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Hilton Strategic Management Presentation
- 1. Hilton Alex Mutch - MarketingManagement Brenna Adamski - Marketing Management David Hong - Marketing Management Edwin Chao - Marketing Management Leslie Teater - Marketing Management
- 2. Hilton Worldwide Brands IntroductionMission Statement Opportunity Statement Sustainable Competitive Adv.
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- 4. Background & History 1919 1927 Conrad Hilton bought firsthotel First hotel to add amenities 1946 Hilton Hotels Corporation goes public Multi-hotel reservation system 1948 1957 Marriot enters industry Hyatt founded 1959 First airport hotel opened 1929 - 1939 Great Depression Introduction Background & History Mission Statement Opportunity Statement
- 5. Background & History 1962 1964 Hyattgoes public Hilton International Corporation splits to go global Barron Hilton replaces Conrad Hilton as President 1967 1973 Hilton has customer service breakthrough Introduces HHonors loyalty program 1987 1995 First Hilton website launches Hilton International sold Conrad Hilton passes away 1979 Introduction Background & History Mission Statement Opportunity Statement
- 6. Background & History 1996 2006 Stephen Bollenbach isfirst non- Hilton CEO Hilton International reacquired Blackstone Group buys Hilton and goes private 2007 2008 Airbnb founded Lightstay introduced 2009 2013 Hilton returns to NYSE Christopher Nassetta becomes president and CEO Become Hilton Worldwide and changes HQ Hilton launches a vacation subsidiary 2002 Introduction Background & History Mission Statement Opportunity Statement
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- 8. Mission Statement “To bethe preeminent global hospitality company - the first choice of guests, team members, and owners alike.” Background & History Mission Statement Opportunity Statement Sustainable Competitive Adv.
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- 10. Opportunity Statement The hospitalityindustry is highly competitive, filled with pricing and sales promotions, resulting in price wars. In this industry, Hilton possesses a pristine brand image that has the ability to be further leveraged in order to differentiate itself from competitors in the future. With the current influx of consumers in the lodging industry, Hilton is now presented the opportunity to further utilize its intellectual capital and create sustainable competitive advantage. Mission Statement Opportunity Statement Sustainable Competitive Adv. Significance to Leadership
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- 12. Sustainable Competitive Advantage Along-term competitive advantage that is not easily duplicated by other competitors. This is developed by solidifying a pristine brand image, utilizing intellectual capital, offering exceptional services, and strengthening customer loyalty. Opportunity Statement Sustainable Competitive Adv. Significance to Leadership Research Methodology
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- 14. Significance To Leadership Hiltonis a part of a highly competitive and fast growing industry in hotel service. As a result, we have uncovered new forms of underleveraged resources within the company and have developed detailed programmatic recommendations that will maximize these forms of sustainable competitive advantage. Sustainable Competitive Adv. Significance To Leadership Research Methodology Expected Outcomes
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- 16. Research Methodology Secondary research Environmentalscanning & monitoring Trusted, peer-reviewed sources Google Finance Business Insider Forbes Wall Street Journal Domestic focusSignificance to Leadership Research Methodology Expected Outcomes Leadership
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- 18. Expected Outcomes Improved customerdatabase Differentiated customers Increase in customer loyalty Increased customer share Move to value-based pricing Leverage strategic alliances Movement away from third-party sources Decrease in long-term debtResearch Methodology Expected Outcomes Leadership Corporate Culture
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- 20. Leadership ● Three Presidents;Nine Executive Vice Presidents ● Most have worked with Hilton eight years or less ● High levels of experience in the hospitality industry Joe Berger Kristin Campbell Christopher Nassetta Kevin JacobsIan Carter Jim Holthouser William Margaritis Matt Richardson Martin Rinck Matthew Schuyler Chris Silcock Simon Vincent Mark Wang Expected Outcomes Leadership Corporate Culture Human Resources Management
- 21. Conrad Hilton CEO &Founder of Hilton Emphasis on innovation and empowerment Focus on charity and developing the community “Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don't quit.” “Enthusiasm is a vital element toward the individual success of every man or woman.” “The practice of charity will bind us... will bind all men in one great brotherhood.” (CEO 1919-1967) Expected Outcomes Leadership Corporate Culture Human Resources Management
- 22. Stephen Bollenbach Prior CEOof Hilton Worked as Donald Trump’s CFO Worked with Disney & Marriott as CFO & Treasurer Recruited by Barron Hilton in 1996 Focused on making profit with every decision “There are a lot of bargains out there, ... Every acquisition you make is accretive to earnings. It's a real value creator.” “We want to continue getting out of the real estate business and more into the (CEO 1996-2007) Expected Outcomes Leadership Corporate Culture Human Resources Management
- 23. Christopher Nassetta Previously workedfor Host Hotels and Resorts as COO Later became CEO Hired by Jonathan Gray of Blackstone Group as President and CEO for Hilton in 2007 Made a worldwide Hilton tour Began changes in organizational structure “People were living in ivory towers. Some in Beverly Hills. We didn’t have the connectivity. The hotels were saying, ‘Leave us alone. I don’t like you corporate types.’ We had become siloed.” (CEO 2007-Present) Expected Outcomes Leadership Corporate Culture Human Resources Management
