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Hilton Hotel, Case Study

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Submitted By dianamantis
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SUBJECT: Case Study: Hilton Hotels – Brand Differentiation Through Customer Relationship Management
List of Key Issues or Problems in the Case * Hilton’s strategy to maintain its leadership position in the US as well as in the international lodging market * Hilton’s focus on profitability and Return on Investment * Personalized customer service and development of Customers Really Matter initiative (CRM) * Implementation of a new enterprise system OnQ and the associated costs * Maintaining competition with other hotel brands
Discussion questions 1. What is Hilton’s core business?
The case presented in the book describes the evolution of Hilton Hotels Corporation, nowadays known as Hilton Worldwide. It is a public company founded in 1919 by Conrad Hilton. Hilton is one of the leading hospitality companies comprised of over four thousand hotels in ninety-one countries. Hilton’s web site states the following:
“Ten brands, more than 4,100 hotels, and more than 300,000 Team Members across corporate offices and owned, managed and franchised properties make us the world’s leading hospitality company.”
Hilton’s core business is to provide outstanding customer care of their guests, ensure their one of a kind experience while staying at the hotel. The acquisition of Promus Hotel Corporation in the year of 2000 added additional 1700 hotels to Hilton Worldwide. The company also invests heavily in the new hotel development, franchising and affiliating with real estate owners. Hilton Worldwide owns a considerable amount of real estate, world recognized brand names as well as products. Going public in December 2013, Hilton is expected to generate additional 4 billion dollars by selling its stock. 2. Evaluate the performance of the Customers Really Matter initiative to date.
The introduction of the Customer Really Matter initiative was first and foremost supported by the main strategy of the company to maintain excellence in customer service and improve experience of the guest staying in the Hilton hotel. The main goal of the CRM program is to create a better, closer relationship with guests and secure their loyalty to the brand. In order to do so, the CRM promise was introduced. Thus, Hilton managed to personalize check-in experience of the guest by prior recognition of the guest at the reservation center, which also significantly improved the efficiency of the front desk personnel, as well as the hotel phone operators by reducing their time of inputting the guests’ information into the system. One of the beneficial effects of the CRM on Hilton’s operations was the creation of the personal dossier for every guest of the hotel. The dossier usually contains general guest’s information as well as the needs and requests that were ever made by the guest staying in any property in the Hilton system. The Best Guests arrival report was introduced. Storing detailed information about the guest enabled the company to improve its flexibility. One of the key features of the CRM is the employment of the Satisfaction and Loyalty Tracking survey that enabled hotel management to better analyze and predict trends in guests preferences and concerns. If a guest had a bad experience staying in one of the Hilton hotels, service recovery is encouraged by the CRM in order to regain customer trust.
The CRM of the Hilton Corporation overall proved successful, though not without certain downfalls. According to Tim Harvey, EVP of Shared Services and CIO of Hilton Hotels, “From an electronic standpoint, CRM has been successful. The one that is hard is how effective are you at the front desk to create a personalized interaction.” He also mentions that “The CRM area is the absolute hardest ROI, it is almost impossible to measure a-priori.”
Considering the size of the company it is challenging to implement CRM at all locations. 3. What do you think Hilton leadership should do after the Blackstone acquisition? Should they further invest in CRM or simply maintain the status quo? What aspects of Hilton’s CRM should be strengthened, if any, and how?
They should definitely further improve and invest in their CRM program since it has a direct impact on their business of hotel operations. Prior to do so, it would be beneficial to measure the ROI to better plan future investments in the program. One of the weakest and most underdeveloped components of Hilton’s information system is “the people” component that also affects the structure of the organization. It is important to analyze and resolve the issue of the staff turnover. When introducing a new technology, Hilton should ensure the second order change “Informate” by carefully training the hotel personnel, which in turn will improve the operation of front desk. The Best Guests arrival report, as well as the operational software has to be in easy formats and user friendly to prepare front office employees of the hotel to provide more personalized customer service, for example, recognize the guest by his name or offer the newspaper of his preference. The multiple and simultaneous pre-assignments issue must be regulated by informing a guest about the availabilities during the reservation process. A new software might be implemented for that purpose.
The SALT results should be monitored daily to enhance the overall positive rating of the hotel. It might prove beneficial to share the results of the survey with the employees of the hotel and schedule routine customer service training classes.

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