Hospitality Operations Development 1

HOSPITALITY OPERATIONS DEVELOPMENT

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 Hospitality Operations Development 2

HOSPITALITY OPERATIONS DEVELOPMENT

Operations Strategy for Hilton Hotel

The success of a venture depends on the decisions made to guide the entire organisation

towards certain goals or enhance operational effectiveness in line with the supreme objectives.

Although there are different types of decisions made to influence corporate activities, the two

major ones are operations and strategic. Strategy and operational policies deal with different

aspects of a company; the first provides the direction of the entire business while the latter

affects the day-to-day operations (Mujukwa & Haddud 2016). Most enterprises have various

operations resource capabilities and performances that influence the nature of strategy

development relating to market requirement. An assessment of the firm's potential and resource

base can help define areas of improvement to achieve strategic goals. Equally important is that

the operational or strategic decision embraced may drive sustainable competitive advantage of a

business entity or a particular operation. Operational decisions are created through a process, and

structural and infrastructural factors serve a crucial role in delivering the operational strategy

(Slack & Lewis 2017, 310). In the end, operational strategies help to build the competitive

advantage of a business's operation. The essay will critically analyse the process of developing

and maintaining an appropriate operational strategy for Hilton Hotel’s front office activities.

Alignment with Market Requirements

The front office is seen as the hub of any hotel offering accommodation and catering

services. It is the point where clients make the first contact and get a hint of the overall customer

service impression of an establishment. However, it has four different stages of the guest cycle

that includes the pre-arrival, arrival, occupancy, and departure. The front office team makes part

of the four stages. It is among the most crucial part since it is where clients get the first-hand
 Hospitality Operations Development 3

experience of a company’s approach towards customers. It is, therefore, an important area of

strategic and operational importance to enhance its capability, competitive advantage, and

sustainability to a business (Pullman & Rodgers 2010, 178). Hilton Hotels & Resorts is a global

brand offering full-service front office, accommodations, housekeeping, catering, and

entertainment for business and leisure travellers.

Market

Requirement

Alignment between market and operations capability

Level of operations resource capability

(Source: Slack and Lewis)

Hiltons’ innovative and competitive front office services are seen as the performance objective

that the company desires to meet formulated by the market requirements. Under this scenario,

Hilton’s clients cannot expect more after this alignment is achieved. The prudent use of resources
 Hospitality Operations Development 4

is, therefore, an integral aspect of ensuring that operational resources and market requirements

balances in its operational strategy. To this end, Hilton can achieve the alignment by defining its

market needs, then assessing its competitive priorities by setting goals through corporate

strategy. Alternatively, Hilton can anlyse its existing resources and match it with the market.

Alignment is an integral part in achieving organizational performance.

Key Aspects That Exemplifies Hilton’s Success in its Operational Strategies

 Customer satisfaction has steadily improved since year. For instance, in year 2000, the

company was ranked number one compared to its peers. In the year, 2003, Hilton won the

J.D. Power Award for the highest guest satisfaction among all mid-priced full-service

hotel chains.

 Guest royalty has consistently risen by over 9% over years.

 The hotel has recorded a steady increase in total revenues.

 Operational costs have reduced by as much as $36 million per year.

 The company boasts of team spirit among its employees.

 Overall performance across the many different hotel chains has been consistent.

Operational Capabilities

A capability is defined as the ability of an operations resource to accomplish a particular

task (Slack & Lewis 2017, 122). Resources are assets and entail all the tangible, intangible and

human resource that a corporation owns and are used to produce goods and service (Gavronski

2012, 10). Capabilities, on the other side, are a complex pattern of skills or expertise applied in

utilizing resources to achieve the desired objectives (Otengei et al. 2017, 88). Resources and

capabilities are crucial aspects of an organization's competitive advantage. Hilton is a global

brand and has been a leader in the hospitality industry since it was founded in 1919. It is a
 Hospitality Operations Development 5

beacon of quality, innovation, and success. Its mission is to be the world’s most hospitality

company delivering exceptional experiences at every hotel, guest and all time. Hilton’s core

values include hospitality, integrity, leadership, teamwork, ownership, and timely services.

