The Hilton Hotels Corp. Its success and marketing solutions for it
An essence of marketing in the industry of hospitality. The role, place of hospitality in the sphere of services. The modern tendencies of development of the world industry of hospitality. The marketing concept, franchising, development of a new product.
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THE HILTON HOTELS CORP.
ITS SUCCESS AND MARKETING SOLUTIONS FOR IT
- An essence of marketing in the industry of hospitality
- The role and place of hospitality in the sphere of services
- The modern tendencies of development of the world industry of hospitality
- Database and data analysis
- The marketing concept
- Physical evidence
- Development of a new product
- Marketing solutions in virtual space
- According to the World Tourist Organization (WTO)there are for about 16 million hotels in the world, and 20 % of them are members of the hotel networks. A network, as a foreign practice shows, is the most effective way of managing in hotel business.
- Using the results of its researches, Russian Inform Agency RosBusinessConsulting made «the top-300 of the world hotel networks». On the sixth place in it there is Hilton Hotels Corp. - a network, to which my work will be devoted.
- To make the research of the hotel industry I decided because my future profession will be connected to this area and the given subject is most interesting to me. Today the industry of tourism is one of the most developing fields, involving to itself a lot of attention from researchers and also a big amount of investments from businessmen.
- I decided pay my attention to Hilton Hotels Corp., firstly because this chain is one of the first in the world industry of hospitality, therefore a lot of its successful marketing inventions will subsequently be used by many other companies. Secondly, for today it includes 2 173 hotels with the total of number of rooms 348 483 in 80 countries of the world, and everything began with the small hotel in a provincial small town in Texas. And it was interesting to me, how this company involved in itself such amount of clients (by he way many of them are constant) and began to be considered as one of the best international networks of the first-class.
- Thus, my work will be devoted to the research of marketing methods of Hilton Hotels Corp., many of which were invented in the beginning and the middle of the 20 century when the theory of hotel business did not exist yet. Also I will compare these methods to the theoretical ones which exist for today.
- The industry of hospitality is one of the largest quickly developing branches of economics. Mainly it happens due to the social, economic and political progress - for the last few years tourism became accessible to wide amount of people. At the same time with the growth of the general number of tourists the industry of tourism and its basic component - hotel sector - started to develop. For many centuries hotel business existed in different models: from family ownership to the participation in the international hotel networks. An example of the most productive ownership in tourism is a creation of the hotel corporations.
- The given system of managing promotes creation of a lot of advantages which allow the tourist enterprises to raise a quality of tourist's product in the, to diversify the offered services within the segment of the market and to increase an individualization of service of consumers.
- An integration of hotels in chains with an establishment of the united standards of service and centralized offering of some services by hotel, including booking places, material equipment, safety and so on, reduces the costs for management and raise the profitability of the hotel enterprises.
- A management of hotel, work with people, technologies of booking, reservation, a professional training for administration and many other things are the integral part of hotel business all over the world. In our country because of the lack of good hotels of the European level this business is not so developed. The main players in the market of Russia are also the large western administrative companies in the sphere of hospitality.
- Today Hilton Hotels Corp. starts to enter on the Russian market, going to open 25 new hotels. “Leningradskaya” in Moscow will become the first Russian Hilton hotel. Its owners have already signed the contract on purchasing of the Hilton franchise for this hotel.
- But on the international scene this hotel chain exists since 1925 and it is considered to be one of the best networks of the first class. At the same time it is also popular among middle class, following its motto: «a guarantee of elite luxury with the accessible service of high standard quality».
- A network Hilton Hotels Corp. created a big number of new marketing decisions for attraction the greater amount of visitors. For example, exactly the chain Hilton was the first who began to use the marketing conception for managing hotels that is the standard today.
- Also many clients choose Hilton for practical realization by the company of one of the concepts «seven P's»: physical evidence.
- The working out of a new product is a risky step for many companies, but Hilton Hotels Corp. succeeded in it too. For today Hilton is known as one of the leaders not only in the hotel business, but also in the gambling industry.
- Another important decision (first of all for the clients) was an integration of Hilton in the virtual space. The clients of Hilton Hotels Corp. became the first who had an opportunity of receiving the information about all hotels of the chain, booking places in hotels and air tickets through the international databases in the internet.
- Thus, in the project work I will look at the most important sides of marketing policy of Hilton Hotels Corp. without which this hotel chain would never get today's popularity and trust among the clients.