- 24. Christopher Nassetta Implemented acorporate wide CRM system Emphasis on leveraging intellectual capital Customer focused “Even the posters listing corporate guidelines differed from hotel to hotel, driving Nassetta — who puts great stock in business culture — crazy.” “There was a lot of what he did that was simply listening to the customer.” Expected Outcomes Leadership Corporate Culture Human Resources Management (CEO 2007-Present)
- 25. Joe Berger Executive VicePresident and President of the Americas Oversees the operations of over 350 corporately owned Hilton hotels in the Americas Graduated with a masters degree in finance Career in the Hotel Industry Prior to Hilton, four years at LXR as Co-President Worked internationally in operations and finance for Marriott (VP 2007-Present) Expected Outcomes Leadership Corporate Culture Human Resources Management
- 26. William (Bill) Margaritis Overseescorporate branding, internal and external communications, government relations, issues and crisis management, and corporate responsibility programs Been with the company since August 2015 Spent prior fifteen years at FedEx as Senior Vice President, Global Communications & Investor Relations One of the only Executives without hospitality experience Graduated from Michigan State with a degree in business (VP 2015-Present) Expected Outcomes Leadership Corporate Culture Human Resources Management
- 27. William (Bill) Margaritis "Aswe continue to gain momentum and accelerate our growth around the world, finding additional ways to reach, engage and connect with our most critical stakeholders becomes even more important. Bill’s breadth of experience and his broad understanding of global business and markets will help us build, strengthen and execute an integrated strategy across Hilton that will enhance our industry leadership position and our ability to differentiate ourselves in the marketplace.” - Christopher Nassetta Background & History Mission Statement Opportunity Statement Significance of LeadershipExpected Outcomes Leadership Corporate Culture Human Resources Management
- 28. Chris Silcock Leads thecompany's global commercial team, including sales, revenue management, regional marketing and eCommerce, and Hilton reservations and customer care Twenty years in Hilton Began his career with Hilton as a catering and banquet waiter Head of Sales and Revenue Management Head of Online and Regional Marketing Degree in Computer Studies from University of Essex (VP 1995-Present) Expected Outcomes Leadership Corporate Culture Human Resources Management
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- 30. Values Hospitality “We're passionateabout delivering exceptional guest experiences.” Integrity “We do the right thing, all the time.” Leadership “We're leaders in our industry and in our communities.” Teamwork “We're team players in everything we do.” Ownership “We're the owners of our actions and decisions.” Now “We operate with a sense of urgency and discipline.” Leadership Corporate Culture Human Resources Management Operations
- 31. Corporate Culture Leadership CorporateCulture Human Resources Management Operations Hilton’s Diversity Statement “Our priority is to understand and embrace unique global cultures to ensure that our Team Members are seen, heard, valued and respected. As a result, our senior leadership is committed to investing in programs that promote diversity such as, inclusion training and celebrations of international traditions and customs. Globally, we also aim to increase our presence in local communities through employee volunteerism, partnerships and giving programs.” “Ultimately, I have a very simple philosophy on diversity: It is what allows us to perform and deliver for our customers and, frankly, outperform the competition.” - Christopher Nassetta
- 32. Internal Diversity Programs ExecutiveDiversity Council Team Member Resource Groups Diversity Compliance Training Diversity, Inclusion You e-Training course Internal Communications “As a part of our commitment to diversity and inclusion, we created the Executive Diversity Council, comprised of the company's most senior leaders, and chaired by our President and CEO, Christopher J. Nassetta. The Executive Diversity Council provides oversight and direction to the overall diversity strategy related to our culture, talent and marketplace.” - Christopher Nassetta Leadership Corporate Culture Human Resources Management Operations
- 33. Organizational Structure Christopher Nassetta CEO JimHolthouser Kevin Jacobs Matthew Schuyler Simon VincentMatt Richardson Kristin Campbell Ian Carter Martin Rinck Mark Wang William Margaritis EVP Corporate Affairs Joe Berger EVP, President, Americas Chris Silcock EVP and CMO Middle Management Staff Members Leadership Corporate Culture Human Resources Management Operations
- 34. Organizational Structure Leadership CorporateCulture Human Resources Management Operations “People were living in ivory towers. Some in Beverly Hills. We didn’t have the connectivity. The hotels were saying, ‘Leave us alone. I don’t like you corporate types.’ We had become siloed.” - Christopher Nassetta
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- 36. Human Resources Corporate CultureHuman Resources Management Operations Finance “You first have to get the right people on the bus, get the wrong people off the bus, make sure the right people are in the right seats before you decide where you’re driving the bus’ … that was a philosophy that I followed.” - Christopher Nassetta
- 37. Human Resources: Recruiting CoreSchool Alliances 16 schools where recruiters look for potential interns Career page Indeed.com ● Hilton Worldwide University Corporate Culture Human Resources Management Operations Finance