The core competency theory states that an organization creates its competitiveness by

harmonizing its resources and skills. The Hilton Hotel has streamlined its operations to achieve

the mission and values. It has state of the art resources that include trained and competitive

staffs. Additionally, the company has modern facilities, equipment, and approaches to business

management. The front office processes at each hotel have been made competitive through the

integration of hiring trained staffs and information technology. At the hotel’s front office

operations, there are high-speed internet connections and data management systems that simplify

the processes while at the same time offering clients efficient services. Potential customers can

use online platforms to assess different packages and make applications. The company also has

all-time customer support that provides clients with great services. By utilizing the core

competency model in the development of the front office operation strategy, the Hilton hotel has

been able to achieve its strategic goals of higher revenues and profits.

Porter’s theory of competition is evident at Hilton. Technological and dynamics of

customer tastes form part of a landscape of making strategic decisions. Entrepreneurs make

choices of services and products to offer to target populations and then utilize business models,

organisation practices, policies or structures to coordinate activities. Hilton's resource capabilities

for front-office indicate that the firm is well-versed with the market requirement (Peng,

Schroeder & Shah 2008, 730). Clients in the hospitality industry are looking for efficient,

pocket-friendly, timely and satisfying services. Here, the company uses the customer bargaining

power to attract more clients. Front office services processes that take less time while giving
 Hospitality Operations Development 6

satisfactory information to potential customers is an excellent mark of a competent hospitality

business. In the contemporary world, most people have embraced technology that makes it easier

to access different services at any time and location without incurring further costs. The Hilton

hotels’ resource capabilities for the front office operations meet the market requirements, but

there is a need for more improvement to create a competitive advantage.

The use of IT and highly skilled personnel helps to provide faster, efficient, and satisfying

services to all clients. The high-speed internet and data security systems used in front office

reservation ensure that clients get timely feedback and services (Ismail, Rose, Uli & Haslinda

2012, 157). Customers have an opportunity to select and make orders of their desired services

without the time and geographic barriers. However, despite the fact that Hilton’s front office

resource capabilities meet the contemporary market requirements, there is a need to adopt

operational strategies that will streamline procedures and possibly reduce operating costs (Peng,

Schroeder & Shah 2008, 733). Presently, Hilton Hotels employs a team of skilled personnel to

run the front office reservation tasks. In the end, incur more expenses that could be deployed

elsewhere to improve service delivery.

The resource capability and performance of Hilton Hotels’ front office operations are

similar to those of other players in the industry, and this undermines its strength in SWOT

analysis. The vast majority of international hotels have invested heavily in customer services by

incorporating highly skilled and technology in customer support (Brown, Bessant & Lamming

2013, 223). This is a weakness and a threat to Hilton hotel. Additionally, there is increased

attention to the quality and diversity of services offered at the front office to meet the global

standards (Peng, Schroeder & Shah, 2008 730). However, while a significant number of

hospitality ventures meet clients’ requirement throughout the front office operations, many fail to
 Hospitality Operations Development 7

live up to the same standards in other parts. Moreover, the duplication of strategies used makes

the majority lack creativity in the provision of unique and competitive services that are

sustainable. There is a need for the utilization of operational policies that improves the

competitive advantage of front office reservation processes for business sustainability.

Ways in Which the Operation Strategies for Front Office Activities Could

Contribute to the Achievement of Strategic Goals

According to Slack and Lewis (2011), a business has to identify its resources and

evaluate them to identify the core resources (VRIN) that give it the competitive advantage and

enhance sustainability. Utilities are classified as valuable (V), rare (R), imperfectly imitable (I),

and non-substitutable resources (N). Corporations that strive to acquire the VRIN have higher

chances of success and competitive advantage in the market (Slack and Lewis 2011, 88). In this

case, the Hilton Hotel could enhance its competitiveness by acquiring valuable, rare, imitable,

and non-substitutable resources (Peng, Schroeder & Shah 2008, 731). Presently, the firm's front

office utilizes processes, equipment, customer support team and technologies similar to those of

other major international hotels. In that case, although the hotel boasts of innovative and unique

systems, it lacks a sustainable and a competitive edge due to the similarities in its operations and

resources used.

