Consultancy Report Case Study

Introduction of Consultancy Report Case Study

Consultancy refers to a professional service of firm that furnishes expertise on certain problem of business in exchange of fee. In business, consultancy plays an important role to solve different kinds of problem that arise within business such as marketing strategies, enhancing process and so more. Consultants give a fresh perspective on current challenges and provide recommendations for new solutions. The present report will base on the consultancy services provided to the Hilton Americas of Houston that faced a problem of high cost of operation due to of technical advancement and use of sustainable practices within the business. Hilton is a multinational hospitality company of America that franchise and manages a wide portfolio of resorts, hotels and timeshare properties. Hilton Americas of Houston is established in 2003 in United States. Hilton operated worldwide on 7530 locations. Hilton Americas of Houston is one of them. It globally employed approximately 178,000 people globally during the year 2023 Hilton Worldwide Holdings employees. 2024. In 118 countries, Hilton available room number is 1,182,932, the average size of Hilton room in America is around 325 square feet. In addition, the Hilton America of Houston has 1207 rooms that designed in such a way that it provides convenience to customers (Hilton`s America- Houston. 2024). Each room of the hotel has a modern amenities as well as decorated with the vibrant murals that are created by local artist. It has different kind of rooms and suits such as King bed studio room, King bed deluxe studio room and so more.

Figure 2: Hilton

Further, the Trip Advisor is an American Organization that operates an online travel agencies. The company furnishes travelers with effective reviews of the hotel, tourism activities as well as restaurants so that they receive positive guidance before booking their travel. The purpose of trip advisor is to deals on accommodation, reserving table at delicious restaurant and discover best places (Rahimi et al, 2022). The consultancy works with the client with dynamic organizational and technical challenges to attain the needed business outcome via strong delivery of the leadership as well as technology expertise. The consultancy firm aids in provide guidance to Hilton to overcome its business challenges that impacts its profitability as well as tourism experience.

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The present study outline the theories and framework used to evaluate the issue of high operating cost within Hilton. To analyze the problems PESTLE analysis used to identify the external environment of business that impacts the current operation of the company. Intention of using PESTLE analysis is to understand wider business environment as well as identify business threats that is reason for company`s issue as well as taking appropriate action to minimize the impact. Further, SWOT analysis will use to evaluate internal business environment. It is a tool to identify business own strengths, weakness, threats and opportunities and accordingly recognize cause of business problem and prepare a business plan to overcome the problem to remain advantageous in the competitive environment. The tools help the business in doing strategic planning and remain ahead in the market trends. In addition, TOWS analysis is a planning tool, use to strategize for future challenges and initiatives. The intention of using the tool is not only recognizing but also searching for effective strategies that declines business problem and threats and aids in taking advantages of the opportunities. Consultancy firm by using the tool effectively identify the cause of problem and aids Hilton by suggesting effective solution to overcome with the issue.

The report will highlight recommendation for the Hilton to overcome their issue by suggesting ways of improvements while using the change management theories. The theory aids the business to implement change in efficient as well as effective manner. It will also provide a action plan to implement the solution in the effective as well as efficient manner so that Hilton able to increase its profitability significantly to mark its presence as a top hotel in America as well as globally.

Analysis

The Hotel faces a problem of high operating cost. Operating cost includes expenses of house-keeping, front-desk staff, laundry, cost of food and beverages. In addition, it also consist repairs, maintenance, property tax, rent, insurance, cost related to sales, marketing, operating spas, recreational facilities and so more. Hilton reported operating expenses $ 2.23 B for its fiscal quarter in June 2024 that is increase by 179 million as compared to earlier (HLT - Operating Expenses. 2024).The high cost of operating impacts the Hilton productivity as well as profitability, it leads to decline rate of increment of the profit margin within the business. It is important for the Hilton to keep its operating cost in control because high profit margin as well as wasteful practices leads to decline profit margin as a result crucially impacts financial health as well as ling-term viability of the business (Yenidogan, Gurcaylilar-Yenidogan and Tetik, 2021). 