An essence of marketing in the industry of hospitality
Marketing of services is a process of development, promotion and realization of the services, focused on revealing and satisfaction of specific needs of clients. The main task of marketing of services is to help the client to estimate the enterprises and its services.
Considering marketing as the basic market concept of management in tourism and hospitality, it is necessary to note that tourism in its basic characteristics has no big differences from the other branches of sphere of services, therefore all basic things of the modern marketing of services can be used in tourism and hospitality.
At the same time in tourism there is its own specificity that differs it from the other forms of production and trade of services. A realization both of services and goods (according to experts, the share of services in tourism makes 75 %, and of goods - 25 %), and a special character of consumption of tourist services and goods in a place of their manufacture (mostly in the certain situation) takes place in this sphere.
In world tourism the result of activity is an offer of a tourist product. Actually we can say that the tourist product is the final service, satisfying one or other needs of tourists and has to be paid from their side.
Alongside with general characteristics of services the tourist product has its distinctive features.
Firstly, the demand for tourist services is extremely elastic with respect to the level of income and prices, but in many cases it depends also on the political and social conditions.
Secondly, in connection with seasonal fluctuations of demand there is a so-called phenomenon of saturation. As a result it is possible to allocate well defined tourist zones. For example, using the factor "sun - sea" - resorts of Cyprus, Spain, Bulgaria and so on.
Thirdly, the supply of tourist services differs nonflexible manufacture. They can be consumed only directly in a place of their manufacture. The hotel or the airport can not be transferred at the end of a season in the other region. They can not fully adapt in time and in space to the change of demand.
Fourthly, the tourist product is created by efforts of many enterprises, and each of them has their own methods of work, specific requirements and various commercial goals.
Fifthly, a high quality of tourist product can not be achieved if there are even insignificant weaknesses because a service of tourists consists of these small details.
These specific features of a tourist product render an essential influence on marketing in tourism. Today there is no single definition of tourist marketing. If to look at the definition of concept the tourist given by the World Tourist Organization, French experts R.Lankar and R.Oll'e say that tourist marketing is a series of the basic methods produced for the research, analysis and solving of existing problems. The main things on what these methods should be directed:
- the revealing of opportunities of the most full satisfaction of requirements of people from the point of view of the psychological and social factors
- a definition of ways of the most rational management in the tourist organizations (the enterprises, bureau or associations) from the financial point of view, allowing to take into account the revealed or latent needs in tourist services.
Such requirements can be defined by various motives: rest, entertainments, improvement, training, pilgrimage to religious relics, sports - or by other motives which enterprise groups, families, various missions and the unions often has.
Some authors put more global contents in the concept of tourist marketing as, for example, it takes place at Swiss expert E.Krippendorfa: «Tourist marketing is a regular change and coordination of activity of the tourist enterprises, and also private and a state policy in the field of the tourism, realized on the regional, national and international plans. The purpose of such changes is to satisfy needs of the certain groups of consumers, taking into account the opportunities of having the appropriate profit».
Tourism according to the definition of WTO is not only economic but at the same time a social, cultural, ecological and political phenomenon. According to this, tourist marketing is necessary to use with taking into account all listed factors then it will reflect in the greater degree the interests of the tourist organizations and consumers - tourists too.
The role and place of hospitality in the sphere of services
“The hospitality is kindliness in the reception and entertainment of visitors, gratuitous reception and an entertainment of wanderers”. It is an explanation of V.I.Dal' in his «explanatory dictionary of alive Russian language». To be hospitable means to be able to offer warm reception for visitors, to create for them a quiet, favorable and friendly atmosphere.
A term "industry" comes from Latin “industria” that means «activity». In the Russian Federation: it is a set of hotels and other means of accommodation, transport, objects of public catering, objects and means of entertainment, objects of cognitive, business, improving, sports organizations that are doing out tour-operating and tour-agency activity, and also the organizations giving excursion services and the services of guides-interpreter»
Hospitality is one of the fundamental concepts of a human civilization and now under an influence of scientific and technical progress became the powerful industry in which millions professionals work, creating a cosiness and comfort for people.
The industry of hospitality is difficult, complex sphere of professional work of people which efforts are directed on the satisfaction of various needs of clients (visitors) both tourists and residents.
Today an interest in the development of the industry of hospitality grows as on international but also on national and regional levels since it is the catalyst of development of many sectors of economy.
