Hilton Hotels Business Strategy and Competitive Advantage

By John Dudovskiy
August 25, 2016

Service differentiation can be specified as the cornerstone of Hilton Hotels business strategy. Specifically, the company differentiates its services on the basis of quality, maintaining the highest level of standards and integrating IT systems into various aspects of service provision.

Digital hospitality is one of the main sources of Hilton Hotels competitive advantage. As it is illustrated in Figure 1 below, the company’s digitalization efforts relate to booking channels, mobile services, loyalty and data driven-personalization, guest experience and privacy. Moreover, effective integration of these digitalization points creates additional synergetic impact for the business.

Hilton Hotels business strategy Hilton Hotels competitive advantage

Hilton Hotels and Resorts digital experience strategies capabilities[1]

Hilton’s business strategy also relies on an extensive international expansion and the Hilton Worldwide added more than 100,000 rooms to its portfolio in 2015 alone, including 14,500 rooms converted from competitors’ brands and independent hotels.[2]

It has to be noted that Hilton’s business strategy of an aggressive international business strategy and service differentiation with the focus on quality has resulted in the accumulation of USD10.5 billion debt, including USD726 million of non-recourse debt by the end of 2015.[3] This is because in order to sustain its business strategy, Hilton has to commit to substantial financial investments in a regular manner, despite the volatility of revenues caused by seasonal and cyclical nature of the business and a range of other factors.

Hilton Hotels and Resorts may find it challenging to sustain its competitive advantages in short-term and long-term perspectives, since it can be copied by existing or new market players to threaten Hilton’s market share.

Hilton Worldwide Holdings Inc. Report contains more detailed discussion of Hilton Hotels business strategy. The report also illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on Hilton. Moreover, the report contains analyses of Hilton leadership and organizational structure and marketing strategy and discusses the issues of corporate social responsibility.

Hilton Worldwide Report

[1]Skilton M. (2016) “Buildign the Digital Enterprise: A Guide to Constructing Monetization Models Using Digital Technologies” John Wiley & Sons

[2]Annual Report (2015) Hilton Worldwide

[3]Annual Report (2015) Hilton Worldwide

Category: Strategy