- 38. Human Resources: Hiring CorporateCulture Human Resources Management Finance Marketing Application is online Resume sent to different departments Corporate Culture Human Resources Management Operations Finance
- 39. Human Resources: Training Part-Time:20 hours Full-Time: 45 hours Hilton Worldwide University Five Different Colleges Corporate Culture Human Resources Management Finance MarketingCorporate Culture Human Resources Management Operations Finance
- 40. Human Resources: Training CorporateCulture Human Resources Management Finance MarketingCorporate Culture Human Resources Management Operations Finance
- 41. Human Resources: Retaining “OurTeam Members are at the heart of our success and we are committed to ensuring Hilton is a place where they can grow both personally and professionally.” -Christopher J. Nassetta Corporate Culture Human Resources Management Finance MarketingCorporate Culture Human Resources Management Operations Finance
- 42. Human Resources: Retaining Professionaldevelopment opportunities Nassetta’s annual “Catch Me at My Best” 30 paid days of holiday/vacation Tuition reimbursement of $1200 GED Assistance Program Parental Leave Program Corporate Culture Human Resources Management Finance MarketingCorporate Culture Human Resources Management Operations Finance
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- 44. Operations: Overview HQ inMcLean, Virginia Previous HQ was in Beverly Hills, California until 2009 Total of 157,000 Team Members around the world Human Resource Management Operations Finance Marketing
- 45. Operations: Statistics Brand HotelsTotal Rooms Hilton 560 28.1% Hampton 2,005 27.8% Doubletree 410 14.1% Hilton Garden Inn 618 12.0% Human Resource Management Operations Finance Marketing
- 46. Operations: Ownership Human ResourceManagement Operations Finance Marketing Hampton Inn Franchise Ranking by Entrepreneur.com
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- 48. Human Resources ManagementFinance Marketing Conclusion Financial Introduction Operations Finance Marketing External Analysis
- 49. Human Resources ManagementFinance Marketing Conclusion Stock Price (2 Years) Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis IPO: $20; 117,640,624 Shares (NYSE: HLT) Current: $23.37; 1.232 M Shares
- 50. Human Resources ManagementFinance Marketing Conclusion Stock Price (2 Years) Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis IPO: $20; 117,640,624 Shares (NYSE: HLT) Current: $23.37; 1.232 M Shares
- 51. Human Resources ManagementFinance Marketing Conclusion Stock Price (2 Years) Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis IPO: $20; 117,640,624 Shares (NYSE: HLT) Current: $23.37; 1.232 M Shares
- 52. Human Resources ManagementFinance Marketing Conclusion Income Statement - Numbers in Millions Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 53. Human Resources ManagementFinance Marketing Conclusion Balance Sheet - Numbers in Millions Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 54. Current Ratio Measures acompany’s ability to pay short-term obligations Current Assets Current Liabilities Human Resources Management Finance Marketing Conclusion Short-Term Solvency Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 55. Cash Ratio Measures theability to pay off debt obligation using cash on hand Cash and Equivalents Current Liabilities Human Resources Management Finance Marketing Conclusion Short-Term Solvency Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 56. Total Debt Ratio Aconservative measure of long- term solvency Total Liabilities Total Assets Human Resources Management Finance Marketing Conclusion Long-Term Solvency Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 57. Debt-to-Equity Ratio A measureof debt leverage Total Liabilities Total Stockholder’s Equity Human Resources Management Finance Marketing External Analysis Long-Term Solvency Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 58. Total Asset Turnover Salesgenerated per dollar of assets Sales Total Assets Human Resources Management Finance Marketing External Analysis Asset Utilization Operations Finance Marketing External Analysis
- 59. Profit Margin Shows whatpercentage of every dollar is kept in earnings Net Income Sales Human Resources Management Finance Marketing External Analysis Profitability Operations Finance Marketing External Analysis
- 60. Return on Assets Earningsthat are generated from invested capital Net Income Total assets Human Resources Management Finance Marketing Conclusion Profitability Human Resources Management Finance Marketing External AnalysisOperations Finance Marketing External Analysis
- 61. Price Earnings Ratio Amountinvestors pay for one dollar of earnings Market Value per Share Earnings per Share Human Resources Management Finance Marketing External Analysis Market Value Operations Finance Marketing External Analysis
- 62. The percentage ofall rental units (rooms) are occupied or rented at a given time Human Resources Management Finance Marketing External Analysis Occupancy Rate Operations Finance Marketing External Analysis
- 63.
- 64. Products Finance Marketing ConclusionFinanceMarketing External Analysis SWOT
- 65. Products Finance Marketing ExternalAnalysis SWOT
- 66. Products Finance Marketing ConclusionFinanceMarketing External Analysis SWOT
- 67. Products Finance Marketing ExternalAnalysis SWOT
- 68. Price: Average DailyRate (ADR) $141.52 $150.67$169.89 Finance Marketing External Analysis SWOT
- 69. Price: Average DailyRate (ADR) $369.00 $357.00$349.00 Finance Marketing External Analysis SWOT
- 70. Price: Average DailyRate (ADR) $111.21 $103.00$113.00 Finance Marketing External Analysis SWOT
- 71. Price: Pricing Strategies FinanceMarketing External Analysis SWOT ● Premium pricing strategy ○ High-level prices ■ Perceived to have excellent quality and additional characteristics and features ● Variable pricing
- 72. Price Finance Marketing ExternalAnalysis SWOT ● Guaranteed lowest price ● Why book directly with Hilton? ○ Always find the lowest price on our websites or we'll give you $50.