Thus, the industry of tourism and hospitality is one of the major parts of the extensive market of services and represents the fast-growing and highly profitable industry capable directly and indirectly to influence on the forming of conditions of steady social-economic growth of world and national economy.
The modern tendencies of development of the world industry of hospitality
A development of tourism substantially affected on the development of the industry of hospitality. The basic tendencies in this area are:
1. Distribution of sphere of interests of hotel business on the products and services earlier given by the enterprises of other branches (for example, catering services, leisure, entertainment, exhibition activity…). A development of such segments of industry of hospitality as an industry of entertainment including a gambling industry, congress activity, transformed earlier poorly attractive resort and tourist districts into the fashionable tourist directions. For example, such large corporations as Hilton, have essentially expanded their activity due to rendering various kinds of services: catering, services of communication, leisure, transport…
2. Growing democratization of the hotel industry which helps increasing of availability of hotel services for the mass customer. If earlier the distinctions between hotels of a different class were essential then now the level “of the lowest standard” considerably raised: even rather cheap hotels provide a qualitative service and the minimal number of conveniences.
3. A growing of specialization of the hotel business allows orienting on the certain segments of consumers in view of various attributes. So, according to the price level there are three segments: lowest (budgetary), average (economic) and supreme (first-class). Besides, the segmentation is made by the purposes of trip, age, sort of labor activity and so on.
4. A development of new kinds of tourism. For example, ecological tourism stimulates the construction of hotels in non-polluting regions, the formation of "green" floors and numbers in usual city hotels. The creation of these numbers apply non-polluting materials, paying special attention on economy of natural resources and the minimal intrusion into the natural environment.
5. Globalization and concentration of hotel business. This tendency is shown in the creation of large corporations and hotel networks, such as Hilton. It allows the hotel enterprises to rearrange and involve additional resources for development of their business. They are made through the creation of the unions or the associations which are not breaking a legal and economic independence, but that allows having common marketing programs, forming united system of preparation and retraining of personnel.
6. A deep personification of service and a full concentration on the demands and needs of clients. In expensive hotels for these purposes the cards of constant clients are created. In them there is information about their tastes, preferences and habits. Such database allows foreseeing the desires of visitors. For the solving of these problems the special services are created in hotels.
7. Wide inculcation of means of communication and information technologies, allowing making deep economic diagnostic. The results of this diagnostic give the opportunities to make the analysis of competitors in the field of used price and marketing strategy, to analyze a degree of activity in the market, to reveal the profitability of the developing segments, to coordinate the supply and demand of the hotel services. As a result it helps to solve the problems of capacity of the hotel enterprises.
8. An inculcation of new technologies into the business strategy of the hotel enterprises, in particular: a wide use of the Internet with the purpose of promotion of the hotel products and services. It reduces costs and provides to consumers an increased comfort. These technologies expand the opportunities on attraction of the new clients and the segments of the market occupied by the companies.
Large hotels offer their clients to make excursions in the hotels not leaving the house. The visitors of sites can see the internal interiors of hotels, the menu of restaurants and bars, to receive the various help information.
Thus, the listed main modern tendencies of development of the industry of hospitality are directed as a result on the solving of the primary tasks:
- search of the own competitive advantages
- creation of the stable clientele through the skill of finding of the own client
- search and creation of the new ways of development, constant updating of the own policy looking at the dynamically developing market of the hotel services.
This years the hotel market is characterized by the growth of the supply (with the reduction of demand at the same time) for services of accommodation. Such situation leads to the growing of competition, that even without it did not give the owners of hotels to steep quietly during the last quarter of the twentieth century. One of the main directions of forming of strategic competitive advantages in hotel business is a giving of more high quality services in comparison with the competing analogues.
The most important thing here is a having of such services that would satisfy and even surpass the expectations of clients. These expectations are formed on the basis of experience that they have already had, and also on the information received on the straight (personal) or mass (impersonal) channels of marketing communication. Proceeding from this, the consumers choose the manufacturer of services and after using this services compare the representation about the received service with the expectations. If the representation of the given service does not correspond to expectations, the clients lose any interest to this firm and if it corresponds or surpass they can come to this manufacture again.
