Hilton Hotel Case Study

956 Words4 Pages
The question that needs to be addressed is quite simple. Hilton considers their greatest asset is their frequent guest program. What happens when another company ups the stakes? Jeff Diskin, head of Hilton HHonors, needs to determine if competing with Starwood Hotels and Resorts Worldwide Inc. is the best option? Starwood has implemented a program to increase its customer base within the hotel service industry. This step would not only increase the benefits for customers but also increase the expenses incurred by Starwood. Hilton Group has to analyze the situation and act in an appropriate manner by introducing the same kind of loyalty program, competing point for point or by choosing a different tactic as compared to Starwood, which would let Hilton stay diverse. Problem Statement The primary objective of this case is to determine how the Hilton Group of Hotels and Resorts will respond to the presence of Starwood Hotels and Resorts Worldwide or differentiate its current loyalty program and establish a compelling brand strategy within the Hilton name. • Will a loyalty program help with better customer management? Loyalty programs can help retain customers, increase activity and boost deal percentages. • The value of Hilton HHonors program? Will the value of the program compare to its overall cost. • If you, as a business owner, had the choice of putting the Hilton brand or one of the Starwood brands onto your property, how would you assess the value of doing so? Look at frequent stay programs utilized under both brands. Hilton and Starwood are measured by comparing quality stays, good customer service and similar amenities. • How would you recommend Hilton HHonors spend the surplus reve... ... middle of paper ... ... Appendix Break-even Point Break-even Rate 68% Number of Rooms 154001 Number days in year 365 Breakeven nights (rate*#rooms*days) 38,223,048 Price per room 158 Industry Norms 750 Breakeven point = rate* # rooms * days*price $6,039,241,616 Nights Paid Nights which members paid 7015000 Stayed longer (712000 * 2.4 nights) 1708800 Rewards claimed by members -180000 Total nights stayed 8,543,800.00 Revenues Earned from Members Spending on which earned points 1,108,000,000 Spending on stays 327,000,000 Total 1,435,000,000 % Nights stayed over Break-even (Nights stayed / Breakeven Nights) 0.223524821 22.35% % Revenues (Revenues by members / Revenues Breakeven) 23.76% Profit ($158 Per Room - $750 Industry norm per year) * number of nights $1,332,364,646.58
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