- 73. Place Website booking on hilton.com Third-partybooking Finance Marketing External Analysis SWOT
- 74. Place 4,440 hotels Over 730,000rooms 97 countries and territories All 50 states Finance Marketing External Analysis SWOT
- 75. Place Three major factorswhen a new Hilton location is considered: Where - The Geographical location must be convenient When - Timely response to a customer’s schedule How - Events and meetings tailored to customer’s needs Finance Marketing External Analysis SWOT
- 76.
- 77. Advertising Finance Marketing ExternalAnalysis SWOT Average: $246 Million per Year
- 78. Public Relations Finance MarketingExternal Analysis SWOT ● “Nassetta Inducted into Hospitality Industry Hall of Honor”- 10/21/2015 ● “Hilton Hawaiian Village Prepares Thanksgiving Meals for Hundreds in Need”- 11/25/15 ● “Hilton Atlanta Sells for $146 million”- 10/30/15 ● “Hilton Hotel Reports POS Data Breach” 11/26/15 ● “Hilton Brings Digital Key to Android”- 10/6/15
- 79. Sales Promotion Finance MarketingConclusionFinance Marketing External Analysis SWOT
- 80. Personal Selling Finance MarketingConclusion ● “Globally Motivated, Individually Focused” ● Over 700 sales professionals in 34 regional offices around the world ● Strategic Account Management team dedicated to negotiating customizable deals with customers ● Drives profit and leads to stronger and more committed relationships Finance Marketing External Analysis SWOT
- 81. Direct Marketing Finance MarketingConclusion ● HHonors program and app ○ Various tiers ● Developed customer database ● Strong social media presence and interaction Finance Marketing External Analysis SWOT
- 82. Direct Marketing Finance MarketingConclusionFinance Marketing External Analysis SWOT
- 83. Direct Marketing Finance MarketingConclusionFinance Marketing External Analysis SWOT
- 84.
- 85. Macroeconomic Factors ● Volatileindustry ● Changes in demands for hotel rooms, occupancy levels, and room rates ○ High dependency on the economic cycle ● Changes in the consumer location preference ● Dependent on transportation industry ● Cyclical and seasonal ● Environmental laws ● Government regulation Marketing External Analysis SWOT Sustainable Competitive Adv.
- 86. Macroeconomic Factors Finance MarketingExternal Analysis ● War, political conditions or civil unrest ● Decreased corporate or government travel-related budgets and spending ● Statements, actions, or interventions by governmental officials ● Negative media exposure in certain locations (Ebola, Sars, H1N1, Avian flu) ● Cyber-Attacks ● Natural or man-made disasters Marketing External Analysis SWOT Sustainable Competitive Adv.
- 87. Industry Competition: Direct FinanceMarketing Conclusion ● Current Stock Price: 71.11 per share ○ P/E Ratio: 26.45 ○ Average Volume of 26.2 M ● Social Involvement ● “We Embrace Change” ○ Innovation has always been part of the Marriott story Marketing External Analysis SWOT Sustainable Competitive Adv.
- 88. Industry Competition: Direct FinanceMarketing Conclusion ● Current Stock Price: 50.06 per share ○ P/E Ratio: 27.42 ○ Average Volume of 440,492 ● Environmental Friendly ● “We make a difference in the lives of those we 'touch' every day.” Marketing External Analysis SWOT Sustainable Competitive Adv.
- 89. Industry Competition: Indirect FinanceMarketing ConclusionMarketing External Analysis SWOT Sustainable Competitive Adv.
- 90. Industry Technology ● Apps ●Digital Key ● Website Marketing External Analysis SWOT Sustainable Competitive Adv.
- 91. Industry Consumer Finance MarketingConclusion ● According to “Small Business” by Demand Media, “Trend Watching”, and “Hospitality Technology”, the industry consumer is: ○ Looking for value ○ Typically possesses disposable income ○ Appreciates option of Rewards program ○ Prefer self-service check-ins and online transactions ○ Interested in personal health and wellness Marketing External Analysis SWOT Sustainable Competitive Adv.
- 92.