The buyer always tries to find the correspondence of the price of service to its qualities. It is interesting to notice, that, as a rule, the buyer of service complains of its high price less often than the buyer of the physical goods. If the customer thinks that the price is too high he or she will simply leave the place without any purchase. The dissatisfaction with service conducts, as a rule, to the big losses in the share of market. For this reason the manufacturer of services should reveal the needs and expectations of his clients as more exactly as he can.
marketing hospitality franchising industry
Hilton Maldives resort and Spa Rangali Island 5*: «From the first minutes of our arrival it became clear, that this hotel is special and the personnel treat visitors with special attention. Such responses can be met about many hotels of the Hilton chain. This hotel empire is famous for the high level of service and on 100% follows the motto which was put forward even by its founder Konrad Hilton: «A guarantee of elite luxury with the accessible service of high standard quality».
For today practically there are no people who have never heard about this mighty chain that speaks for itself. But what became the reasons of such popularity? How the company won the place of one of the leaders of the hotel industry? Successful marketing solutions and innovations which helped Konrad Hilton his followers to achieve such high results will me examined below: for today in the property and under the control of this corporation there are more than 2.5 thousand hotels, clubs and the centers of rest on the territory of 75 countries of five continents and about 2 thousand gambling institutions and bookmaker's firms.
Database and data analysis
As I said in the beginning Russian Inform Agency RosBusinessConsulting made several researches of the international tourist's market and formed several ratings. The Hilton Corporation in on the:
1. 6-th place in “the top-300 of the world hotel chains”
2. 10-th place in the rating of the most popular hotels in winter 2006/2007 (Hilton long beach 4*)
3. 11-th place among the most popular hotels of Egypt (Hilton long beach 4*)
4. 16-th place in the rating of the most popular hotels of UAE (Hilton Dubai Jumeirah 5*)
For today in the world there are thousands of hotels and, not looking at it, Hilton stably keeps in the top-twenty (and somewhere in top-ten). It speaks about the high level of service and about satisfaction of clients.
These statistical data were made by professional agency, but I also made my own interrogation and here are the results.
I interrogated 20 people in the age of 18-25 - all of them several times were abroad and stopped in different hotels, therefore they already have their own opinion on the questions about hospitality.
Firstly it was interesting to me, which hotel chain, in their opinion, for today is the most famous. They made this conclusion on the knowledge of hotels from advertising and responses. There were no variants of answers therefore the truthfulness of the received results is high - people really named the most known for them. The answers were allocated in such way:
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On these results we can see that Hilton and Marriott are known to the greater number - to 5 people each. Of course all 4 chains occupy conducting places in ratings of different companies, well-known and important people stop in all of them. But among interrogated there were people of middle class, therefore, they estimated popularity of hotels also among the usual population. As it will said below, the company Hilton offers the services to the wide audience of consumers and a lot of people have enough money to stay in its hotels. And at the same time these not very high prices do not lead to the bad quality of services. We can understand it from the answers of interrogated people and also from numerous responses of clients of the company.
Secondly I think that it was necessary to find out by what people are guided at the choice of this or that hotel. Here are the results:
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Here it is clearly visible, on what respondents pay attention in the choice of the hotel - the most significant parameters are quality of services and the price, as it was expected. Despite of huge amount of possible ratings, only 1 person from 20 interrogated pays attention to them. Other rather important parameters have approximately identical weight in the eyes of asked people. The reasons of popularity and respect of the company Hilton are connected with that it pays a lot of attention to the ratio price - quality. And, following the motto “A guarantee of elite luxury with the accessible service of high standard quality”, this hotel chain establishes rather acceptable prices for the high level of quality and it involves clients.
And the third question: “When you choose a hotel do you look at its fame?” 12 people from 20 answered positively. Here the important role is not only in advertising, but also in the responses of friends, family and others. People best of all will go there, about what they have already heard (even from advertising or tour-agents). As Kotler said: “If the person received negative impressions, he will inform 10 people, and if positive - five”. Therefore the positive reputation of the hotel and its popularity are earned for a long time and people pay attention to it.
The marketing concept
The Marketing method is the market point of view on the business, based on the priority of the customer as the main agent of market relations; on interests; on which demands the marketing activity should be guided. The concept is shown in aspiration for satisfaction of needs of clients by selling goods necessary to them, ensuring of their manufacture, delivery and use (modern economic dictionary).
As Philip Kotler define this: the Company coordinates all kinds of activity which are connected with satisfaction of needs of the consumers, and, constantly satisfying these needs, receives profit.
This conception appeared not long ago, and in the beginning of 20 centuries about satisfaction of needs of the consumer, but not of the firm, practically nobody thought - except Konrad Hilton.