The main cause of the high operating cost as under:

• Lack of appropriate management: Hilton management is quite ineffective which leads to make the duplication of the work as a result company operating cost increase rapidly (O’Mahoney, 2021). For instance, lack of proper management leads to create difficulty in handling inventory and raw material at hotel, due to greater use of perishable items, various food wastage occur, leads to increase cost for the company.
• Marketing activities: Hilton operate its business in a competitive environment as a result it become crucial for the company to make huge investment on the marketing activities such as search engine optimization, influencing marketing, building campaign, all this required high amount of finance that leads to increase company operating cost (Feinberg and Zanardi, 2022). Current company to paid advertising, collaboration and so more leads to become significant reason for increasing cost of the company.
• Employee turnover: High employee turnover are also cause of high operating cost. It is large level organization, required large manpower for completion of particular task within a hotel. Recruiting new employees and providing them training is expensive correspondingly increase company operating cost (Toksöz, 2021). In addition, continuous expenses such as hotel workers wages and compensation increase cost for the business.
• Utilities and paying of taxes: Hilton operates its business on large area as a result have to bear expenses related to the maintenance, paying electricity bills as well as property taxes (Goh et al, 2022). This leads to increase cost of the company as a result impacts hotels profitability especially at the periods of low demand.

All this causes needs to address by the company to maintain its profits margin effectively.

PESTLE ANALYSIS

This tool aids the business to identify its external environment which impacts its operation in the business. Pestle analysis of the hotel includes:

• Political factor: Good relation within the countries makes easier for the Hilton to do business with ease. For example, strained relationship leads to become the reason of bans and restrictions, impacts Hilton to perform its operation (Pizam et al, 2022). For instance, trade and tariffs leads to increase cost of importing goods including hotel amenities and food items as a result Hilton`s operation cost increase.
• Economical Factor: It includes factors such as interest, inflation rate, exchange rate, economy growth and so more. For instance increasing rate of the inflation raises cost of the operation for Hilton from salaries to supplies (Dai and Han, 2022). Also, economic downturn leads to decline customer disposable income as a result demand for Hilton decline, impacts profit margin (Zhang et al, 2020). Further, high employment rate benefits Hilton as it aids in increase disposable income of people as a result customer plan for vacations.
• Social factor: Currently taste and preference of the consumer changed. Modern travelers become more eco-conscious. Growing preference for eco-friendly tourism makes essential for Hilton to incorporate green practices to attract large number of tourists (Hilton et al, 2020). Also, growing health and wellness trends makes Hilton to offer services like spa, fitness, centers and nutrition food options, increase cost but also aids in attracts wide range of tourists.

Figure 3: PESTLE analysis

• Technological Factor: In the era of digitalization, the company invests huge amount in technology use such as artificial intelligence, automation, internet of things, virtual reality, augmented reality and so more for effective management of operation, personalized customer experience and so more (Pizam et al, 2022). Technology use required maintenance as well therefore it leads to increase company operating cost too. During 2023, Hilton ICT expenditure was estimated at $ 639.4 million for purchasing hardware, software as well as ICT services (Hilton Worldwide Holdings Inc – Digital Transformation Strategies.2024). In addition, technical advancement positively impacts the company to enhance its customer services. For instance, Chabot aids the Hilton to effectively and immediately answer the queries of the tourists, which aids in create good image among the customers (Yang et al, 2021).
• Environmental factors: Currently, government imposes several environmental regulations to overcome the negative impacts of hospitality sector. Hilton needs to consider this rules and regulation and include eco-friendly practices such as waste management, reduce, reuse, recycle policy to work according to the rules and regulations (Hilton and Platt, 2020). Currently, to decline the environmental impact company strives to decline unnecessary wastage in operations as well as supply chain. Company set a goal for 2030 to decline food waste reduction, removal of single use plastic and many more so business can operate in sustainable manner as well as reduce adverse impact on environment.
• Legal factors: It is important for the Hilton to compliance with the labor laws related with the minimum wage, working hours and benefits as well as workers rights. Non-compliance leads to makes the company to pay the penalties as a result harm brand reputation of the company (Jay and Hilton, 2024). Also, company has to follow rules of health and safety to ensure the wellbeing of the staff and guests. For this important to include services such as fire safety, hygiene standard as well as food safety. The adherence of the law sometime increase cost for the company (Hilton and Arkorful, 2021).

