History of Hilton

Hilton Hotels and Resorts is a chain of full service hotels and resorts that are spread all over the world operating under the brand of Hilton Worldwide. Hilton Hotels & Resorts (2015) indicates that it is made up of a chain of at least 540 hotels in 78 countries spread across six continents. The company was formed in 1919 by Conrad Hilton, who bought the first set up hotel in Cisco, Texas. The Hilton hotels have been known to provide world class services in the hottest parts of the most popular cities in the world. Since its establishment, the company has developed over the years and it is currently benefiting from high levels of online sales. Up to date, Hilton Hotels are owned or managed or even franchised to independent operators by the parent company Hilton Worldwide. This plays an instrumental role in ensuring the success of each of these independent branches across the world.

Over the years, the company has placed its focus on leisure travel as well as business travel and this is one of the reasons as to why it is located in most of the city centers, near airports, and convention centers. The company has continued to undergo various transitions in terms of leadership which has seen it stand the test of time while some of its peers in the industry have waned away with time. According to Lietz (2010), the United States branch of the hotels was remerged with international properties; this was after a period of forty years. It took place after the US based hotel acquired the rights in Hilton Plc. in United Kingdom. Over the years, the company has been using one important brand message which is ‘take me to Hilton’ as the model for attracting customers all over the world. This is also indicative of the hotel’s desire to continually attract and retain its customers at any given time.

Reasons Why Hilton’s Stock Has Historically Traded Lower than its Competitors

Hilton’s stock has historically traded lower than its closest competitors, such as Marriot International. There are reasons for this low trade for Hilton. The first one is the fact that Hilton has been able to come up with a brand that can be described as excellent. Some of the brands that have made Hilton unique include Embassy Suites, Waldorf Astoria, Hilton Garden Inn, and Hampton Inn among other great brands. According to Lietz (2015), the other reason is pegged on the fact that the company has a flagship brand in Hilton which has had global brand awareness and it is based on the fact that from 1949 to 1967 the company was able to come up with internationally branded hotels in around 21 countries.

These countries include such countries as Spain, Germany, Turkey and Japan, whose economies had already picked up during that period. Lietz (2015) affirms that the company also owned as well as leased some of the most iconic hotels such as the New York Hilton, Hilton Hawaiian Village and London Hilton. The majority of their most profit making hotels are located in the popular cities that have high barriers to entry for most of the new hotels. It has given Hilton the additional advantage. The company also has the potential of growing even further since there are several up and coming countries, which would be a great destination for the company to test its ability to make more revenue and continue to trade at lower value than its competitors.

Strategies/Practices that Christ Nassetta Implemented to Improve the Company’s Preformation after he became a CEO of Hilton

Initially, Christ Nassetta was the CEO of Host Hotels and the decision to bring him into Hilton is seen to have been a brilliant one. It was his ability to execute any business plan that made Nassetta the most ideal person for the job. Lietz (2015) opines that the initiatives or most of the strategies by Nasseta revolved around business expansion and reduction of the cost. The CEO oversaw the change of the company’s name from Hilton Hotels to Hilton Worldwide. This was an indication that the business wanted to have a global appeal. Nassetta was responsible for the corporate reorganization of the company where four of the legacy businesses were integrated. It was also under his watch that the company was able to integrate the different business functional units both in the head office operation and in the global operations.

This was in line with the strategy, which was aimed at ensuring that costs are saved through reduction in duplication of duties within different business units. There were various cost saving initiatives that were implemented at the property level and this included effective staff level adjustments. Lietz (2010) explains that what the manager had in mind is that he had effectively projected up to $400 million in amounts that he could be able to save. It is with the new set up that it could be easy for the business to move forward with the international expansion goal and the M&F. The manager was able to understand that the business was operational in an industry that is highly seasonal and therefore it was vital that stability is forecasted and implemented, something that was effectively done. In the overall sense, Nassetta has taken the company to a different level in terms of profitability and operations.