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    Hospitality Operation and Management by Hilton Company

    Question :

    Following are the questions which enlist hospitality operation management of given business are given below:

    • Make a report in context to the nature of the hospitality operations within an organisation.
    • Give the appropriate answers to show the individual understanding of the given assessment.
    • Perform the individual research in relation to the benchmarking purposes.
    Answer :


    Hospitality Operation management refers to the area of management in hospitality industry which is concerned with monitoring, controlling, designing and implementing the process of production of goods and services in order to earn maximum profitability ratio. In this assignment chosen organization is Hilton company which is one of the best American multinational hospitality company. It was founded in 1919 by Conrad Hilton with its headquarter in Virginia United States. This report explains about the nature of hospitality product and services. In addition to this key stages in product and services development applied within hospitality operation is also explained in this report. Moreover. Different methods of pricing and additional pricing consideration are also explained in this file. Lastly different range of performance appraisal techniques are also focused in this assignment. Lastly, approaches to business is also mentioned in this project.

    TASK 1

    AC 1.1 Nature of hospitality product and service areas

    Product refer to an item which is used for sale, it can be either service or an item. Each products and services is made at a cost and sold at a price so as to earn maximum profit for an organization. In case of Hilton hospitality industry there are several products and services which are being rendered to the customers in order to increase the productivity and profitability of business concern.(Chawla and Wiboonrat2013) Therefore each products and services supplied by Hilton company varies in nature, it can be both tangible and intangible products and services and they are explained below:<

    Perishable products and services: This types of products and services wont last for longer period of time and nether cant be experience the same as again. When such services are rendered by Hilton industry to the requesting service of customers after a time period such services irreversibly vanishes as it is used by the service user.

    Tangible/ In tangible products and services: Products and services rendered by Hilton industry can be tangible as well as intangible in nature. Tangible services refers to ambience conditions, interior and exterior design of hotel which are visible to the customers. Whereas intangible services refers to such services which cannot be seen or touched like feedback of customers toward their services rendered to them, empathy of customers and many more.

    Inseparable services: This types of services refer to those services which are rendered to the customers on the basis of their respective requirement and preferences. For example Hilton industry render services to the customer as per their requirement like the customer demand is the banquet hall mus be specially designed , then accordionist the industry render services to the customers.

    Overall it can be concluded that nature of product and services rendered by Hilton industry matter a lot so as to earn maximum profitability ratio.

    AC 1.2 Influences affecting demand patterns within hospitality operations.

    The demand of the customer varies as per the changes that is taking place in their needs and preferences of products and services. Specially in Hilton industry  demand of the customers varies seasonally, time of day/weeks, changes in cultural region etc. There are certain factors which are influencing the demand pattern of Hilton industry are as follows(Cope  2015):

    • Time of week/days: There is high demand for booking in Hilton hotel industry during the weekends specially for the couples.
    • Seasonality: It refers to the fluctuation taking places correspond to the changes in season and is the second most important factor which is influencing the demand pattern of Hilton industry. This is because regular customers of Hilton industry most prefer to visit during summer season as during this season they love to go for camping  in hilly areas. So during summer season demand pattern of Hilton industry moves upward.
    • Economic factor: This factor refer to the changes that is taking place in the income level, inflation rate, culture factor and life style of people. All this factor plays an important role while affecting the demand pattern of the Hilton industry. Like when the income level of  Hilton industry customers goes down then the demand pattern of the industry also slows down.
    • Healthy leaving: This factors also highly affect the demand pattern of Hilton industry as the customer of the Hilton industry prefer healthy foods and beverages. So when the industry render products and services to the customers as per their preferences then the demand pattern of the industry moves upward.

    AC 1.3 Customer profiles and their differing expectations and requirements in respect of hospitality provision

    On the basis of customer expectation and requirements Hilton industry profile varies. So its the prime responsibility of the manager of Hilton industry to take into consideration preferences of the customers while delivering services and products to the customers. Customer profile and their differing expectation and requirements in Hilton industry is explained below:

    • Pricing consideration: The customer of Hilton industry does not take into consideration the cost and the charges they are charging, in-fact they takes into consideration the type of service the industry render to them. All this lead to increase in the price level of all the type of services Hilton industry render.
    • Meal experience: As in Hilton industry different customers are there who prefer health and quality services  as they are basically from sport steam and business men. So the industry high quality meal services as per the demand and preferences of the customers.
    • Expectation requirements: As the customer preferences and expectation keeps on changing on the basis of surrounding, culture, needs and taste. So the Hilton industry supply services to the customers keeping in mind their needs and demand. Thus, it helps in increasing the productivity and profitability ratio of Hilton industry.

    Overall it can be concluded that in order to increase the maximum profit of an organization, Hilton industry must make a proper analysis and research about the changes taking place in the customers profile, needs and preferences as well as about the changes taking place in the competitors strategies. Thus, it will help the company to attract large number of customers and to earn maximum growth in the market place .

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    AC 1.4 Factors affecting average spending power (ASP) in hospitality businesses.