The hospitality industry relies extensively on human resources to drive the front office

operations that are core competitive capabilities. Hilton hotel is not an exception and has utilized

the Prahalad and Hamel model of core competency. In the front office operations, the

management has adopted an operation strategy of harmonizing a combination of multiple

resources and skills. For instance, the use of innovative technology and highly trained staff is a

competitive strategy in the industry. Leonard-Barton (1992, 113-4) defined capability as the
 Hospitality Operations Development 8

knowledge set that differentiates and provides unique competitiveness to a business.

Organizational capabilities (OC) develop through the acquisition of knowledge. Barney (1991)

argued that OC can help a business increase its competitive advantage by basing its strategies on

an understanding of strengths and weaknesses. The human resource is an important resource

capability driving competitiveness in customer service. It is a core component of the front office

operations (Peng, Schroeder & Shah, 2008 733). As such, establishing the human resource

development function, it can become a proactive source of competitive advantage (Ulrich &Lake

1991). The Hilton Hotels could invest in operational strategies that seek to drive organizational

outcomes such as customer and stakeholder satisfaction.

An operational strategy is defined as a consistent pattern of decision making concerning

the operational functioning linked to a business (Brown, Bessant & Lamming 2013, 45). It is

seen as the effective utilization of resources to achieve business goals. Hayes and Wheelwright

(1984) explain that a key element of operations strategy consists of decision areas such as

structural and infrastructural. A typical approach towards evaluating the best operational strategy

is to assess the desired competitive operational performance and the contribution to

organizational objectives (Pullman & Rodgers 2010, 178). However, while it is essential to

identify the capability that helps to create a competitive advantage, it is also vital to understand

the means of delivering the needed output at the operational level (Augier 2011, 83). Using the

Resource-based view (RBV) paradigm, the basis of establishing the capability that needs

improvement is to focus on the routines since they are the source of operational capabilities (Hitt,

Carnes & Xu 2015, 107).

In most cases, the routines followed by customer care staffs during the front office

procedures may have a significant impact on the overall client satisfaction or dissatisfaction
 Hospitality Operations Development 9

related to services offered by a business (Peng, Schroeder & Shah 2008, 733). For this reason, by

applying the Resource-based view (RBV), the operational capabilities of front office could be

enhanced by implementing operation strategies that focus on available resources and procedures

(Augier 2011, 84). In a typical front office for a hospitality business, human labour and IT forms

the core resources. To this end, Hilton Hotel could offer a more competitive service by investing

in decisions that streamline routines at the front office. Here, the company could make decisions

that touch on costs, quality, flexibility and delivery measures to achieve operational performance,

competitiveness and sustainability.

External outcomes

Cost

Low price

Speed Internal capability Dependab

ility of
Quick Low cost, fast, reliable, ability to delivery
delivery change, error-free

Flexibility
Quality
Frequent
Error-free
products
 Hospitality Operations Development 10

Five performance objectives

Source: Slack et al., 2010

Hilton should adopt the five performance objectives to enhance its business and customer

service. It needs both the internal and external capabilities. Internal capabilities are low cost, fast,

reliable, ability to change, and error free services. The external capabilities that the hotel should

embrace are speed, quality, flexibility, dependability, and offering products of high value and at

low costs.

The Process of Developing an Operations Strategy

Operations processes are of strategic importance to a business mainly due to the

increased aspirations for lean production and customer-centric provision (Brown, Bessant &

Lamming 2013, 44). A strategy means different things to different people. However, a consensus

is that it is a plan, an integrative blueprint or a perspective of doing things (Slack & Lewis 2017,

9). A strategy is concerned with meeting the existing market demands and exploiting available

opportunities. A strategic decision is also about making the best use of resources (Augier 2011,

83). Businesses face increasing levels of competition that may undermine the competitiveness

and the sustainability of a venture. However, by adopting competitive strategies, entrepreneurs

can wade off competitors (Anupindi et al. 2012, 13). The success of an operation strategy is

determined by which it focuses its operational efforts into an integrated set of capabilities.

