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Welcome To The Family: Analysis of The Hilton Brisbane: Strategic Management CORE11-130 Semester 091
Welcome To The Family: Analysis of The Hilton Brisbane: Strategic Management CORE11-130 Semester 091
Welcome To The Family: Analysis of The Hilton Brisbane: Strategic Management CORE11-130 Semester 091
CORE11-130
Semester 091
Names: xxxxxxxxxxxxxxx
Tutor: xxxxxxxx
Tutorial: Wed 2-4pm
Word count: 3630
Turnitin Receipt No:
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Executive Summary:
The Hilton Brisbane, established as a franchise of the Hilton Hotel Group in
1986, is one of Brisbane’s premier luxury hotels, catering primarily to the needs of
corporate customers (Professional Travel Guide, 2009). Being part of the Hilton Hotel
make its customers feel as a member of the Hilton family. Furthermore, to maintain
& the famous Hilton brand image, the Brisbane franchise has undertaken regular
upgrades.
However, the Hilton Brisbane’s resources and attention have been focused
This has been one of the predominant issues preventing the Hilton Brisbane from
capturing a greater market share. This, compounded with human resource concerns
over high staff turnover and quality of customer service, as well as insufficient
domestic marketing and advertising, has alienated loyal and potential customers.
Because of the severe impact of these factors on the Hilton’s operations, this report
promotions.
and continual training for employees and revising staff incentive programs.
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3. Increasing consumer awareness and widening the customer base via new
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Table of Contents
Executive Summary:..............................................................................................2
1.0 Issue...........................................................................................................4
2.0 Target Market.............................................................................................4
3.0 Macro-environment....................................................................................6
3.1 Societal Values & Lifestyle................................................................................6
3.2 Government Legislation & Regulation..............................................................6
3.3 Population Demographics.................................................................................7
3.4 Economic Environment.....................................................................................7
3.5 Technology........................................................................................................7
4.0 Driving forces and Porter’s Five Forces........................................................8
4.1 Key Success Factors...........................................................................................8
4.2 Driving Forces....................................................................................................8
4.3 Porter’s 5 Forces...............................................................................................9
5.0 Analysis of Competitors............................................................................10
6.0 SWOT........................................................................................................11
6.1 Strengths:........................................................................................................11
6.2 Weaknesses:....................................................................................................12
6.3 Opportunities:.................................................................................................12
6.4 Threats:...........................................................................................................13
7.0 Strategic Human Resource Management..................................................13
8.0 Implementation........................................................................................14
8.1 Narrow focused target market:......................................................................14
8.2 Human Resource Management:.....................................................................15
8.3 Marketing & Advertising:................................................................................16
9.0 Appendix:.................................................................................................17
9.1 Appendix 1......................................................................................................17
9.2 Appendix 2:.....................................................................................................18
9.3 Appendix 3:.....................................................................................................19
9.4 Appendix 4:.....................................................................................................19
9.5 Appendix 5:.....................................................................................................20
10.0 Reference List...........................................................................................21
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1.0 Issue
This report focuses on the Hilton Brisbane, a franchise of the successful
Hilton Hotel Group. Despite its heritage and 23 years of experience in the Brisbane
area, it is evident that the Hilton Brisbane still has many inadequacies, which have
limited their ability to increase their market share (Professional Travel Guide, 2009).
Identified within this report are three major issues that have affected the Hilton
Brisbane: a narrowly focused target market, which excludes a major segment of the
Australian tourism industry; a lack of local & regional promotion of the hotel, which
limits the customer base; and finally difficulties in the human resource segment,
suffering under high staff turnover and a lack of service quality. Throughout the
report these issues will be analysed and expanded upon and strategic solutions will
upper scale market (Von Bodman, Carlos, Poprawski, Saab, & Wu, 2003). Being part
of this Hilton Corporation brand, the franchise Hilton Brisbane receives customers
from all areas of upper scale tourism. However, it has begun to direct its focus
the $12 billion tourism industry (see Appendix 1) (Datamonitor, 2008 c).Being a high
profit margin niche market, this market has specifically been targeted through
several refurbishments. Both the multi-million dollar renovation in 2004 & 2009
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were aimed at improving business facilities and accommodation to meet the high
2004)
important especially when targeting the business travel sector with its special needs.