    Spending power refer to the ability of the individual to spend money after paying of taxes. Thus,there are many factors which affect the average spending power of the customers in Hilton industry and some of the factors are explained below(Crookall 2014):

    • Status: This is the first most factor which affect the average spending power of customers in Hilton industry. Status of people differ like for middle class people Average spending power is not up to the level Hilton industry charges, As Hilton industry cost is high for the services they render to the customers.
    • Economic situation: Good spending power of the customer of Hilton company increases the average spending power to spend in Hilton organization so as to take and enjoy the services of the industry.
    • Size of income: If the come level of the customers of Hilton industry decreases then their average spending power for the industry also decreases. Whereas if the income level increases then average spending power will also increase.
    • Social and cultural influences: Some of the customers of Hilton organization like to spend during festivals, so during festival average spending power of the customers increases in order to spend in Hilton industry so as to get quality service from them

    AC 2.1 key stages in product and service development applied within a hospitality operation.

    In case of innovating new plan regarding development of new product and services then in that case there are certain stages which the Hilton organization follows and they are explained below(Walczak, 2016):

    • Idea generation: The manager of the Hilton company must first generate the ideas in order to launch new product in the market
    • Idea screening: During stage manger of Hilton organization must analyse and screen the ideas so as to select the best idea in order to result better output for an organization.
    • Testing and development of concept: In order to realize the ability and growth manager of Hilton company test the concept during the third stage of new product development process.
    • Business analysis: In order to analyse the average time in each stage the manger of the Hilton company uses metrics to monitor progress.
    • Product development: In this stage each department of Hilton company starts performing their operational activities in order to develop product like finance department render funds  so as to start production process and so on.
    • Commercialization: During this stage manager of Hilton company finally render products and services to the customers in order to earn maximum sales revenue for an organization.

    Overall it can be said that all the above steps are necessary to be followed in order to develop new product in the market so as to increase the productivity and profitability of an organization.

    AC 2.2 Features which contribute towards the customers’ perception of products and services.

    The final decision of purchase depend upon customer perception, so its the prime responsibility of the manger of Hilton company to analyse the changes that are taking place in the perception of customers regarding the products and services. Some of the features which makes a great contribution towards the customers perception of products and services are explained below(Eisenberg 2007):

    • Brand image of the products and services rendered by the Hilton organization creates the positive image in the perception of the customers.
    • Secondly good quality of and nutritious products render by Hilton organization also attract and influence large number of customers so as to take and enjoy the services of Hilton company.
    • Thirdly, Hilton industry render cost effective services to its customers  which helps in attracting more number of customers toward their industry and it holds positive perception towards the image of the industry in the mind of customers.

    In addition to this other important factors like style of services, availability of resources, standardization  and space utilisation of Hilton industry also plays a major role in generation perception of products and services in the mind of customers of organization.

    AC 2.3 Opportunities and constraints affecting product and/or service development within a hospitality environment.

    Opportunities refers to those situation which can helps in the overall  development of an organization, whereas constraints Are those which create hurdles in the path of achieving successful growth in the market. There are certain opportunities and threats which affects in the development of products and services within the Hilton industry and they are as follows(Enz, C.A. 2010):

    • Instead of rendering services only to couple, Hilton company can also enhance it revenue by rendering opportunities of services to families, friends and to each category of people.
    • By rendering healthy foods the Hilton company can attract many more new customers, this is also one of the opportunities to earn maximum profit.
    • One of the constraints for Hilton industry is that it doesn't render enough of accommodation facilities to their customers because of which customers prefer to visit the competitors of Hilton company who render enough of accommodation to their customers.

    Thus, over all it can be concluded that Hilton industry must make an analysis regarding  opportunities which can helps in development of the organization. In addition to this company should also analyze about the constraints that hinder the company so that they can be overcome on time. Thus, it will help in increasing the overall productivity of an organization.

    AC 2.4 Different merchandising opportunities for hospitality products and services.

    Merchandising refer to variety of products which are available in order to sale in the marketplace and the products are displayed in a manner so that the customers get influence with it to make purchase. There are different merchandising opportunities for Hilton industry products and services an some of them are explained below(Verma Ph D 2010):

    • Many traveller travel to different nations specially for resectional and commercial purpose which is also one of the merchandising opportunities for Hilton industry products and survives.
    • Secondly, good economics condition of the traveller country also helps in rendering merchandising opportunities for Hilton industry  products and services.
    • Hilton industry offer premium charge to its customers which is one of the merchandising opportunity for Hilton industry as the customer expect quality of service on the basis of purchasing power. Thus, it helps in attracting large number of customers toward their products and services and helps in increasing profit of an organization.

    TASK 2

    AC 3.1 Different methods of pricing

    If the Hilton company wants to increase the profitability ratio then its the responsibility of manager of Hilton company to attract more number of customers towards there products and services by setting affordable prices for their services. There are different methods of pricing which are explained below(Faisal, A., Albrecht  and Coetzee 2017):



    Method used or not


    Cost oriented pricing method


    Under this method price of the products and services is determined on the basis of the cost incurred during production process by adding small amount of percentage profit to it so as to determine selling price.

