In today’s business world, several core challenges have earned great importance among operations managers. In this paper, the challenges have been shown to present difficulties on the success of hotel businesses in the future, primarily focusing on the ‘Hilton Hotel & Resorts’ (HHR). Therefore, operation managers need to give more focus on these factors to ensure their business survival, especially because hotels operate in an increasingly competitive environment. The six aspects analyzed comprise changing technologies, global manufacturing, continued globalization, quality management, changing job designs, and the changing consumer expectations. Additionally, the paper also assessed the four main aspects of operation management that most likely influence HHR’s business success. They included quality management, supply chain design, management of inventories as well as goods and service design. The four aspects have been shown to affect the hotel’s profitability, performance, and efficiency.
Challenges and Impact on Business in Future. 4
Continued Markets’ Globalization. 5
Changing Customer Expectations. 6
Areas most Likely to Affect Hotel Business Success. 9
Recommendations to Hotel Companies. 13
Work Cited. 15
Operations management (OP) stresses on the management of all aspects associated with an organization’s operations (Shim & Siegel 2009). The concept integrates many different organizational functions, with the two major functions including providing products or services and selling such products. OP focuses on planning and controlling all organizational activities, which are essential in providing products or services. In understanding operations and their subsequent contributions towards business success, it is important to understand the various challenges that may influence such businesses in future. Moreover, over the recent years, there have been several challenges that have won the attention of operation managers in organizations, in relation to how they influence businesses. In this case, this paper will evaluate how such challenges might affect the hotel business in future primarily focusing on the case of ‘Hilton Hotels & Resorts’ (HHR), while also discussing key areas of OP that may influence the success of the hotel’s business.
Challenges and Impact on Business in Future
A hotel business involves a commercial establishment, which offers meals and lodging, and other guest services. This is a business that operates under the hospitality industry, which is an increasingly competitive business. What happens behind the scenes within this industry is critical in delivering great and exceptional customer experience. Moreover, client satisfaction plays a vital role in ensuring the overall success in this form of business. For this reason, the operational functions in this business must ensure they create the best experiences for customers for successful outcomes. In this case, this analysis will be evaluating a number of OP issues that may challenge the HHR’s business in future. HHR is a US-based hotel and among the most popular hotels in the hospitality industry. The hotel’s popularity has been tremendous among travelers all over the world for many years.
Technological change consists of the whole process of technological innovation, invention, and diffusion (Jaffe 2008). Business future has constantly been shaped and driven by technological developments. Today’s trends have demonstrated technological changes day after day. As a result, such changes have significant implications upon future businesses of hotels. The digital revolution, for instance, may intensify the HHR’s competitors’ playing field thereby placing their business in a difficult position. This is primarily because smaller competitors in the hotel field may form coalitions in future to allow the forming of similar or larger scale companies without becoming capital intensive. Consequently, this will most likely reduce the big players’ market power.
Huge market players in the hotel industry including HHR should constantly scan their environment of operation to help in detecting shifts within the consumer environment. HHR can also counter such technological challenges by constantly adopting new technologies as well as new business models to remain competitive and survive in the market. The internet is another increasingly developing field that will shape the hotel business operations now and in future. The trends indicate that the internet will be a powerful tool through which hotels like HHR can continue marketing, running, and developing their businesses. This is because most customers today are deriving diverse information from the internet, such as the best hotels and price ratings in specific areas. Indeed, this trend is expected to continue even into the future. Many internet applications are emerging daily, immensely transforming consumer behaviors and HHR must align their business accordingly based on these changes in order to remain relevant and competitive in the market. Moreover, failing to align within such newly developing technologies may risk HHR losing their competitiveness and giving room for their rivals to thrive.
Continued Markets’ Globalization
Globalization involves the process of continued integration among countries across the world. According to Mrak (2004, p.1), globalization relates to the movement of ideas, goods, services, technology, and capital across national borders. For market survival as well as continued business success, hotel companies including HHR will be expected to align both their internal and external operations to match market globalization. Similarly, such businesses will be required to identify and grab opportunities before their competitors in order to obtain a competitive advantage while also preventing threats presented by the environment. Therefore, considering the constant globalization of markets, identifying factors that will most likely enable hotels to develop sustainable competitive advantages will be among the most crucial challenges that will face their business operations. Noticeably, the tourism and hospitality industry has been growing into a real global industry.