- 93. Positive Negative Internal StrengthsWeaknesses External Opportunities Threats SWOT Analysis
- 94. Strengths Corporate leadership Corporate culture Strongintellectual capital Ethnic diversity amongst employees Organizational structure HRM HHonors database & app Industry leader in market share Positive Negative Internal Strengths Weaknesses Externa l Opportunitie s Threats External Analysis SWOT Sustainable Competitive Adv. Viable Alternatives
- 95. Weaknesses Lack of advertisingmeasurability High long-term debt Decreasing timeshare profitability HHonors promotions Underleveraged HHonors database Underleveraged strategic alliances Lack of room standardization Research and Development department Positive Negative Internal Strengths Weaknesses Externa l Opportunitie s Threats External Analysis SWOT Sustainable Competitive Adv. Viable Alternatives
- 96. Opportunities Exclusive booking toHilton.com App & technology development Economic recovery Increase in consumer disposable income Decreased transportation costs Growing availability of strategic alliances Reduced threat of disease Increased credit card security Positive Negative Internal Strengths Weaknesses Externa l Opportunitie s Threats External Analysis SWOT Sustainable Competitive Adv. Viable Alternatives
- 97. Threats Increase of competition(direct and indirect) New forms of travel stay Growth of third-party booking sites Marriott’s recent acquisition of starwood High market volatility International civil unrest Decrease in international travel Industry wide cyber attacks Positive Negative Internal Strengths Weaknesses Externa l Opportunitie s Threats External Analysis SWOT Sustainable Competitive Adv. Viable Alternatives
- 98.
- 99. Sustainable Competitive Advantage Along-term competitive advantage that is not easily duplicated by other competitors. This is developed by solidifying a pristine brand image, utilizing intellectual capital, offering exceptional services, and strengthening customer loyalty. SWOT Sustainable Competitive Adv. Viable Alternatives Minor Recommendations
- 100. New Sources ofSustainable Competitive Advantage Develop our database asset Comprehensive loyalty program and application Leverage intellectual capital Empower front-line employees Promote and enhance positive consumer perception of brand image SWOT Sustainable Competitive Adv. Viable Alternatives Minor Recommendations
- 101.
- 102. Viable Alternatives Implement anon-going immersion program Management develops a stronger connection to employees and customers Expensive and time-consuming Initiate a Business Leadership Summit Collaborate with and learn from leaders in other industries Difficult to implement Sustainable Competitive Adv. Viable Alternatives Minor Recommendations Major Prog. Recommendation
- 103. Viable Alternatives Standardize, renovate,and modernize all rooms Provides brand continuity Expensive Create a new Research & Development department Leverages new opportunities and fosters innovation Costly undertaking Sustainable Competitive Adv. Viable Alternatives Minor Recommendations Major Prog. Recommendation
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- 105. Minor Recommendations Streamline distributionchannels Utilize our leverage in relationships with third party sources Strengthen and create strategic alliances Establish Matrix structure Develop an Employee Service Representative position Connect with employees Viable Alternatives Minor Recommendations Major Prog. Recommendation Areas of Future Study
- 106.
- 108. Customer Tiers Blue (0Points) Silver (1,000) Gold (7,000) Diamond (12,000) ● Room selection ● Digital key ● Room customization ● Blue rewards ● iPads ● Premium Wi-fi ● Spa access ● Premium Spotify & Hulu access ● Late check-out ● Digital check-in ● Silver Rewards ● Personal assistant ● Premium Starz access ● VIP parking ● Exclusive hors d’oeuvres ● Gold Rewards ● Exclusive concert access ● Sleep Number bed $1 of hotel = 1 Point $1 of spa = 2 Points $1 of event space = 2 Points Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 109. A continuation ofsome of the services from HHonors Selecting a specific room Digital room key Additional customization options that Hilton can store in database Number of pillows Housekeeping times Temperature of the room Shampoo type Blue Tier Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest? (0 Points)
- 110. Premium Wi-fi Exclusive spaaccess Pool, sauna, and shower access Spotify & Hulu access Late check-out Digital check-in iPads Silver Tier Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest? (1,000 Points)
- 111. Minor Recommendations MajorProg. Recommendation Areas of Future Study Would You Invest?
- 112. Menu of options Pergeographic location Uncovered during research Personal assistant per Dwell floors (as needed) Digital access to assistants Starz premium access VIP parking Exclusive hors d’oeuvres upon arrival Gold Tier Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest? (7,000 Points)
- 113. Exclusive event access Meetand greets Concert access Red carpet access Sleep Number beds Diamond Tier Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest? (12,000 Points)
- 114. Cultural Feasibility Corporate philosophy Positiveattitudes toward change and innovation Customer focus Eager to improve “We were complacent. There was no culture of innovation. It was more a culture of do it at a relatively slow pace and do it the way we’ve always done it... It just wasn’t organized in the right way.” - Christopher NassettaMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 115. Financial Feasibility 44 millionHHonors members 50% of guests are HHonors members $720 Million spent in 2014 for HHonors Additional profit loss from redeemed reward nights $730 Million of Cash flow in 2014 Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 116. Rollout In January 2016: 150strategic, domestic locations with varying demographics Opt-in for current HHonors members One year of data gathering Survey In January 2017: One year to redeem points Six-months of final point accumulationMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 117. Rollout In July 2017: Oneyear to redeem points Six-months of Dwell points Final phase out HHonors program In January 2018: Full implementation of Dwell program Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 118. Expected Outcomes Improved customerdatabase Differentiated customers Increase in customer loyalty Increased customer share Move to value-based pricing Leverage strategic alliances Movement away from third-party sources Decrease in long-term debtMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 119. Metrics Enrollment Data Carry overfrom HHonors New Dwell members Changes in tier population Member retention rates Member Satisfaction Survey Time spent on app and with value-added programs Track spa revenueMinor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 120. 5 Golden Questions Asan enrolled Hilton Dwell Member… How did you hear about Dwell? What did you like about the Dwell? What did you dislike about Dwell? Will you be using the Dwell Program more often? Would you like to opt-in for more loyalty member information? Minor Recommendations Major Prog. Recommendation Areas of Future Study Would You Invest?