accommodation and fine food are expected. However, in addition to these demands
businesses also require high-tech meeting facilities and the newest technology,
engagement to meet the high demands of its clientele and facilitate their business
HHonours (Von Bodman, Carlos, Poprawski, Saab, Wu, & Harrison, 2003), it is
expected that this area of tourism will be declining within the next year, as 2009 is
(International Monetary Fund, 2009). With this expected decrease of global market
activity, there will be less money for expensive travel, ultimately making business
the need to increase advertising in areas such as business & in-flight magazines and
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has been found to have the greater impact on the purchase habits of business
3.0 Macro-environment
luxury, business markets and the Brisbane franchise is not exclusive to this. On a
global scale, the Hilton Hotels aim to set the standard within the hotel industry for
The general lifestyle values of the Australian market include high value for
leisure, relaxation time and work-life balance as well as luxury items and social
status. Australians also have a tendency to be more family oriented rather than work
business. A country analysis report by Datamonitor observed that Australia has one
of the most open economies among members of the OECD and was rated first in
terms of the lowest overall level of regulation (Datamonitor 2008 a). It was found
that Australia also follows market friendly policies and has a very liberal legal regime
(Datamonitor, 2008 a). These factors encourage international chains such as Hilton
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Government legislation and regulations on an international level are more
difficult to characterise due to their extreme variations and for the purposes of this
characteristic of Australia are the ageing population, reduced labour force, stricter
Over the next 40 years, the government predicts that the number of people
over the age of 65 will double to almost 25% of the overall Australian population
(Datamonitor, 2008 a). This means that more people are of retirement age and could
increase the market for luxury retirement-age travellers for Hilton. Because of this
shift, the labour force will also reduce significantly over the next few decades. Other
policies, reducing the number of immigrants living and working in Australia and a
The global marketplace has taken a major setback in the last couple of years
due to the global financial crisis and subsequent recession. Australia has been no
exception to this economic downturn, but despite this, the hotel and tourism
industry in Australia continues to grow and overall the tourism industry contributes
around $78.7 billion to the Australian economy (Datamonitor, 2008 a). Other trends
that are apparent are the strong mining and infrastructure industries, rising inflation
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3.5 Technology
requirement for the luxury hotel sector. If hotels such as the Hilton Brisbane do not
continually stay at the forefront of the industry with technology, they risk losing
successes are based. It is not enough to be at the right place at the right time,
successful hotels are also expected to provide high quality service at competitive
prices, which are factors that the Hilton takes into account.
exceptional employees are required to sustain the operational side of the company.
The Hilton Brisbane addresses this through continual training of its service providers.
In addition, the use of technology and software’s for e.g. streamline hiring &
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4.2 Driving Forces
issues that Hilton Brisbane face. To counteract these problems, Hilton Brisbane
utilizes strategies such as the use of economies of scale and outsourcing with regards
to services and amenities, to minimise costs and keep standards consistent (Von
Bodman, Carlos, Poprawski, Saab, Wu, & Harrison, 2003). Furthermore, the Hilton
Group ensures its future by diversifying their portfolio and focusing on several target
the industry to attract consumers. All these strategies create a security blanket to
protect the Hilton in times of economic difficulties, which can threaten the hotel
industry.
entrants, threat of substitutes and the bargaining power of customers are of average
secondary suppliers, which serve the operational needs of the company. Due to this
position (Datamonitor, 2008 c). However, despite this reliance the bargaining power
of suppliers remains at best moderate, due to the superior market power of large
With regards to new entrants, it is quite difficult for a new competitor in the
hotel business to enter the market, due to legal complexities in purchasing, leasing,
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(Datamonitor, 2008 c). However, the likelihood of new entrants is still moderate, as
2008 c).
force is also moderate, but alternatives are continually increasing. However, most
purpose for choosing luxury hotels is either business or luxury travel (Datamonitor,
2008 c).
Finally, the buyer’s power is high. Although they are price sensitive, a strong
brand image could persuade them to patronize the Hilton brand. This is the area the
Hilton Hotels should emphasize more, as a positive and predominant brand image
Overall, the use of Porters five forces tells us that the hospitality market is
The Hilton, Marriott, and Sofitel are reknown hotel brands competing
groups can be found within a mile radius of each other, giving consumers a greater
variety to choose from and increasing competition (see Appendix 2). All of these
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hotel groups were listed internationally under the NYSE, until the recent privatization
their financial standing through their total international revenue and compare their
differentiating factors and target markets within Australia. Internationally, by the end
of the financial year of 2007, Marriott Inc. lead in total revenue, followed by the
Hilton Hotels and finally Starwood Hotels (see Appendix 3 & 4) (Datamonitor, 2008 b,
e & f). However, with regards to operational profits for 2007, Hilton Hotels suffered a
steep decrease from year 2006, whilst Starwood Hotels and Marriott Inc.
