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Hilton Hotels

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Submitted By shakur94
Words 1305
Pages 6
The Improvements of
Hilton Hotels
Stephen Hammond
MGT 1304-01 Fall 2013
11/11/13
Winston Salem State University

Abstract

In this paper it reveals the history of the Hilton Hotels over the years and how it has expanded into this international corporation that is well known as of today. Also, this includes the downfall that the company has faced in trying to become successful. Then some financial issues that had taken place over the years. Strengths and weakness about the company , so it can become better.

Hilton is a global hospitality company that is owned by the Blackstone group that is a private equity firm. As of 2010 Hilton brand encompass over 3600 hotels with 600,000 rooms in 82 countries in the United States. Hilton owns a wide array of brand hotels (Hanna, 2013). In 1919 the first Hilton hotels was opened by Conrad Hilton. When the first hotel was invented it didn’t have any air conditioning because it was not evented yet. As years go on, they started expanding with more hotels that had air conditioning and cold water. Then a crisis came when people was traveling less and caused the business to decline. After 3 years it was required for the owner to sell his hotel because the stock market had crashed completely for hotel businesses (Hanna, 2006). Years later the Hilton hotels owner started facing more crisis by the moody family of Galveston, Texas, who had loaned Conrad money. The agreement was for Conrad Hilton to help out with their hotel. Suddenly a struck between both parties, both parties had departed and Conrad had gotten sued which led the company into $95,000 of debt (Austrum People). At the end of 2000, Hilton had net long-term debt of $5.1 billion and a debt-to-EBITDA ratio of 4.0 times (Schwartz, 2007). This is a significant improvement from the 4.6 times pro forma debt-to-EBITDA ratio we had at year-end
1999. The Debt service coverage was a healthy 3.4 times. In 2000, Hilton sold approximately $175 million of non-strategic assets and used the proceeds to reduce debt. In early 2001, Hilton sold an additional $95 million of non-strategic assets and applied the proceeds to further reduce debt. It continued to review our portfolio of owned assets and seek to maximize their value for our shareholders (James, 2004). This may take the form of either sales of non-strategic assets or additional investment in the properties that the company owns.
Spending approximately $200 million on maintenance capital in their owned properties during the year, Hilton Hotels spent approximately $300 million on projects designed to enhance the value of our owned portfolio (Hanna, 2006). Some of these projects include the complete renovation of the Hilton Seattle Airport, a major refurbishment of the Hilton New York, and expansion of our vacation ownership business. In 1946 Hilton huge success began when they became a corporation. It started expanding rapidly with buying with eight hotels by using profits from oil leases. The corporation was located in Los Angeles. In Hilton Hotels was listed in the New York exchange. This was the first hotel to be posted. Hilton was known for the largest shareholder with $9 million worth of stock (Schwartz, 2007). In 1949, Hilton realized a long-held goal when he leased New York's Waldorf-Astoria, considered to be the greatest hotel in the world which caused him into buying the Statler hotel chain for $111 million (Kleiner, 2013). His chain now totaled 28 hotels. In 1954, Conrad Hilton shocked the financial world, having made the largest deal in the history of America. He purchased Statler Hotels Company for $ 111,000,000 that was the main competitor to Hilton (James, 2004). Years later, the largest Chicago’s Palmer house and Steven’s was also purchased. Hilton competes with global players, such as Starwood Hotels & Resorts Worldwide, Marriott International, Choice Hotels International (CHH), Hyatt Corporation, the France-based ACCOR Group, and Intercontinental Hotels (James, 2004). Hilton already has a strong presence in the U.S and is expanding its global operations through acquisitions. This acquired the U.K-based Hilton International in February 2006 to establish a footprint in the U.K. It also signed a multi-year agreement with a leading resort real estate developer in Thailand, Destination Properties, to manage a newly built, 358-room golf resort and spa in Thailand (Hanna, 2006). Hilton Corporation is also increasingly relying on the franchisee-based model for growth. This enables the company to earn revenues without incurring any additional costs to purchase real estate and construct hotels. This strategy further enables the company to concentrate its efforts towards building a strong brand instead of buying real estate. With the Hilton expanding they have their competitors that sometimes could get in the way of their success. The corporation competition comes from Marriot International, Starwood Hotels, and Accor. Some strength that Hilton faces is High brand recognition, technical innovations to improve customer experiences and constant upgrade of business processes. Weaknesses that affect Hilton starts with limited market share. Being that Hilton is an international corporation they really keep things within the business rather than sharing their market ideas with other hotels. Also being that its international, it can be affected globally since hotels are all across the country. In this paper that I am writing it’s very obvious that this corporation is always succeeding. Coming from when the business first started out has made a drastic change. For example: At first no air condition was in the hotels, until now where there are casinos, game systems and much more entertainment. From research it’s very possible for this corporation to keep on gaining their success, In order to maintain this lead, Hilton needs to continue, and expand, its efforts by monitoring key metrics, such as:
 Customer feedback/Customer satisfaction levels
 Operating expenses
 Profit margins
 Return on investments, and
 Inventory turns on consumables.
This paper shows that an IT System that is properly designed for the application
Where it will be used will result in increased customer satisfaction and improvement in operational effectiveness.

References
20. (n.d.). birchstreet. Retrieved November 20, 2013, from http://www.birchstreet.net/news/studies/hilton_CS.pdf
33. (n.d.). Hilton Hotels Corporation. Retrieved November 20, 2013, from http://media.corporate-ir.net/media_files/irol/88/88577/reports/2000AR.pdf
Conrad Hilton Biography: The History of Hilton Hotels Corporation. (n.d.). Conrad Hilton Biography: The History of Hilton Hotels Corporation. Retrieved November 17, 2013, from http://astrumpeople.com/conrad-hilton-biography-the-history-of-hilton-hotels-corporation/
Conrad Hilton Biography: The History of Hilton Hotels Corporation. (n.d.). Conrad Hilton Biography: The History of Hilton Hotels Corporation. Retrieved November 18, 2013, from http://astrumpeople.com/conrad-hilton-biography-the-history-of-hilton-hotels-corporation/
Hilton Hotels Corporation History. (n.d.). History of Hilton Hotels Corporation – FundingUniverse. Retrieved November 19, 2013, from http://www.fundinguniverse.com/company-histories/hilton-hotels-corporation-history/
Hilton Worldwide: Partnering for a Competitive Advantage. (n.d.). IT Training. Retrieved November 20, 2013, from http://www.trainingindustry.com/professional-education/articles/hilton-worldwide-partnering-for-a-competitive-advantage.aspx
MBASkool-Study.Learn.Share.. (n.d.). Hilton Hotels and Resorts. Retrieved November 20, 2013, from http://www.mbaskool.com/brandguide/tourism-and-hospitality/4284-hilton-hotels-and-resorts.html
Tempkin, A. (2013, November 14). Hilton to start marketing largest post-crisis CMBS. Reuters. Retrieved November 20, 2013, from http://www.reuters.com/article/2013/11/14/idUSL2N0IZ1FU20131114
The History of Corporate. (n.d.).  Hilton  by . Retrieved November 19, 2013, from http://www.thehistoryofcorporate.com/companies-by-industry/leisure-and-hospitality/hilton/
The History of Hilton Hotels. (n.d.). The History of Hilton Hotels. Retrieved November 17, 2013, from http://www.streetdirectory.com/travel_guide/210602/hotels_and_hostels/the_history_of_hilton_hotels.html

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