The first phase towards developing a sustainable operational strategy is through an

understanding of an organization’s mission and vision- the present standing of a company in the

market (Slack & Lewis 2017, 33). Ideally, Hilton Hotel operates in a competitive environment.

Although the company has sufficient and innovative resources, there is a gap in achieving more
 Hospitality Operations Development 11

competitiveness. The mission helps to identify decisions concerning capabilities and resources

that can be used to improve performance and future business competitiveness (Kim, Sting,&

Loch 2014, 462). Operation capabilities help to point out to the current markets which a firm

competes and the potential target populations.

A business must know its operational capability standing concerning resources and

routines. For instance, the reservation process at Hilton Hotel relies extensively on technology

and trained customer support personnel. In this case, the company could enhance its competitive

advantage by using a routine-based approach to understand the strength of its reservation

procedures in comparison to those of the competitors and future performance (Farrington,

Antony,& O’Gorman 2018, 582). Decisions selected should focus on minimising costs,

improving quality of services, and flexibility of routines (Hill & Hill 2012, 681). Improving the

existing processes can both increase a business’s competitiveness and output. Capabilities are

built through consistent managerial choices in identifying, developing, and integrating routines.

The next step in developing operational strategy is identifying what is important (Slack &

Lewis 2017, 25). In this stage, one should gather and analyse information relevant to

accomplishing the desired vision (Anupindi, et al… 2012, 11). The focus should be evaluating

the needs of a business, strategic direction and initiatives that will help the business grow (Kim,

et al… 2014, 462). Here, it is good to examine the strengths and weaknesses that can affect the

achievement of the desired objectives. For instance, Hilton Hotel could assess the customers’

expectations, services needed, the available capabilities and the gaps that need to be filled in

front office operations. From the analysis, one can obtain the priority issues that will drive

business performance and competitiveness.

 Hospitality Operations Development 12

The third stage of developing an operation strategy entails the determination of the

resources that a business has that can help reach the defined objectives and goals (Magutu,

Mbeche, Nyamwange, Mwove, Ndubai & Nyaanga 2010, 5). At this point, the company

management should assess the resources and capabilities owned and which must be sourced

externally. Here, business managers can utilize the Resource-based view to identifying the VRIN

artifacts that could help improve operations (Kim, et al… 2014, 463). The supreme goal of

Hilton Hotels is to provide a world-class customer experience by integrating technology and

skilled personnel in the management of front office activities. The valuable resources include

innovative technology, equipment, and facilities (Slack & Lewis 2017, 25). However, since the

routine used during reservations is similar to those of the competitors, the company can

formulate a strategy to change the processes in ways that reduce costs while at the same time

enhancing the competitiveness of the front office operations.

The fourth stage involves the implementation process. At this step, company management

should mobilise relevant resources and a plan of actions that will help implement the formulated

decisions. Successful strategy implementation is crucial to the success of a business (Slack &

Lewis 2017, 314). It is also critical to define what must be achieved based on the strategic

direction and operational requirements. Determine who is accountable, the materials needed and

the timeframe. Everyone within an organisation should be clear about their role and duties

towards the achievement of the shared vision. In the case, of Hilton Hotel, the company may

decide to use more innovative technology that gives real-time feedback or allows clients to make

reservations within the shortest time possible. The business could reduce the number of customer

service staffs and invest more in technology to save costs and enhance efficiency.
 Hospitality Operations Development 13

Reviews are crucial during and after the implementation of the operational decisions.

Strategies evaluation includes a consistent review of all the internal and external issues and

correcting where necessary (Slack & Lewis 2017, 320). A successful evaluation starts with

defining the parameters to be measured, and they should mirror the goals set in the first step. It is

prudent to determine the progress by measuring the actual results as opposed to the plan.