Globalization of businesses in this industry, and free trade has continued intensifying competition. Thus, operations managers will continue facing challenges related to how they can develop business growth, improved financial performance, and sustained competitive advantages. Moreover, market saturation plus competition from other international hotel companies will continue demonstrating the significance of competitive advantages within today’s marketplace (Gursory 2014). The entrants of the 1st and 2nd world entrants, for instance, will lead to intense competition in the US hotel industry where HHR operates. This is primarily because the huge international chains have continued expanding into global markets such that currently there are many hotel brand names in this market that are yet to attain the critical mass needed for marketing excellence. Globalization demands may motivate more consolidation in this field as small hotel companies undergo acquisition or lose market survival. The need for hotel firms to attain critical mass as well as attendant scale economies illustrate that in future there will be reduced number of big companies as the essential of global expansion continue persisting.
Changing Customer Expectations
The essential customer service principles, such as knowing one’s customers are timeless. Effective customer service requires businesses to fully satisfy their clients’ needs and expectations. Customers’ expectations relate to the perceived value clients seek from buying a specific product or service. Parvatiyar (2001, p.8) observed that customer expectations have quickly changed within the last 20years and they have been changing daily. Such changes are driven by new technologies and increasing availability of advanced products’ features. Businesses that desire to succeed and retain their business survival to the future must learn how to always satisfy customers’ expectations. Such businesses must constantly research the market to establish their ever-changing consumer needs. The success of hotel organizations, such as Hilton in future will be driven largely by their ability to forecast and maximize on change. Such companies should acknowledge the urgent need in identifying what the future competitive market will require based on a strong focus to satisfy customer demands and needs. Furthermore, just like any other form of business, the hospitality industry is subject to powerful change currents triggered by social and economic systems currently operating under a knowledge-based era and motivated by the technology developments. Therefore, Hilton hotel will need to constantly examine the core factors that define business excellence and ability for surviving in future markets, such as continuing conducting customer-focused operations (Cline n.d). Hilton Hotel acknowledges the need of constantly understanding the market they serve and the constantly changing customer expectations. For this reason, the company has been rapidly innovating to satisfy the changing customer demands through technology, mindfulness, and experience. For instance, the hotel has been tapping into technology innovation in order to enhance their guests’ experiences.
Changing Job Designs
The designs of chores that people should carry out are crucial in ensuring success of operations in organizations. According to Barnes (2008, p.342), a job design relates to the process of detailing the techniques people use in conducting various assignments. This is especially how such tasks interact with technology under application. Effectively designed jobs allow workers to attain higher performance levels. As such, these job designs keep changing in organizations to the changing features or nature of work. Such changes are largely driven by technology advancement. As a result, many operation managers face challenges on designing work systems that can lead to successful business results. Success in future will require such managers to design tasks in a manner that center around machines, people, and how the two interact (Shim & Siegel 2009). Hilton’s operation manager is not an exemption in this respect since the hotel has to continue designing work based on a policy of quality, flexibility, and reliability if business success is to continue being attained even in the future (Wild 2009). Indeed, this will require the company to deploy work systems that are versatile in addition to skilled labor.
To overcome change in job designs in coming years, HHR’s work methods will need to be flexible and work standards should not constrain workers’ flexibility. The hotel should similarly employ flexible technology while job designs should be such that they motivate workers’ commitment towards quality. For instance, HHR has recently unveiled a work system that enables a flexible initiative for ‘work-at-home’ for some of their workers within the customer case and hotel reservations department. This work program is known as ‘Hilton@Home’, with about 3000staffs within nine contact center locations globally. The employee under this program handle all customer service and reservations functions across all the nine brands within the Hilton family comprising of 500,000rooms, 3000hotels and 36million phone calls annually. In addition, the hotel has been applying a program of the telecommuting call center that allow about 800employees to work from home on a part-time basis, an initiative that was extremely flexible. This form of job design was considered because the company realized how challenging it was becoming to attract people into such entry-level jobs Moreover, the job design has been attracting a surprising labor force of people that would never have thought of working at call centers but accepted the job because they could comfortably work from home while also having extremely flexible schedules.