In fact he made it a reality in his first hotel, not looking at any theoretical knowledge but operating only due to intuition.
The first that he made in Mobley is increasing of number of rooms to liquidate a big crowd of people who were waiting for the room for night. He noticed that in the hotel there are a lot of not involved space, for example, the restaurant was too big but there even at the hottest hours gathered no more than twenty five person, but it could house more than fifty. Hilton reduced a restaurant hall twice and it helped to increase the number of rooms in the hotel. Later it became Hilton's strategy: using “non-working” space not bringing money. Then he realized that he had to amuse his visitors or just to give them some necessary things, and with benefit for himself. For this purpose he placed around the columns in a lobby some glass show-windows in which he started to sell some small and not expensive but useful things - from newspapers and magazines up to cloth brushes and a tooth-paste. Later Hilton said that each column gave him 8000 $.
Mobley became the first hotel in the history of empire and also one of the most popular on that moment in that area. Since anybody before did not use the marketing concept, then when Hilton already received profit from it, his competitors only started to reconstruct the politics in this direction.
For today in each hotel of the world, small or big, necessarily there is something similar to this. Some of them have separate shops, in others - you can buy everything directly on the reception. That fact, that the idea of use of non-working space for today is used everywhere, speaks about a successful marketing solution of the Hilton Corp.
An orientation on the needs of clients became a marketing innovation which now is almost the most important in the theory of successful hotel business.
Physical evidence is an element of expanded marketing-mix or one of the seven Ps. It is environment in which a rendering of service takes place and it is also any tangible objects used during the service or giving to the consumer the certain information.
It is interesting from the architectural or historical point of view building of the hotel enterprises, the modern park or landscape design, attractive interiors, cleanliness rooms, speed and quality of service, polite attitude to visitors etc. Also the hotel has in its arsenal various ways of rendering of services.
Konrad Hilton was the first who paid attention on the thing that not only holiday-makers and tourists stop in hotels but also representatives of the business world for whom hotels temporarily become both the house, and office. Today, as well as then, there are all services necessary for them:
Name of the hotel
Services for businessmen
Hilton Arc de Triomphe ****
Cable/satellite TV, modem socket, business center, conference hall for 1700 sq .m., a ballroom for 648 sq. m. house up to 795 participants, access in Internet
Hilton Cannes (Noga Hilton)
Sound isolation, color TV with connection with Internet, hot line, socket for modem, phone in the bathroom, completely equipped banquet and conference halls with the maximal capacity of 1200 person
Hilton Docklands ****
Conference hall, microphone, projector, big screen, satellite TV, radio, hot line, voltage 220V, port for the computer
Hilton Hotel Slussen
It is considered to be the best business-hotel: 289 rooms of a various class with all modern requirements , TV, radio, phone, conference halls with all modern requirements
Le Palace Hilton Geneva
Congress-centre for 1600 people, conference halls (completely equipped), round-the-clock fax, mail and telegraph, secretarial service, translator, TV, phone, radio, safe, Internet
After the arrival of the businessman he will find in his room the comfortable desk, fax, two or three lines of the phone and the appropriate illumination.
For people who are going to use their rooms only for rest there will be prepared soft modular furniture on rollers that the visitors can place at their desire.
Name of the hotel
Services for businessmen
Hilton Arc de Triomphe
Bar, restaurant, fitness-club, jacuzzi, sauna, Spa, garden, breakfast in rooms, rooms for non-smokers, rooms with terraces / balconies, mini-bar, conditioner, you can take pets
Hilton Cannes (Noga Hilton)
In each number there is a balcony with a view on sandy beaches or garden, mini-bar, 2 restaurants, 2 bars, cafe, sauna, jacuzzi, sun deck, steam room, a private beach, gallery of shops
Hilton Docklands ****
Bar, 2 restaurants, cafe, fitness-centre, sanitary centre, beauty salon, pool, sauna, sun deck, jacuzzi
Hilton Hotel Slussen
Restaurants and bars with excellent panoramic views, wine cellar, souvenir shop, fitness-centre, sauna with pool, massage study, beauty salon
Le palace Hilton Geneva
Bar, 3 restaurants, covered pool, fitness-centre, beauty salon, sauna, sun deck, Turkish bath, massage, rooms for non-smokers, TV, mini-bar, radio
For today all this services are habitual to us but also in the beginning of 20 centuries the clients in hotels Hilton could find all modern offers. So even before the appearance of the theory, the management of hotels already had a correct and successful politics.