Nationally, the three competing hoteliers share the same target market,
focusing on luxury and upscale business travelers. While the Marriott defines its
relaxation of their business travelers and the Hilton specializes on business launches
& conference, they essentially target similar consumer needs (Datamonitor, 2008 b,
e & f). However, while sharing the business travel market, these three hotels employ
noticeably distinct strategies. The CEO of the Sofitel unveiled its “Pillars of Strategy”
(Datamonitor, 2008 f). Marriott’s central focus is on their “Spirit to Serve®” program,
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Based on the competitive analysis it can be deduced, that the competition
of the Hilton Brisbane is only moderate, due to the fact that all competitors have
promotions are still necessary for the Hilton Brisbane to maintain and increase their
market share.
6.0 SWOT
6.1 Strengths:
-location: Situated in Brisbane’s CBD, the Hilton enjoys a prime location, which
places it within easy walking distance to the train station, main shopping area,
-large customer base: Due to its establishment in 1986 (Professional Travel Guide,
2009), the Hilton has a large customer base, which does not only include prior
visitors of the Hilton Brisbane, but also those who choose to use the Hilton chain
globally
-business facilities: Resulting from continual renovations, the Hilton has state-of-the-
art business facilities, which include modern executive suites as well as the 24-hour
6.2 Weaknesses:
in the last 5 years, these renovations only extended to business facilities, resulting in
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-high staff turnover and low quality customer service: Due to fluctuating occupancy
between seasons, the Hilton Brisbane experiences high staff turnover, which affects
its training cost as well as service quality (Chapman & Lovell, 2006).
does not have its own website. This lack may limit the Hilton’s ability for market
growth as previously mentioned studies have shown that the internet greatly affects
buying habits.
6.3 Opportunities:
-domestic tourism: As the Hilton Brisbane is not targeting the domestic market yet,
there is an opportunity for expansion into this market segment. Such an incentive
would help increase their market presence, as domestic tourism contributes to 65%
of Australian tourism and has grown by 7% between 2006 & 2007 (Australian
Government, 2008).
6.4 Threats:
-competition: The Hilton Brisbane faces a vide variety of competitors ranging from
established competitors, such as the Sofitel and the Marriot, as well as new
-economic crisis: The current economic crisis has the potential to further deter
international and domestic travelers from coming to Brisbane and staying at luxury
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7.0 Strategic Human Resource Management
The Hilton Brisbane has been faced with several issues in the last couple of
years with regards to Human Resources. While Hilton has managed to recruit
sufficient staff to meet their demands, they’ve suffered under high staff turnover
(Chapman & Lovell, 2006). This high turnover is the result of great fluctuations in
seasonal occupancy and lack of retention strategies. During the peak season, Hilton
increases its hiring to meet the demands, however come off season, they find it
customers have mentioned that the service, particularly front desk service, was less
than acceptable given the Hilton’s reputation (Trip Advisor, 2009). This can be
attributed to the high staff turnover, as most Hilton Brisbane staff do not have the
8.0 Implementation
During the investigation of the Hilton Brisbane, three main issues were
identified – a too narrowly focused target market, human resources and marketing.
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In order to improve these areas and provide greater value to the customer, it is
focus has been on corporate customers, while neglecting the more profitable market
tourism industry in Australia, the Hilton should also target this market segment to
strengthen its market position (Datamonitor, 2008 c). It is recommended that the
Generally the Hilton Brisbane has all the necessary resources to implement
Hilton Hotel Group, the Hilton Brisbane would also have access to many companies,
who have contributed to the refurbishment of other Hilton Hotels through provision
Hilton Brisbane will better uphold an image of quality and excellence to ensure
customer satisfaction.
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8.2 Human Resource Management:
In addition, the Hilton Brisbane is faced with the problem of high staff
turnover and customer complaints regarding the poor quality of service. To once
again uphold the Hilton’s reputation for quality and excellence, to attract new
customer while retaining the old customer base and ensure high customer value, it is
essential for the Hilton Brisbane to address these two issues. These HR problems
training for employees, specific employee incentives, both monetary and non-
monetary, and by following the global trend of outsourcing for services such as
cleaning. Furthermore, the use hospitality and tourism student interns during the
main season and encouraging their return through incentives such as future job
prospects would also aid the retention rate as well as the quality of service, while
Once again the resources required for these recommendations are available
to the Hilton Brisbane through the Hilton Hotel Group. Internationally the Hilton
Group has implemented a variety of courses for employee training from SkillSoft as
Suite to streamline hiring processes (CBS Interactive, 2009). If the Hilton Brisbane
were to implement such programs available through the Hilton Group and also take
address their weakness of human resource management, while making the Hilton
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8.3 Marketing & Advertising:
Besides the two previous problems, the Hilton Brisbane has currently also
been neglecting its local advertising and marketing campaigns. This is an issue, as
about 75% of Australian tourism is domestic and without the right advertisement &
marketing the Hilton won’t be able to reach its full potential with regards to
occupancy and its market position (Datamonitor, 2008 c). Therefore, the
implementation of new advertisement and marketing for both business & leisure
television and radio to the internet and the creation of an individual website to
ensure maximum exposure. Furthermore, the Hilton should also initiate a marketing
campaign targeting domestic leisure travelers with special offers and mini-breaks.