Managing quality in a hotel business is very crucial. Quality management is the delivery of consistent high standard services that ensure customer loyalty and increased referrals. The level of quality must satisfy clients’ expectations and fulfill their needs every time they visit the hotel premises. Ensuring quality service delivery is a key challenge that operation managers in the hotel businesses will be encountering in the coming years. This is primarily because it is an essential success condition in the developing, highly competitive, and global hospitality markets. For this reason, HHR’s operation manager will need to identify, record, and evaluate the effects of cost-profit while also working towards prioritizing quality improvement processes. Moreover, the hotel business will always have room for additional improvement in relation to service delivery (Kapiki 2012). For example, Hilton Hotel operates under an effective system for controlling the hotel’s performances and among the core factors basic in this system involves quality. The company ensures the hotel rooms are clean and the comfort of their guests is assured. Quality is ascertained through high level of professionalism in service delivery and effectively working hotel equipments.
The concept relates to a strategy where a business seeks the most cost effective location for product or service manufacturing regardless of whether it is within a foreign land (Ober 2008). Operation managers face many challenges when managing global manufacturing operations. There are also difficulties in successfully working together with external partners and internal groups. In the modern economic environment, the leading force behind concentrating on manufacturing operations involves the reduction of total manufacturing cost through deploying a common ground for managing inventory, production, quality, and maintenance (Ober 2008). Operation managers in hotel businesses encounter challenges in this respect because in global supplier networks, producers or manufacturers will no longer be contented with the myopic view on operations. Moreover, in modern and future marketplace, the fine for high costs of operations, delivering services that do not meet quality standards, and late market deliveries will be severe and could cripple the hotel business. However, for successful results in future, top manufacturers should lead in addressing such issues while also adopting an effective approach in managing supplier quality, manufacturing operations, and inventory flow. Otherwise, the operation managers may be incapacitated in sustaining or improving the competitive positions of the businesses (Ober 2008). For example, Hilton partners with Superior Uniform Group to produce their eco-friendly Hilton uniforms, a highly popular company for their design excellence. Similarly, the hotel works in collaboration with PLI to manufacture the hotel’s keycards and specialty printed products.
Areas most Likely to Affect Hilton’ s Business Success
Managing quality in a service business including hotels is very crucial in ensuring successful performance. QM ensures a hotel organization delivers consistent services that align with the hotel’s standards (Ray 2014). Hotel guests expect to receive high quality services and they respond by giving their loyalty to the company as well as providing referrals to other potential clients. Once guests are aware that they anticipate the same or higher standard service levels each time they visit a hotel, the business will have managed their services effectively. A number of factors are fundamental in managing quality level of a hotel business. Quality management should always integrate proper hiring. Primarily, this is because quality always suffers whenever new staffs in a hotel are unable to satisfy the company’s expectations. In addition, the managers in a hotel must have the ability to carry out all the tasks assigned to the accordingly. The hiring process, therefore, should always incorporate stern policies to ensure they recruit the right individuals to deliver quality services, which will ensure successful business.
In the service industry where the hotel business operates, staff motivation is very critical in facilitating exceptional customer service (Zeithaml 2010). Such individuals represent the company’s image, which can attract or push away potential customers. Hotel employees need to be provided with continuous training as well as mentorship. Additionally, they should regularly be given appraisals based on customer service. Moreover, effective quality management leads to a team that collaborates to maintain or enhance the quality of services they offer. Efficient quality management is similarly solution-based and employs good problem-solving skills from the best managers. According to Ray (2014, p.1), this is especially crucial in a hotel business that operates 24hours everyday and where there are possibilities for things to go wrong. For instance, staffs can fall sick during busy hours, the hotel can overbook thereby leaving some loyal customers stranded, and computer systems can breakdown, among other issues. For this reason, hotel managers needs to be creative and practical in providing solutions to staff or customer problems as they occur so that they can maintain the hotel quality.