The form of union in hotel and restaurant chains is the system of contract relations or “franchising”. The essence of it is that the large firm enters into the contract agreement with already working independently small enterprises. Franchiser (a firm that gives a franchise) is capable to achieve deeper penetration on the market with the minimal investments than if the corporation started to build up new hotel from nothing.
An influence of hotel chains on the industry of tourism is really great. If any idea proved the viability in one hotel from the chain, it is recommended for using in franchisees-hotels.
For today practically all large hotels are included into any hotel chain, by what they involve more clients. The belonging to one of the international empires symbolizes high quality of service and also a familiar service if the client was in the hotel of the same chain but in other country.
Again, Konrad Hilton was the first who understood this and made the reality.
While traditional hotels were loosing money in unequal struggle against motels, he opened a new profitable direction in business and offered customers high-quality standardized service irrespective of in what country of the world they stopped. Expectations of clients did not fail - the hotel “Hilton” in Paris nothing differed from the same in Miami or in any other city in the world. It was supposed that in large cities there are such hotels, «where you feel yourself as yourself». On the billboards it was represented by a taxi with an inscription «In «Hilton! ».
The clones of the hotel opened everywhere and constantly. In all hotels client met a standardized set of services. Hilton made a decision to build one hotel per one year, but soon he exceeded his own plan. Later the given idea resulted an application and distribution of the system of franchising in what Hilton's company again became the first for what in 1965 a subsidiary firm Hilton Inns was created. With time this system was adopted by all its competitors.
Using such politics it is absolutely natural that the visitors choosing for rest or work their hotels will appear in this company. The system of encouragement of constant clients - a bonus program Hilton Honors - now is the most developed and branched in the sphere of the hotel business.
Development of a new product
The company should be able to develop new products. It also should be able to operate them in the time of varying tastes, technology and competition. All companies of the industry of tourism should watch closely the tendencies of market development and be ready to enter on the market the new products.
One of ways of development of a new product is its purchase from the side, i.e. purchase of the whole company, the patent or the license for manufacture of a product of any other company. For this purpose it is simply enough to look at the growth of some new chain: at its clientele, volumes of selling of each branch and is it simple or difficult to open new branches. If the large company is convinced that the new chain succeeds and corresponds to the general strategy of their organization, they buy it. This method of development appreciably reduces the risks of the large companies which have means for purchase and further development of the chain. Using this way Ladbrokes Group bought Hilton International. And about it I will now speak.
Konrad Hilton was the first in hotel business who understood that the rich client with pleasure would save some money for the hotel room and with the same pleasure would throw out much more money in casino at the same hotel. Active integration of hotel business in the gambling industry was the most unexpected innovation of Hilton which has caused a lot of disputes. But it did not stopped him.
This alliance started at the end of the 60-th years when in the gambling capital of America, Las Vegas, two unusual hotels - Las Vegas Hilton and Flamingo Hilton - were constructed. In contrast to all others constructed earlier, their singularity consisted in that they were gambling institutions at the same time. Before this hotels and casinos in Las Vegas were built separately to each other. And only Konrad Hilton decided to unite living in “the city-roulette” with the main local pastime - gambling. It assumed additional system of service and various bonuses for clients like free-of-charge gambling chips to each new consumer for the certain sum and also an availability of restaurants and bars directly in gambling halls.
This innovation became so successful that in 1987 as a result of a series of bargains and complex reorganization the company Hilton International became a part of just formed British industrial group Ladbroke Group (after changed its name on Hilton Group), whose basic direction of activity were various casinos, bookmaker's firms, lotteries and totes.
A unification of Hilton International with Ladbroke caused anxiety because of the fear of “the conflict of interests” as a result of which the perspectives of gambling superprofits could remove Hilton's attention to development of hotel services on the second and third plan.
However these fears did not prove to be true. And in the end of forming Hilton Group in its present kind its direction in last years of the left century not only returned to the Hilton's international hotel business its historical name, but also reunited divided by Atlantic ocean and enterprise separatism of the “post-Konrad” period British (Hilton International) and North American (Hilton Hotels Corporation) parts of empire. The questions of owning, management and service development of hotels, clubs, resorts, entertaining and business centers were saved at the level of key aspects of the activity. The powerful illustration of adherence to principles of this strategic course became an expansion operation of Hilton International in the world market during 1.5 - 2 years as a results of which the famous chains of the companies Stakis Rlc and Scandic Hotels AB became the parts of the Hilton's hotel chain. At the same time Ladbrokes Worldwide extended due to the purchase of the firm Vernon with about more than 70-years experience of realization of bookmaker's operations, became one of the largest structures of the gambling industry and stayed on the position equal in rights but not the main division of Hilton Group.