firms and web designers to ensure high quality and efficient advertising. However, at
the same time the Hilton Brisbane does have the opportunity to utilize some of the
“Travel should take you places” campaign (Hospitality Net, 2006). By implementing
this strategy the Hilton would be able to address its weakness in advertisement,
while ensuring competitiveness with Hotels such as the Mariott or the Sofitel.
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9.0 Appendix:
9.1 Appendix 1
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9.2 Appendix 2:
Marriott
Sofitel
Hilton
Brisbane
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9.3 Appendix 3:
9.4 Appendix 4:
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9.5 Appendix 5:
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10.0 Reference List:
ASIATravelTips.com. (2004, July 21). Hilton Brisbane receives $10m facelift. Retrieved
February 15, 2009, from ASIATravelTips.com:
http://www.asiatraveltips.com/travelnews04/217-Brisbane.shtml
CBS Interactive. (2009). Retrieved February 28, 2009, from Tech republic:
http://whitepapers.techrepublic.com.com/
Chapman, J. A., & Lovell, G. (2006). The competency model of hospitality service: why
it doesn't deliver. International Journal of Contemporary Hospitality
Management , 18 (1), 78-88.
Cox, M., Jacobs, E., & Mayer, J. (2003, November 20). Starwood Hotels and Resorts -
A case study. NY: Cornell University. Retrieved March 10, 2009, from
http://www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/research/casestudi
es/ starwood.pdf
Datamonitor. (2008 a). Country Analysis Report Australia - In depth PESTLE analysis.
Datamonitor. Retrieved March 3, 2009, from MarketLine database
Datamonitor. (2008 c). Hotels & Motels in Australia. Datamonitor. Retrieved March
5, 2009, from MarketLine database.
Datamonitor. (2008 d). Hotels & Motels in Pacific and Asia. Datamonitor. Retrieved
March 5, 2009, from MarketLine database.
Datamonitor. (2008 f). Starwood Hotels & Resorts Worldwide, Inc. Datamonitor.
Retrieved March 3, 2009, from MarketLine database.
Hilton Hotel Corporation. (2009). Hilton Brisbane. Retrieved February 15, 2009, from
Hilton Hotel Corporation: http://www1.hilton.com/en_US/hi/hotel/BSBHITW-
Hilton-Brisbane/index.do?ctyhocn=BSBHITW
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Hospitality Net. (2006, February 15). ew Hilton Hotels Advertising Campaign Earns
Industry Praise; Travel Should Take You Places™ Campaign Takes Home Honors
for One of the World's Leading Hoteliers. Retrieved February 28, 2009, from
Hospitality Net: http://www.hospitalitynet.org/news/4026357.search?
query=hilton+hotel+advertising
International Monetary Fund. (2009, January 28). World growth grinds to virtual
hald, IMF urges decisive global policy response. Retrieved February 15, 2009,
from International Monetary Fund:
http://www.imf.org/external/pubs/ft/survey/so/2009/RES012809A.htm
Morning Star. (2007). Hilton Hotels Corporation. Retrieved February 17, 2009, from
Morning Star: http://quicktake.morningstar.com/StockNet/Financials.aspx?
Country=USA&Symbol=HLT#hisoviewanchor
Professional Travel Guide. (2009). Brisbane Hotel Guide: Hilton Brisbane. Retrieved
March 28, 2009, from Professional Travel Guide:
http://www.professionaltravelguide.com/Destinations/Brisbane-
Australia/Hotels/Reviews/Hilton-Brisbane-p1077803
Trip Advisor. (2009). Hilton Brisbane: Traveler Reviews . Retrieved March 10, 2009,
from Trip Advisor: http://www.tripadvisor.com/ShowUserReviews-g255068-
d255652-r27071151-Hilton_Brisbane-Brisbane_Queensland.html
Von Bodman, P. C. (2003, November 20). Hilton Corporation - A Case study. NY:
Cornell University. Retrieved March 9, 2009, from
http://www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/research/casestudi
es/hilton.pdf
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