    Market oriented pricing method


    Under this method manager of research and development department of Hilton industry first make an analysis regarding pricing strategies adopted by other rivalry firm, so that accordingly to make up the pricing strategy so as to attract more new customers.

    AC 3.2 Factors which affect revenue generation and profitability in hospitality operations.

    Revenue generation and to earn profitability is the main aim of Hilton industry, there are different types of revenue generating elements like average spending power of customers, elasticity of demand, standardization and many more. Some of the factors affecting revenue generation and profitability in hospitality operation of Hilton industry are explained below(Kohila Ranjini  2015):

    Appraisal of revenue generation and profitability in Hilton industry



    Factors to be considered


    • Labour intensity
    • Amount of funds used by the industry.
    • Number of labour used.

    This industry is said to be labour intensive because the industry make more use of labour then capital.

    • Shelf life
    • Level of initiative taken by industry management
    • Customer satisfaction
    • Value of brand image
      Industry can achieve successful growth in the marketplace by rendering customer satisfaction. This can be done by offering quality product ans services to the customers. 
    • Demand elasticity
    • Price of products and service industry render.
    • Demand of goods and services.

    Demand pattern of Hilton industry is inelastic as changes the price of services rendered by industry does not affect much on the customers demand for their products and services.

    TASK 3

    AC 4.1 Range of performance measures and appraisal techniques to individual aspects of hospitality operations, the product and the whole operation.

    In order to evaluate the performance of individual the Hilton industry uses various number of appraisal techniques. And after analyzing various techniques the manager should evaluate the pros and cons of each techniques and accordingly should choose the best techniques. Some of the techniques of performance appraisal are explained as under(Lafay 2006:

    • Developing qualitative and quantitative data: In order to measure the performance level of an organization it is very essential for the Hilton industry to determine qualitative and quantitative data. Quantitative data include number of customers, pricing strategies of the rival industry. Whereas qualitative data  include customer reliability, service quality offered and many more.
    • Data analysis and evaluation:  This is also one of the best method used by the Hilton industry, through this method manager of the company makes an analysis about the performance by comparing the actual one with the standard performance.
    • Speed of delivery: It is one of the vital technique used by the manager of Hilton company, through this technique manage measure how fast the order of the customers are delivered. This is the best techniques as fast deliver create good perception in the minds of the customers about the company image.

    Thus, overall it can be concluded that the manager of the Hilton organization should make proper analysis of the performance measurement of an organization by measuring the standard with actual performance. Thus, it will helps in increasing the productivity and profitability ration of the Hilton company.

    AC 4.2 Usefulness and limitations of the various quantitative and qualitative appraisal techniques and their application to hospitality operations.

    In some cases qualitative and quantitative  appraisal techniques are basically run through sample data, Which in some cases doesn't prove to be true while measuring the performance. Like, quality of goods and services, attitudes of the workforce and many more aspects which are considered while quantitative appraisal is done.(Mbasera, M.2018) So the manager of Hiton company takes into consideration different techniques like questionnaire, interviews, by group meetings all this can be used when the population is large enough.  The main criticism of qualitative appraisal method is that outcome which comes from the analysis cannot be used for large number of population. For example; the products  rendered by Hilton company is delicious for majority of people, but it is not possible that for all the customers food taste is delicious so it can be that to some cases such techniques of performance appraisal is not useful.

    AC 4.3 Approaches to business analysis, evaluation and planning appropriate to hospitality operations, making proposals for action.

    Business analysis , business plan  and  business evaluation are need to be done by the manager of an Hilton company so as to accomplish organizational aims and objectives on specified time period. Business plan refers to a state of document which gives the brief about how the business concern usually the new business will achieve its goals and objectives. Business analysis refer to the research discipline which helps in determining the needs and solution to business problems. (Roy and Pyne 2011)Whereas business evaluation is define as analysis and review of whole business so as to measure the productivity and profitability ratio of the businesses. While applying different types of approaches to the Hilton industry it is difficult to consider the approach for the different operational activity such as services rendered, catering services, accommodation services rendered . For example, earlier in Hilton industry customers were use to be treated by rendering only lodging facilities to them. However, in later, the facilities rendered by Hilton were increased by adding some value added services like more of accommodation facilities to the customers. Thus all this approaches to business analysis , evaluation and planning are appropriate for Hilton industry in order to generate and increase the sales revenue.

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     From the above assignment it can be concluded that demand and preferences of the customers in Hilton industry affect various factors like on quality ODF services rendered to the customers. The manager of the company should set right and affordable price for the products and services they are rendering so as to attract and influence large number of customers toward their services. In addition to this manager should also make an research analysis regarding the changes taking place in the taste and preferences of the customers so as to make strategies and policies accordingly. Thus, it will helps in increasing productivity and profitability ratio of an organization

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