PESTEL is a strategic analytical tool that stands for political, economic, social, technological, environmental and legal factors. Hilton Hotels PESTEL analysis involves the analysis of potential effect of these factors on Hilton’s revenues and its long-term growth prospects. The following is a brief Hilton PESTEL analysis for the UK market in particular.
Political stability is a basic requirement to success regardless of the industry. In hotel industry in particular, political factors can influence the number visitors, both, tourists and business travellers’ visits to a country in direct and indirect ways. For example, an ongoing delicate political situation Northern Ireland may discourage potential visitors to the region due to safety concerns.
Moreover, following acts of terrorism in London on July 7, 2005, UK was temporarily branded as a place that accommodated a set of extremist religious organizations. Risks or threats of acts of terrorism are most likely to reduce the numbers of visitors to London and UK with negative impacts on Hilton performance in this particular market.
Hilton Worldwide actively engages in lobbying in order to be able to influence certain political factors upon the business to a certain extent. As it is illustrated in the figure below, the company has been spending more than USD 1.5 million during the past four years for lobbying purposes.
Annual lobbying budget of Hilton Worldwide
National and international macroeconomic situation and factors and events impacting the situation are major factors affecting Hilton Hotels & Resorts business. For example, during the Olympic times in the UK in 2012 most of the hotels were occupied and booked fully for the whole period. However, the situation was completely different once the Olympic Games were over.
Moreover, as a direct result of the global economic and financial crisis of 2007 – 2009, same hotel sales went down by 20 percent and profits by 40 percent by the fourth quarter of 2008.Although more than five years have passed since the global financial and economic crisis of 2007 – 2009, national economy in UK is faced with a set of significant challenges and a risk of another economic crisis may not be too distant. Additionally, GBP exchange rate against other major currencies and inflation rate in the UK represent significant factors that can impact Hilton performance in the country.
Hilton Worldwide Holdings Inc. Report contains the full discussion of Hilton Hotels PESTEL analysis. The report also illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on Hilton. Moreover, the report contains analysis of Hilton’s marketing strategy, its leadership and organizational structure and discusses the issues of corporate social responsibility.
Hilton Worldwide (2016) Open Secrets, Available at: https://www.opensecrets.org/lobby/firmsum.php?id=D000000503&year=2014
Heath, T. (2014) “Christopher Nassetta: The man who turned around Hilton” The Washington Post, Available at: https://www.washingtonpost.com/business/capitalbusiness/christopher-nassetta-the-man-who-turned-around-hilton/2014/07/03/43071478-fd5a-11e3-932c-0a55b81f48ce_story.html