy, which is projected to increase over the next several years. According to Seth, “Africa is the world’s last untapped market for hotel expansion.” “The African travel, tourism and gaming industries represent an emerging market of 31m travelers with more than US$12.4bn in revenues. The WTTO ranks Africa as one of the fastest growing destinations for international tourism.” This provides the perfect expansionary market for the Hilton Hotel conglomerate.
In a 2011 summary report from Hilton, they planned to increase their African presence by 80% over the next three to four year period. Additionally, at the three existing Hilton hotels in South Africa, they launched a major environmental initiative that was expected to decrease energy costs by 80%, thus providing additional revenue for Hilton from expansion into these areas. Also in this report, Hilton planned to triple their footprint in the Asian area as well as signed agreement to bring Doubletree Hotels to
Indonesia and Japan.
Hilton continues to recognize, explore and move forward with economic opportunities in Nigeria and South Africa. In September 2013, in Zimbabwe, Hilton has partnered with a young entrepreneurial firm. Hilton and local Zimbabwe developing firm Stream Walk Arcade, have entered into an agreement to build a US$145 million Hilton Hotel and office complex in Harare. “Hilton is still a star American brand. There is no bigger name than Hilton in America, and they are saying this? That’s really profound,” said Mr. Reynolds. South Africa is very excited about Hilton’s decision to expand into their area. Minister Walter Mzembi chipped in, saying: “Hilton Worldwide is an international brand and by coming to this country, the hotel giant is endorsing Brand Zimbabwe and we are really excited about this project. Hilton saw this as a great business opportunity and moved forward to begin the constructions.
Additionally in South Africa, Hilton has partnered with one of South Africa’s leading resorts, Pezula Resort Hotel & Spa, which is set to join the luxury portfolio of Conrad Hotels & Resorts – part of the Hilton Worldwide brand. Global head of luxury and lifestyle brands for Hilton Worldwide, John Vanderslice stated that: “By combining Conrad’s signature style and service standards with such a superior resort property and location, we will create an exceptional and memorable guest experience. “For 25 years, Conrad has epitomized the definition of smart luxury, and our arrival in South Africa represents a key milestone in the brand’s ongoing global expansion,” Vanderslice said. The Doubletree division of Hilton hotels is looking toward rapid global expansion over the next several years. The hotel chain announced that through Q4 2012, it had added 49 hotels to its portfolio in one year, and that it expects to meet or exceed that pace in 2013 with both new-build and conversion hotels in the development pipeline. With an eye towards the future, Global Chief John Greenleaf said he anticipates achieving the following global growth goals in 2013:
• Expand the brand’s presence in secondary and tertiary markets within the United States;
• Double Canadian supply with three hotels opening, including the brand’s first hotel in downtown Toronto;
• Enter at least two additional countries in Europe, with two hotels each in Ireland and Poland;
• Grow the UK collection to 25 hotels with key openings in London and Edinburgh;
• Continue growth in Asia Pacific:
• Launch of the brand in Indonesia;
• Double supply in India in terms of hotels (from three to six);
• Nearly double the brand’s portfolio size in the Middle East and Africa region with launches in South Africa (Cape Town) and Seychelles, plus the addition of a third hotel in Tanzania (Stone Town, Zanzibar).
Transnational Innovation Models
An organization’s value chain correlates to the company’s ethical and moral standards. Most transnational organizations follow some form of a value chain; one that best suits the product and/or service the company delivers (Global Value Chains). The Hilton chain makes it very clear and apparent what those principles are. Searching for the company’s value chain was much easier than anticipated. All Hilton hotel chains encompass the highest level of hospitality, integrity, leadership, teamwork, ownership, and the sense of company discipline and urgency to any issue (Hilton Worldwide).
Hilton’s hotel services deliver the highest quality of hospitality and guest experiences. The Hilton name aims to keep their clientele pleased during their stay at the hotel chain, so that visitors continue to book their reservations at Hilton hotels, despite what region they stop at. The Hilton brand understands that dining and drinks play a large role in travel plans. For this reason, Hilton hotels offer a wide variety of healthy meal options at the convenience of being delivered directly to the guest’s hotel room. If guests choose to dine out, there are on-site restaurants at each hotel as well. One of Hilton hotel’s largest priorities is doing the right thing at the right time. This avoids any agency problems that could potentially occur. Agency problems are when authoritative figures take action without consulting stakeholders. During any decision-making process, Managers are given the opportunity to discuss and consult any conflict with corporate figures before taking action. The Hilton organization strives to lead the hotel industry as well as all communities The Hilton name decides to enter (Hilton Worldwide). For example; when Hilton hotels opened its first location in Mexico (2009), Corporate Management noticed the amount of poverty and child orphan rate. The Hilton chain quickly became affiliated with a non-profit organization called SOS Children’s Village. The founder of the Hilton name, Conrad Hilton, was such a large advocate in social and humanitarian affairs that the organization believed it would be appropriate to provide as much aid and assistance in helping build SOS villages for orphan children.