Managing quality in a hotel business is very critical. This is because in any service business, quality matters are very vital in ensuring the business remains competitive through winning new customers and retaining the loyal clients (Montasser & Al-Manhawy 2013). As a result, this enlarges the hotel’s customer base, which is the organization’s basis for profitability. Moreover, effective quality management is illustrated through the company’s profits since profits are directly related to the number of clients a hotel acquires each day. Hotel occupancy rates are the key indicators for their profitability. Hotel brands that have secured high reputation due to their quality levels can even charge higher prices for higher profitability. Hilton hotel has acknowledged the importance of high quality services in their business. Among the strategies the company applies involves motivating their staffs to ensure they deliver exceptional customer services that leave customers happy and satisfied. HHR motivates their staffs through ensuring a fun work environment, assigning challenging and meaningful duties, establishing effective goals and staff development, among other approaches. Such initiatives have been ensuring excellence of service delivery thereby promoting return customers through a popular brand name and increased referrals.
Supply Chain Design
Considering the modern changing business environment, businesses have increased their focus on value delivery to their customers at the lowest possible costs (Odoom 2012). However, this is only possible will an effectively designed supply chain. Large and small hotel companies must devote their attention on ways of providing services and products while maintaining their costs at low levels. Moreover, economic crises immensely affect the hotel industry in that it reduces the demand for their products or services, or encourages customers to switch to the more favorable competitors in terms of prices. Economic and financial crises affect the hotel business in that it reduces the occupancy rates within the specific affected area. Since the business operates in a highly competitive environment, every hotel organization strives to be ahead of its competitors. In addition, the hotel industry is increasingly labor intensive such that many hotels are compelled to make brave moves in reducing the costs of their operations.
Surprisingly, most of such cost-cutting efforts focus on payroll plus other staff-related costs like reducing bonuses, among others. Although such initiatives may work towards boosting the company’s profitability, it is unfortunate that it greatly affects employees’ motivation, despite their welfare being critical to the hotel business success. For this reason, hotel organizations that aspire to succeed in such a competitive market while maintaining their staff motivation should shift their focus towards their supply chains. The supply chain should be designed such that it supports hotels in their cost-cutting efforts within their supply chain and logistics operations. Furthermore, an effectively designed system of logistics/supply chain can play a vital role in enabling the hotel firms have sustainable competitive advantages. Besides enhancing the hotel’s services and quality, designing suitable supply chain and logistics strategies will help in driving costs downwards (Odoom 2012). Therefore, supply chain design is an essential factor in facilitating the success of a hotel business. Moreover, huge hotel brands such as HHR have continued growing and performing very well due to having efficiently designed supply chains that allow cost reduction thereby enabling the businesses to offers services and products at customer-friendly prices to their clients. As a result, such companies have continued thriving despite the competitive market, while their rivals have continued struggling to survive in the same market. This indicates that proper designing and management of supply chains contributes immensely towards the success of hotel businesses through improved performance facilitated by cost reduction practices (Odoom 2012). HHR, for instance, have a supply chain design that allows their operations to save costs. The company’s supply chain design helps in providing comprehensive and value-based supply chain solutions to their worldwide operations. Through that design, Hilton is able to maximize their purchasing power through consolidating supply needs related to more than 4000 of their outlets globally. Under such a design, the company ensures end-to-end solutions to management of their supply through linking owners and suppliers thus meeting and exceeding their brand’s operational specifications and standards.
Just like other hospitality properties, hotels undertake many diversified and complex operations to integrate in their daily activities. All such tasks should be done in a synchronized way in ensuring improved productivity level at the hotel. Moreover, ensuring operations in all departments of a hotel are operating in a smoothly coordinated manner requires a robust and smart system of hotel property management. Inventory management, therefore, is a critical aspect in the hospitality industry in ensuring the success of hotel businesses (O’Fallon & Rutherford 2011). Inventory management is important in hotel business because it allows managers to automate the tracking process of rooms as well as consumption of beverages and foods in a hotel. Previously, the filing of cash memos plus obtaining clearance from the finance departments to facilitate payment to vendors was very tedious work that resulted in massive wastage of effort and time.
However, the emergence of hospitality technology solutions allowed managers to employ the inventory system that involves less work plus greater visibility of tracking stocks. The system allows operation managers to have automatic reminders of stock levels while also facilitating quick decision making on delivery by vendors in relation to what they deliver and at what price thereby allowing for greater efficiency on hotel’s stock maintenance. The technology largely simplifies the management of inventories while also improving the accuracy in tracking purchases and sales. Furthermore, many operations in inventory occur simultaneously including sales, food and beverage purchase, room service plus other room-related durables and consumables. Therefore, inventory management is extremely critical in ensuring the success of hotel businesses because it males tracking of all the hotel activities easier, failure to which can lead to wastage, theft and revenue leakage.