- 121. Areas of FutureStudy
- 122. Areas of FutureStudy HRM program Differentiate employees by value Further utilize matrix structure and diversity High school and college curriculum Brand expansion opportunities Major Prog. Recommendation Areas of Future Study Would You Invest? Spiritual Implications
- 123.
- 124. Would You Invest? Yes! Areasof Future Study Would You Invest? Spiritual Implications Conclusion
- 125.
- 126. Spiritual Implications 1 Timothy6:10 “For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” Colossians 3:23 “Whatever you do, work heartily, as for the Lord and not for men” Would You Invest? Spiritual Implications Conclusion
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- 128.
- 129. Hilton Alex Mutch - MarketingManagement Brenna Adamski - Marketing Management David Hong - Marketing Management Edwin Chao - Marketing Management Leslie Teater - Marketing Management
- 130.
- 131. Additional Finance Points Blackstoneacquired Hilton Hotels in 2007 Purchased at $26 billion including debt “Right now, income is being used to service debt and not invest in the business. This could hamstring Hilton for a while.” - Michelle Grant, A Travel and Tourism Manager at Euromonitor (2007)
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- 133.
- 134. 2006 Debt From Hilton’s2006 Annual Report: “At December 31, 2006, we had total debt of $6.97 billion (net of approximately $500 million of debt and capital lease obligations resulting from the consolidation of certain joint-venture entities and a managed hotel, which are non-recourse to us). Subsequent to the acquisition of Hilton International, we reduced our indebtedness by approximately $1.6 billion. A focus of our financial strategy for 2007 is further debt reduction through operating cash flow and the proceeds of asset sales. Total cash and equivalents (including restricted cash of approximately $293 million) were approximately $431 million at December 31, 2006.”
- 135. Timeshare ● Introduced in2002 ○ Invested $60 million on new development ● Collaboration with premier timeshare real estate development firms ● 240,000 Club Members ● A collection of 60 club affiliated resorts ○ Includes those developed, managed, and franchised by Hilton Worldwide ● According to 2014 Annual Report: ○ Pulling away from timeshares ■ High cost, low demand = deteriorating profit margin
- 136. Timeshare ● Three mainareas of revenue: ○ Timeshare sales ■ Does so with Hilton and third party vendors ○ Resort operations ■ HGV club ■ Rental revenue, enrollment fees, annual fees, and transaction fees ○ Financing ■ Interest from the provided loans for customers buying timeshares
- 137. Timeshare Competition Compete withother hotel and resort timeshare operators for sales based on: Location Quality of accommodations Price Financing terms Quality of service Terms of property use Opportunity for timeshare owners to exchange into time at other timeshare
- 138. Timeshare Competition (Cont.) Primarycompetitors: Hyatt Residence Club Marriott Vacations Worldwide Corp. Starwood Vacation Ownership Wyndham Vacation Resorts
- 139. A Customer’s Journey December 2015 January 2016 July 2016 November 2016 February 2017 61,000 HHonors Points Silver HHonorsTier 61,000 HHonors Points Blue HHonors Tier 1,000 HHonors Points (60,000 HHonors points redeemed for 2 free nights) Blue HHonors Tier 1,000 HHonors Points 1,000 Dwell Points Blue HHonors Tier Silver Dwell Tier 0 HHonors Points 4,000 Dwell Points Silver Dwell Tier
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- 141.
- 142.
- 143.
- 144. HHonors Details “When pointsare earned by Hilton HHonors members, the property or affiliated partner pays Hilton HHonors based on an estimated cost per point for the costs of operating the program, which include marketing, promotion, communication, administration and the estimated cost of award redemptions… We provide Hilton HHonors as a marketing program to participating hotels, with the objective of operating the program on a break-even basis to us.” - Christopher Nassetta, 2014 Annual Report
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- 148.