Monitoring helps to assess whether a strategy is moving towards the desired goals and what

needs to be corrected (Farrington, et al… 2018, 583). For instance, after implementing decisions

that will improve customer service during reservations, the departmental manager tasked with

front office activities may conduct regular reviews to determine the progress or impact of

operational strategies. The most common indicator maybe reduced costs and satisfied clients.

Moreover, changes in the process may reveal whether there is an increase in the number of

customers.
 Hospitality Operations Development 14

Performance Needs to be Achieved

Cost

Flexibility

Speed

Dependability

Quality

Quality

Quality + dependability

Quality + dependability + speed

Source: Slack and Lewis, 2011.

Performance benchmarking can arise when Hilton assesses its business with competitors in the

industry to develop an appropriate service standard based on clients’ expectations and needs. The
 Hospitality Operations Development 15

Sandcone Theory exemplifies the best order of improving operations performance. The first is

quality, followed by dependability, speed, flexibility and then cost.

Structural and Infrastructural Factors in Delivering the Operations Strategy

Decisions that make up the operation strategy encompass the infrastructural and

structural factors (Slack & Lewis 2017, 310). Structural decisions require significant investment

and have a lasting impact. Mostly, they include issues dealing with capacity, technology, and

location among others. Infrastructural decisions have a short-term effect and help to support the

production processes. They include organisational structure, human resource, stock control and

quality management (Hill & Hill 2012, 687). Structural and infrastructural factors influence

business performance. The operation area is a crucial element in improving business

performance. In that case, operations strategy is seen as efforts made to accomplish an

organization’s goal through the efficient use of resources (Gannon, Roper & Doherty 2015, 65).

The benefits of operational decisions are based on the propositions of the Resource-Based View

(RBV) of a business. The RBV considers an organisation as a set of resources and capabilities

that must be treated as strengths and reinforced to achieve a competitive advantage (Lin & Wu

2014, 407). Operation strategies consider the resources stemming from infrastructural and

structural decisions. The bottom line is that processes based on actions derived from operations

strategies determined by infrastructural and structural policies lead to the improved competitive

advantage.

Decisions Needed to Deliver the Required Performance

In the development of operational strategies that will improve front office operations at

Hilton Hotel, decisions made should be based on structural and infrastructural factors. Structural

factors include aspects of facilities, technology, and vertical integration. The identified resources
 Hospitality Operations Development 16

could then be used to create capabilities that drive the business competitiveness in front office

operations (Anupindi, et al… 2012, 105). In strategic development, decisions could be made to

have more appropriate facilities, technologies, and integrate routine tasks with competent

personnel. In the end, improvements in structural factors such as facilities, technology, and

integration could give Hilton Hotel the competitiveness it needs in the market. Moreover, the

selected policies could lead to increased output, and consequently, the sustainability of the

business (Anupindi, et al… 2012, 300). The primary decisions that could be made include

investing in better facilities, computerized systems, and using integrating human resource with

IT for better performance.

Infrastructural factors include aspects as quality, planning, organisational structure,

human resource management, and development of new services and processes (Pullman &

Rodgers 2010, 177). The vast majority of decisions that can be made to improve front office

operations would involve planning reservations tasks, restructuring the routines of customer

services and introducing new services or processes (Anupindi, et al… 2012, 104). Additionally,

changes that improve human resource management and quality management systems would have

a positive impact in delivering better customer services (Espino-Rodriguez 2015, 6). To this end,

important decisions that they can help deliver the required performance include restructuring the

front office operations, planning for all tasks, introducing new services or processes and prudent

management of personnel.

In summary, the development of operational strategies that drive the competitiveness of a

business is a complex undertaking. It requires one to understand the resource capabilities of a

firm, operation or department. Operation strategies should be created through internal and
 Hospitality Operations Development 17

external resources. Moreover, the desired objectives should mirror the overall strategic mission

or vision of a company.
 Hospitality Operations Development 18

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