Further, an efficient inventory management system allows hotels to foretell supply and demand rates with high level of accuracy. Similarly, it helps minimize errors, enables hotels obtain business intelligence, plan their expenditures, and strengthen their control on profits. Data gathered through inventory management can be beneficial in boosting hotel efficiency. This is because it helps in maintaining a database related to all purchases, sales, and consumption trends, thereby acting as a valuable source of information for the business since it highlights all areas of concern while also helping in reducing fraud (O’Fallon & Rutherford 2011). Hilton’s worldwide system of property management helps in offering a single and accurate real-time hotel inventories, which has immensely helped in furthering their competitive advantage.
Products and Service Design
When making plans on production of new services or products, the major factor revolves around the design of such services and products. Successful designs translates into the basic principles meeting consumers requirements through satisfying their needs and wants, developing new services and products, formulating quality goals, refining the existing products and services, documenting specifications, constructing and testing prototypes as well as specifying services into process specifications. The design process contains specific steps such as improvement of ideas, motivation, organizational capabilities, and forecasting. In relation to product process innovations, factors like research and development have an increasingly significant role. Considering the impact the design of a product/service can have over a company, a design process is necessary and should be aligned with the organization’s strategy while putting into considerations some key factors. Competitive market, demographic changes, technological changes and economic changes are among the key factors that should be considered since they help in identifying threats and opportunities within the market. When developing such designs, legal and environmental concerns are similarly crucial factors to consider. In this case, a hotel’s production process must guarantee the safety of their services and products for successful business (Montasser & Al-Manhawy 2013).
Hilton Hotel’s success has predominantly been influenced by how they have designed the services and products they offer to their customers. The design has earned the company immense popularity among travelers across the globe, with many wanting to have a taste of their services following the strong brand name associated with the hotel. The company’s products, services, and amenities are increasingly innovative making the hotel synonymous with other recognizable hotels worldwide. HHR has remained stylish, having a forward thinking global leadership within the hospitality industry. Further, the company makes their clients’ traveling experiences simpler and more convenient through their smart designs and innovative restaurant concepts. In addition, the hotel provides authentic and high-class hospitality services, besides their great commitment towards the global community.
The above discussion has provided an analysis of the various challenges in operations management in the hotel sector plus how each may influence the hotel business such as HHR in future. The six challenges presented included changing technologies, global manufacturing, continued globalization, quality management, changing job designs and the changing consumer expectations. Each of the concepts has been assessed based on the how it challenges operation managers in hotel businesses plus some recommendations on how the challenges can be countered. Inclusive also are the four key areas of operations management that are highly likely to affect the success of a hotel business. The four aspects discussed included quality management, management of inventories, supply chain design, as well as products and services design. When designing products and services, the basic principle should be satisfying consumer requirements by meeting their needs and wants. Hilton hotel designs highly innovative products/services that are popular worldwide. Similarly, inventory management is a vital area in the hospitality sector for a successful hotel business. This is because it enables managers to automate the tracking process of rooms as well as consumption of beverages and foods in a hotel. Quality management in a hotel business is increasingly crucial for their business success. Primarily, this is because it ensures the delivery of consistent services that ensure total client satisfaction. Supply chain designs also are fundamental in the success of hotel businesses, especially considering today’s changing business environment that require companies to deliver value at the lowest possible costs. In this case, big and small hotel companies must devote their attention on ways of providing services and products while maintaining their costs at low levels to compete successfully. All the four areas have been shown to be crucial since they affect the hotel’s profitability, performance, efficiency, and competitiveness for successful business.
Recommendations to HHR and other Hotel Companies
- Keep adopting new technologies and new business models to remain competitive and survive in their markets
- Constantly scan their environment of operation to help in detecting shifts within the consumer environment
- Align both their internal and external operations to match market globalization
- Deploy work systems that are versatile in addition to skilled labor
- Work towards prioritizing quality improvement processes
- Adopt an effective approach in managing supplier quality, manufacturing operations and inventory flow
- Adopt an effective approach in managing supplier quality, manufacturing operations, and inventory flow
- Employ more flexible work methods and work standards should not constrain workers’ flexibilit
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