- 149. J.D. Power GuestSatisfaction
- 150. J.D. Power GuestSatisfaction
- 151. J.D. Power GuestSatisfaction
- 152. J.D. Power GuestSatisfaction
- 153. J.D. Power GuestSatisfaction
- 154. Background & History ●1962: Hyatt became a public company ● 1964: Hilton began to expand his operations outside of the United States and renamed the company ○ It became one of the largest hotel businesses in the world. The company expanded its operations into credit cards, car rentals, and other services ● 1965: Launch of Lady Hilton, the first hotel concept designed exclusively for women travelers ● 1967: Conrad Hilton resigns his presidency to become chairman ● 1968: Hyatt International was formed ● 1969: Marriott opens its first international hotel in Acapulco, Mexico ● 1970: Hilton becomes the first NYSE-listed company to enter the domestic gaming
- 155. Additional History 1972: Marriottnamed J.W. Marriott, Jr. Chief Executive Officer 1972: Hugh M. Friend, Jr because the new president of Hyatt 1973: Hilton develops the first centralized reservation service using computer technology, a breakthrough in customer service 1979: Conrad Hilton died on January 3, in Santa Monica, California 1985: J. Willard Marriott, Sr. passes away, and J.W. Marriott, Jr. is elected Chairman of the Board, Marriott 1987: Hilton introduces Hilton HHonors™, its guest loyalty program 1989: Hampton Hotels is the first hotel company to promise 100% Satisfaction Guarantee
- 156. Additional History 2007: Theaverage daily rate for a hotel room surpasses $100 2009: Hilton launches its first application for mobile devices 2011: Hampton Hotels, part of the Hilton brand, is named the #1 franchise opportunity by Entrepreneur Magazine 2013: Becomes the first hotel brand to earn over 1 million Facebook likes
- 157.
- 158. Kristin Campbell Responsible forleading Hilton Worldwide's global legal, compliance and government relations functions Graduated from Cornell with a Law degree Prior to Hilton, worked with Staples for eighteen years, serving as the company's senior vice president, general counsel, and corporate secretary
- 159. Ian Carter Was ChiefExecutive Officer of Hilton International prior to its re- acquisition by the company in 2006 Graduate of the University of West London, School of Business and Management, and received an honorary doctorate from the University for his industry accomplishments and ongoing support of the development of future hospitality leaders Prior to Hilton, served as Officer and President of Black & Decker Corporation, Middle East, Africa and Asia Responsible for all International operations Prior to Black & Decker, served as President of General Electric Specialty Chemical, after working his way up in the company
- 160. Jim Holthouser Company's globalleader for brand management and customer marketing across nine consumer brands MA in economics/political science from the University of Louisville and international MBA from the American Graduate School of International Management Series of senior management positions within Hilton Worldwide in the branding, franchising and marketing arenas More than 20 years of experience in the lodging, restaurant and gaming industries
- 161. Kevin Jacobs Oversees allof the company's global finance functions, as well as its global information technology function and all real estate and asset management aspects Joined the company in 2008 as Senior Vice President, Corporate Strategy Elected Treasurer in 2009 Appointed Executive VP and Chief of Staff in 2012 Prior to Hilton Worldwide, served as Senior Vice President, Mergers & Acquisitions and Treasurer of Fairmont Raffles Hotels International Prior to Fairmont, spent seven years with Host Hotels & Resorts,
- 162. Matt Richardson Oversees thecompany's global efforts regarding new build projects, capital improvements, technical advisory services, interior design and construction Prior to Hilton, served as Senior Vice President and Chief Development Officer for Host Hotels & Resorts, Inc., where he oversaw all of the company's design and construction activities Bachelor's degree in Urban Planning and his Master's degree in Business Administration from the University of Virginia
- 163. Martin Rinck Responsible forthe operations of over 90 trading hotels in the 18 countries across Asia Pacific Includes expansion plans - Doubling in the next year Been with Hilton since November 2008 Was Executive Vice President and Chief Development Officer for The Rezidor Hotel Group, where he drove significant growth for The Rezidor Hotel Group's hotel portfolio in Europe, the Middle East and Africa Experience in the global hospitality and restaurant industries MBA from Brunel University
- 164. Matthew Schuyler Chief HumanResources Officer for Hilton Worldwide and leads the company's global human resources organization Been with Hilton for past seven years Prior to Hilton, spent five years as Chief Human Resources Officer at Capital One Financial Corporation MBA from University of Michigan Serves on the Board of Directors for the Make-A-Wish Foundation of America Member of Penn State's College of Information Sciences and Technology Advisory Board
- 165. Simon Vincent Executive VicePresident & President, Europe, Middle East & Africa for Hilton Worldwide Based in London Been with company for eight years Overseen the opening of more than 100 hotels and spearheaded growth in the multi-brand proposition Includes Hampton and DoubleTree Twenty-year veteran of the leisure and travel industry Spent 13 years at the Thomas Cook Group, latterly as Chief Operating Officer of the UK Travel Division
- 166. Mark Wang President, HiltonGrand Vacations for Hilton Worldwide and oversees all of the company's global timeshare operations Been in role for seven years Previously Head of Hilton Grand Vacations, Asia Joined Hilton Grand Vacations in 1999 as Managing Director, Hawaii Held various positions since Prior to Hilton, founded and co-founded multiple hotel and hotel- consulting companies
- 167. Ronen Nissenbaum Vice Presidentof Operations for Luxury Hotels, America Hilton announced his appointment in November 2015 Previously worked in senior management for global corporations such as DIsney and InterContinental Hotel Group “Ronen’s ascension to this newly created role reflects our strong commitment to the luxury sector and to growing our luxury portfolio within the Americas,” - Joe Berger
- 168. Christopher Nassetta Most recentlyCEO of Host Hotels & Resorts, inc. Also served as Executive Vice president and COO for this company Co-founded Bailey Capital Corporation in 1991 Served as Chief Development Officer at the Oliver Carr Company, a commercial real estate firm Under Nasetta’s leadership, Hilton launched the Travel With Purpose initiative, a corporate commitment to diversity and inclusion, cultural awareness, community building and sustainable living
- 169. Christopher Nassetta “A balancedguy,” according to Edward Walter Relationally oriented, prioritizes family, talkative, loves tradition Focused on Employees Still visits many locations personally “With all his success in business, he always has stayed a really good guy,” - Jonathan Gray, Blackstone Group
- 170. Christopher Nassetta Got ridof ⅔ of executive leadership, “I was committed to look them in the eye, tell them what I’m doing, give them the reasons why and answer questions for as long as they wanted.” Improvement of business processes which saved a lot of money “We were able to save a ton of money without affecting performance one bit,” said Jacobs Believed his task was risky but possible “I went through the rationale. I said we’re all in this together and, if we don’t take steps to ensure our future, the risks of material damage to the business are significant.” “A lot of people were thinking we were going to fail,” Nassetta said. “And frankly, a lot of people were wanting us to fail. And we didn’t.”
