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The Hilton Concept of Quality

All  employees and franchisees  follow Brand recognition; offer affordable and agreeable hotels and are part of a multi international network of hotels of one to four stars. The network is growing every day as  Hilton Worldwide acquires hotels all over the world. The network promises a facility of reservations, brand recognition and inner controls that are called the Hilton Way . This was the motto of Conrad Hilton forming the corporation in the 1940's. His first Hilton hotel dates back to 1925 in Texas.

Hilton Worldwide runs it's corporations under  Total Quality Management (TQM) as they train only their management and the management of each hotel whether it be corporate or franchised managed  to  brand recognition and to be customer focused. All processes done must be done the "Hilton way" (process thinking, proper environment). The internal running of hotels is the responsibility of the individual hotel. For the purpose of this Paper the Embassy Suites and the Beverly Hilton will be used to show how the Hilton way has not always been sufficient in quality assessment and it has been necessary to add additional controls..

Hilton Worldwide has created a complicated in house program of RevPar index, the Balanced Scorecard and Brand Equity. Millions of dollars have been spent in a data network aligning all hotels so that their financial and statistical data can be part of the Hilton Network. Each hotel pays approximately $70 000 to have the system installed. One cannot be called Hilton without adhering to the network.  Everything is measured, quantified and sent back to corporate to judge their level of service and in terms of revenues. (hiltonworlwide)

RevPar index (revenue per available room) is a primary statistic used to test the financial viability of a hotel. Hilton Corporation uses the RevPar Index, brand equity and the balanced scorecard. Every hotel in their system from the 1 star to the 4 stars practices what the Brand Hilton preaches "Deliver value for Money"

Revenue per available room or the % of occupancy x the average daily rate is to show the financial viability of a hotel compared to another in the same area at the same time and the same type. (strglobal)

A four star Hilton Embassy Suite reserved at 90% occupancy during the Christmas season in Los Angeles compared to a four star Embassy Suite reserved at 85% occupancy at a higher rate in San Francisco will not be doing as well.

"What gets measured gets managed" is part of Hilton's strategy (TQM) and tactical processes. The terminology they have developed has become to be known as the  "Balanced Scorecard" Corporate management, corporate owned and managed hotels and franchised hotels are affected. It is part of Hiltons long and short term strategy. All quality assurance is based on the data derived from performance measure data established from the type of work, the objectives achieved and the progress made. Nothing is left out. Anything which can be quantified is used for quality.

The Scorecard is put into an intricate reporting data system that each hotel is required to have bought and set up in order to maintain the Hilton image. Depending on the results, each person in the organization has incentives as motivational factors. Their performance and expectations are always an important part of the system. Hilton uses the data and statistics to judge results. TQM is based on inward performance and CEM is based on outward performance.

RevPar Index, Balanced Scorecard  and Brand Equity have been measured in the Hiltons across the world to judge customer satisfaction. Hilton started with Brand Equity with the use of Hilton Hotel 50 years ago. One of the earliest hotels was the Beverly Hilton. Brands with customer awareness and association with quality or consistency are effective equity brands. A customer knows in any Hilton hotel in the world, he will get the same type of service.  Now they have grown or expanded in using an additional H with  Hilton Hotel, HHonors program, Homewood Suites, Hampton. All under the umbrella of H. Measurements  of brand equity can be made but they are only approximations. Keller K.L., 1993

"Hilton's balanced scorecard  has enabled to quantify the quality of the daily growth and increased brand equity by quality control of the knowledge that one Hilton is the same from another. And in addition to share-of-market growth, non-financial measures show improvement, as well. Among company-owned and -managed hotels, current customer-satisfaction studies reveal strong increases in customers' opinions on overall satisfaction, their likelihood of recommending Hilton hotels, and their likelihood to return to a given property. The three factors comprise a measure of loyalty Hilton tracks closely--and that score recently reached its highest level ever. Hensdill (2009)

The scorecard tests cleanliness and conditions. Service standards are left to the individual hotel. ("News Release", 2003) The hotels are kept to the Hilton Way because of the internal data system of check and balance and statistical controls.

Whereas service has become an important part of today's industry to differentiate between hotel chains and establish customer loyalty, it is left out of the testing process of the quality assurance .(beverly)

Hilton Worldwide created an additional two section of the Balance Scorecard to include quality assurance and guest satisfaction for the Embassy Suites. They have surprise visits, inspections of kitchens, and guestrooms. Guests are asked to rate different services in the hotel. Everything is still quantified and nothing is dealt with on an emotional level. ("News Release", 2003) This is an indication that they rely on Total Quality Management.

Beverly Hilton is a privately owned hotel which only uses the point system of HHonors of the Hilton program. It was important to keep the name and have the brand equity of the "H" as the Beverly Hilton is one of the oldest post war hotels. As a private hotel, they are not required to adhere to TQM nor the Hilton Way. They use an external company for Quality Assurance and are  service oriented. Their managerial team uses customer experience management philosophy. Though they rely heavily on testing and auditing, they question every aspect of their operations. The voice of the customer is the priority of the hotel. The external company has their own quantitative tests of quality: research is done throughout the year in customer experience and motivation of  employees through reward and recognition, tools are established to train staff in customer service (experience); emotional audits, surveys, and surprise visits. Preparing for the yearly quality assurance audit, with LRA Worldwide, the Beverly Hilton is able to respond quickly and on the spot of  any deficiency found. Statistical studies are done using the CEM (customer experience management).("The Beverly Hilton",2005)

1. Comparison of CEM versus  TQM by Hilton Worldwide. Statistics of the effective on revenues between two types of management

- Motivation: services or needs

- Fidelity: emotional or location

- Emotions: necessity or pleasure

Control Chart to compare the fluctuation of RevPar per franchises during the holiday season

2. Though Hilton is top of the list in customer satisfaction, more can be done to change the Henry Ford chain line feeling that everything has to be the same. With a more customer orientated managerial system, Hilton hotels will seem more homely and less industrial.

3.  Hilton keeps up to date with the various national tests. They are at the top of the list of most of its competitors: brand equity: (Equitrend study)

Guest satisfaction is the highest for the past three years with the Customer Satisfaction index (ACSI)("Big Gains",June 2010)

They have internal testing of the higher end hotels and statistical analysis of the whole network: balance scorecards ( The internal functioning of the hotels are up to the owners of the franchisees. As the expectations of the financial goals are high, the entrepreneurial attitude does not allow for a low level of workers' performance. Motivational compensation in financial awards is given for those who meet set goals. The whole system is based on financial success. Though guest satisfaction is the highest in the industry, it is based on American statistics. Brand recognition is becoming more and more important as globalization is without borders.

 

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