Nevertheless, Ladbrokes helped Hilton during the deepest global economic crisis in the beginning of XXI century. The first crisis wave the group of Hilton overcame practically without damage to itself, but since the IV quarter 2001 and almost up to the end of 2003 international incidents affected really badly on the hotel alliance. A threat of acts of terrorism and mass epidemics forced many people to refuse from any travels, seriously reduced the quantity of business and entertaining trips therefore essential losses were incurred not only by transport companies engaged in transportation of citizens from place to place, but also the owners of hotels in which these citizens stop for work and rest. For Hilton Hotels Corporation and Hilton International 2002 year for turned back with the strongly financial difficulties the first time for a long time and the following year brought losses: the profitableness of Hilton hotels for 12 months decreased on 65.6 million pounds sterling. But on the human passion all these political, economic and natural cataclysms did not influence negatively, even on the contrary: in extremely complicated economic conditions the aspiration of the population to earn money with the help of Fate appreciably increased, due to what not living in misery gaming became more profitable. And Betting Division appeared on the first positions in this rise - gambling-bookmaker's department of Hilton Group in the structure of Ladbrokes and Vernon with their wide chain of the totes, lotteries and virtual casinos. The effect from the activity of Ladbrokes Worldwide was so great, that allowed an alliance not only to cover losses of the hotel complex but also to increase total profit in comparison with 2002 in one million pounds, and total amount of sales to grow on unknown before height - 14,173 billion (+39%).
Now on the territory of the Great Britain, Ireland, the Benelux countries, and almost all Western Europe it is difficult to find large settlement in which office of Ladbrokes would not settle down. In last summer the company opened new office for taking stakes in the centre of London - near the Trafalgar square, equipped it with all possible interactive means and also plasma screens for watching the translations from hippodromes and sports arenas. People from Hilton Group say that already earned lot of money only on sale of coffee to inhabitants of the British capital and tourists visiting this gambling institution. And in the near future Hilton International and Ladbrokes are going to organize 40 cyber-cafes under cover of “Cafe Cino” where drinking coffee it will be possible to play on the totalozator or in an electronic casino.
In the area of electronization of its business the firm Ladbrokes today is considered the most developed in Europe and one of the most developed in the world. Three years back the company started to use the unique system Total Betting Service allowing its clients to operate by various gambling manipulations, to gamble and to receive prizes through the centralized personal accounts from any point of access to united network Ladbrokes Worldwide usung the specialized terminals, Internet, telephone lines, interactive TV etc. With the growth of popularity of computer gamblings the user audience of the system eGaming (which besides totalizators and lotteries, offers fans of the on-line sensations participation in network gamblings and a web-roulette) continuously extends. Three largest gambling portals of the company - Ladbrokes.com, Ladbrokescasino.com and Ladbrokespoker.com - serve on the present moment for about 600 thousand registered clients from 160 countries, providing realization of operations in 13 languages and with 17 various currencies.
“Besides exclusive technological equipment Ladbrokes achieved for today the highest level of management, marketing and development of the services - said executive director of Hilton Group David Michaels. - And those tendencies, which now exist in the environment of the British legislators finishing work on “the bill about a gaming” (“Gambling Bill”), rather positively allow us to estimate perspectives of this field of activity of the group”. Mr. Michaels does not hide that Hilton's direction lobby actively the promotion in parliament of the most favorable variants of this law, providing, in particular, a reduction of the rate of the taxation of gambling operations and stopping of restrictions on the functioning of electronic bookmaker's terminals (Fixed Odds Betting Terminals, FOBTs). “Now we develop the temps of opening of new terminals using already available and again created segments of our electronic network, - the managing director of the company Ladbrokes John О'Reilly supplemented David Michael's words. - And by the end of the year this network should be replenished with 3.5 thousand game offices equipped on the last word of information technologies”.
And now due to the profitableness of the gaming business the corporation provides to itself an exclusive position in the world market of services for rest, tourism and entertainments.