- 171. ● Hilton createdthe Conrad N. Hilton Foundation in 1944, which awards an annual prize to exemplary organizations that work to end suffering in the world. It also supports programs for the blind and the homeless as well as education initiatives ● Team Member Resource groups ○ African American Team Member Resource Group ○ Asian and Pacific Islander Team Member Resource Group ○ Women's Team Member Resource Group ○ Hispanic/Latino Team Member Resource Group ○ LGBT & Friends Team Member Resource Group Team Member Resource Groups
- 172. Diversity Compliance Training DiversityCompliance Training Recognize the unique insights, perspectives, and background of others Create competitive advantages for ourselves by leveraging the diversity of our Team Members Develop an environment of trust, respect, and inclusion; and Avoid discrimination and disrespectful behavior
- 173. Diversity Awards External Recognitionfor Diversity (2013) Black EOE Journal – Top Diversity Employer (2013) Black EOE Journal – Top Supplier Diversity Program (2013) DiversityBusiness.com - Top 50 Organizations for Multicultural Business Opportunities, 45th Place HispanicBusiness.com – Top 25 Leaders in Supplier Diversity – Fred Lona, S. Director, Supplier Diversity (2013) DiversityBusiness.com - America 's Top Diversity Champions for 2013 – Fred Lona, Sr. Director, Supplier Diversity (2013) DiversityInc – 25 Noteworthy Companies (2013) DiversityInc – Top 10 Companies for Supplier Diversity (2013) DiversityInc – Top 10 Companies for Latinos (2013)
- 174. Diversity Awards (Cont.) ExternalRecognition for Diversity (Cont.) Hispanic Network Magazine – Top Diversity Employer (2013) Hispanic Network Magazine – Top Supplier Diversity Program (2013) LATINA Style Magazine – LATINA Style 50 Best Companies for Latinas Man About World – 2013 Editors Choice Award for Very Best in Gay Travel (2013) MBN USA 75 Leading Men in Corporate Supplier Diversity – Fred Lona, Sr. Director, Supplier Diversity (2013) Professional Women’s Magazine – Top Diversity Employer for Women (2013) Professional Women’s Magazine – Top Supplier Diversity Program for Women (2013) Working Mother Magazine – Best Company for Hourly Workers (2013) HRC Corporate Equality Index – 100 percent
- 175. Hilton’s View ofAirBNB Nassetta considers AirBNB to be in a different segment of the market than Hilton "The bulk of the demand is in higher rated, high-occupancy urban markets. It is longer length of stay with a predominantly leisure and value focus and stay occasions where customers are willing to accept inconsistent product with very limited services." “AirBNB doesn’t scare us.” "But I suspect over time everybody will see it for what it is: a really good business but a business that is largely distinct from what we do. There is every opportunity for both of us to have really successful business models."
- 176. Hilton’s Differentiation fromCompetition “We believe that our position as a multi-branded manager, franchisor, owner and operator of hotels makes us one of the largest and most geographically diverse lodging companies in the world.” - Christopher Nassetta, 2014 Annual Report
- 177. The Marketing Breakdown Hiltonhas many direct marketing that they implement Telemarketing Postal Mail “... hospitality intermediaries generally employ aggressive marketing strategies, including expending significant resources for online and television advertising campaigns to drive consumers to their websites.” -Hilton 2014 Annual Report
- 178. Profitability, HRM, &Renovations “We have focused on maximizing the cost efficiency and profitability of the portfolio by, among other things, implementing new labor management practices and systems and reducing fixed costs. Through our disciplined approach to asset management, we have developed and executed on strategic plans for each of our hotels to enhance the market position of each property, and at many of our hotels we have renovated guest rooms and public spaces and added or enhanced meeting and retail space to improve profitability.” - Christopher Nassetta, 2014 Annual Report