Even today, the Conrad N. Hilton Humanitarian Prize is given out annually to organizations that greatly help and influence the expansion of SOS villages (SOS Children’s Villages). As we previously mentioned; the secret to keeping an effective and efficient hotel service, is keeping employees and stakeholders happy. This is when teamwork comes into play, all Hilton hotel employees feel as though each of their jobs has incentive and without them, a big portion of the Hilton hotel experience is gone. During any decision making process, authoritative figures such as managers, regional managers and corporate managers take ownership in any conclusion they choose. The Hilton organization is the owner of all its actions and decisions it makes. And lastly, the Hilton promises to tend to any conflict or issue with a sense of urgency and discipline. Meaning, Hilton’s clientele are the hotel’s first and most important priority. It is Hilton’s obligation to meet the wants and needs of its visitors (Hilton Worldwide).
According to our text, locally leveraged innovation is innovation that
“relies on subsidiary-based knowledge development. Responding to perceived local opportunities, subsidiaries use their own resources and capabilities to create innovative responses that are implemented in the local market” (Bartlett 409). With this being said, the Hilton hotel chain has made quite a few local innovations with its locations featured in Host countries. For example, Hilton Worldwide provides a team of Hilton members who are referred to as “Senior Leadership,” these members make certain that all Hilton employees are heard, seen, valued, and respected. These Senior Leadership members work toward conserving diversity and cultures all across the globe. Hilton’s attempt to preserve cultures relies on training, celebratory traditions and customs that are typically seen in the host country (Hilton Worldwide). Based on what regional country the Hilton hotel is located, that specific hotel was built and designed to cohesively fit its region. The Hilton organization uses local food vendors and other resources to minimize costs including transportation (Hilton Worldwide).
Globally linked innovation “allows the company to take market intelligence developed in one part of the organization, perhaps link it to specialized expertise located in a second entity and scarce resource in the third, and then eventually diffuse the new product or proposal worldwide” (Bartlett 410). This is what is typically seen in Hilton’s hotel corporate offices. In order for all Hilton hotel locations to have the same set of standards and management styles, the company must constantly be communicating with regional managers and exchange data and information through modern and innovative information systems (Lodrige-Kover).
As previously mentioned, The Hilton Corporation depends strongly on its foreign subsidiaries to conduct business overseas. Meaning, local management plays a large role in the decision-making process and overall management of that Hilton hotel’s specific location. With over 40 languages being spoken throughout Hilton’s team of over 300,000 members, it is essential to maintain a unified hotel staff that is led by empowered local managers. With the assistance of Hilton’s Senior Leadership program, these local managers can be seen, heard, valued and respected for their efforts and contributions (Lodrige-Kover).
Not only does the Senior Leadership team help in preserving cultures all around the world; but because Hilton hotel’s local managers work closely with corporate’s Senior Leadership team, local managers can be easily reached to have their all of their ideas and concerns brought to attention. This works as a catalyst for corporate to take action in areas where they are needed most (Hilton Worldwide).
Once local managers have communicated their list of priorities to Hilton’s corporate office and Senior Leadership group, subsidiary functions come into play. Actions that will help implement the change and/or alteration that are being made to the hotel chain. Once local managers are given the “okay,” they can then instruct their staff to complete tasks and goals to have this objective met (Lodrige-Kover).
Hilton Worldwide has been operating a five-year plan of global expansion for many years and the company should continue to manage its business this way. Hilton Worldwide is the fastest growing major hotel company; they’ve expanded the portfolio by 29 percent since 2007. Hilton Worldwide has four key strategic priorities, which are aligning our culture and organization, maximizing performance across the enterprise, strengthening and expanding their brands and commercial services platform, and expanding their global footprint. Hilton Worldwide is divided into 4 regions with goals for each region. Each five years, there is a plan not only to open new hotels in countries they’re already in, but also to plan to open hotels in new countries based upon travel trends, population booms, and economic news. The company bases their global expansion especially on what is bet for their multi-brand portfolio. This plan for global expansion continues to work for Hilton Worldwide and is something they need to continue.
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Hilton Hotel’s Value Chain (Hilton Worldwide)