Marketing solutions in virtual space
The main innovations of Hilton's hotel chain appeared already after the death of the father-founder when the world entered the era of electronic commerce and electronic business. Following the precepts of Konrad Hilton, his followers could become the first who occupied all opened favorable niches - basically due to that the work on “electronization” of Hilton hotels and the infrastructure connected to it started long before all known the world nowadays - e-Business and IT-technologies. Today competitors are trying quickly to pass already passed by Hilton stages of technological reorganization and to spend a lot of money to the things on what Hilton collects dividends for a long time.
In 1973 the company Hilton Hotels was the first in the world hotel business who introduced an information system HILTRON. With its help the client could receive data on presence of places and reserve rooms with railway and air tickets. An efficiency of the pioneer system appeared above all expectations - it had been successfully working for 26 years, and only in 1999 was replaced with more modern: Central Reservations System (CRS or HILSTAR), uniting 500 hotels all over the world.
In 1985 the corporation started an exploitation of other system - marketing (Answer*Net), united in one network all regional offices and hotel complexes from the territory of USA. And after one decade was the first who joined in the World Wide Web - started to function an Internet-portal www.hilton.com and appeared with the support of the company American Express an own system of credit cards Hilton Optima.
In 2002 the Hilton's hotel empire became one of initiators of the creation of united system of network booking WorldRes in which, except the hotel chain Hilton, resources of two other great players on the field of resort-hotel business - companies Accor and Six Continents were included.
At last, some time ago the company with success announced one more innovative service decision - an access to the wireless local network on the basis of switchboards of wireless connection Symbol Technologies. This communication complex was tested in Frankfurt Hilton, and it got popularity from administration and clients at once.
As the magazine “Business review” wrights: “Steady, scale and all-round intrusion of the hotel empire in virtual “cyberspace” occurs in conditions of almost full decentralization of technological structures and their activity. The committee of directors, the general financial system and a united strategic line in Hilton are available - as in all companies. But there is no vice-president for IT-direction or any other main coordinator of electronic business in its staffs.”
It provides corporation an extraordinary flexibility in such new sphere where everything varies literally not on days, and on hours. And also it testifies about the business feeling of those who continues the business of Konrad Hilton.
In my project work I showed the main marketing solutions of the Hilton Hotels Corp. thanks to what this company became one of the leaders of the world hotel industry and hospitality.
In my theoretical part I showed what is hospitality and its modern tendencies. I did it because I think that without these things some moments in my project work would not be seemed as important as they should.
I made my own research and all the results were shown below the graphs.
The marketing concept was represented by Hilton in the hotel Mobley in reducing the meters in restaurant and increasing of the number of rooms and also in making glass show-windows. This concept is now used all over the world.
Physical evidence I showed on the examples of several hotels which can be used by businessmen and holiday-makers. As I said this solution was new for the hotel industry and this combination of different people's goals gave a lot of profit for Hilton Hotels Corp.
For today practically all large hotels are included into any hotel chain, by what they involve more clients. This concept of franchising was tried by Hilton Corp and now is known all over the world.
In my work I wrote a lot about the development of a new product because I think that it is one of the most important and difficult things for every company because it leads to serious risks. The unification of Hilton Corp. and Ladbrokes opened a new era for hospitality and saved this company from great losses because of the terrorism.
And the last solution that I discussed is the entrance in the virtual sphere. It opened new possibilities for the company and clients (visitors) to communicate with each other.
At the end I want to say that Hilton's corporation is now known all over the world and it is one of the most profitable and respected international chains and I am sure it would not be possible to do without these marketing (sometimes risky) solutions.
1. Shmat'ko L. P. Tourism and hotel industry. Moscow - Rostov-on-Don. Mart 2005
2. Iankevitch V. S., Bezrukova N. L. Marketing in hotel industry. Moscow. Finances and statistics. 2005
3. Dgandjugazova E. A. Marketing in hospitality. Moscow. Academia. 2005
4. Kotler Ph., Bowen J., Makens J. Marketing, hospitality, tourism. Second edition. Moscow. Unity. 2005
5. Kotler Ph., Keller K. L. Marketing management. 12-oe. New Jersey. Prentice hall. 2006
6. Magazine “Companion”. Article “The house that was built by Hilton” 19.10.2005
7. Magazine “CIO”. Article “Business with all accommodations”. №5 (26). 21.05.2004
9. Magazine “Business review”. Article “The heritage oh Hilton” (bo.ex.ru)
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