SWOT ANALYSIS

The tool used by the business to identify its strengths, weakness as well as threats and opportunities. SWOT analysis of business is as under:

Strengths:

• Diverse and powerful brand portfolio: One of the strength of the Hilton is extensive portfolio of the hotel with well-known brand. Hotels wide range of portfolio offers luxury facilities to customer leads to help the business to satisfied needs of the customers (Rocha, 2021).
• Innovation and Technological leadership: One of the strength of the Hilton is using technology to innovate their services, The Company using technology aids in enhancing customer services which improve customer satisfaction (Root, 2022). The use of technology enhance operation, furnish guest with ease and personalization during their stay.
• Corporate social responsibility: Strength of Hilton includes dedication towards the sustainability and corporate social responsibility. It aids the business to decline environmental footprint, leads to enhance brand image and reputation of company (Zientara et al, 2020).

Weaknesses:

• Extensive workforce: Hilton has large workforce approximately 178000 employees globally and the Hilton America Houston employes 1000 employees which is crucial for success of hotel. Managing such a large workforce is costlier for the company. Salaries usually increase the operational expenses, leads to decline profit margin (Toksöz, 2021).
• Limited Ownership of Properties: Hilton operates its business via financial agreements and management, means it own little properties as compared to its competitors (Hilton,2024). This limitation of ownership controls the hotel operations as a result impacts its brand standards.
• Negative customer review: Consumer reviews significantly impact the customer perspective towards the hotel. Hilton received negative feedback regarding the poor customer services and atmosphere (Dharel, 2021). This weakness of company significantly harms hotels good reputation (Zhu et al, 2021).
• Seasonal demand: Seasonal changes significantly impacts revenue of the Hilton due to changes in the travel and tourism trends. During May to September, Hilton had several customers as it is a peak time in USA (Hilton, Davidson, and Scott, 2020). On the contrary, on other months due to lack of customer, company faces difficulty in meet daily operations expenses.

Opportunities:

• Expansion in emerging markets: Hilton has opportunity to expand its business in the emerging market like Asia-Pacific, Africa. The opportunity aids the business to grow its business more and earn more profits (Zeng, 2021).
• Leveraging technology and personalization: Hilton opportunity includes investing in technology to enhance guest experience or streamline the operation. AI and automation aids the business to reduce is cost as well by decline duplication of the work (Kumar, Ramachandran and Kumar, 2021).
• Focus on sustainability: Implementing sustainable practices aids Hilton to be distinguish different in the competitive market as well as decline cost of operation (Hilton and McCann, 2022). It aids the business to grab eco-conscious customers.

Threats:

• Economic uncertainty: One of threat to Hilton is economic crises, it leads to decline travel demand, reducing hotel occupancy rates and room tariffs (Aitken-Fox, 2022). This uncertainty leads to serious threat to demand of hotel as a result impact its profitability.
• High competition: It faces stiff competition from Marriott and Hyatt as a result increase price wars, increase pressure on profit margins and decline market share (Linxi, 2021).
• Regulatory and legal challenges: Hilton has to adhere rules and regulations of government, changes in his including employment, tax rate increase Hilton operating expenses and block its expansion plans (Zeng, 2021).

Tows Analysis

It is a planning tool used to evaluate business`s threats, opportunities, weaknesses as well as strengths. It unable Hilton to effectively strategize future challenges as well as initiatives.

Recommendations Abd Change Management

Hilton is a leading company in the hospitality sector of Hilton. It is crucial for the Hilton to decline its issue of high operating cost by taking corrective actions in the appropriate manner. The recommendations are as under:

• Use of sustainable practices: One of the reasons of high operating cost includes utilities expenses such as electricity, water and gas bill. It is recommended to Hilton to use sustainable practices such as energy saving lights like LED, energy-efficiency bulbs as well as solar power to generate electricity in the cost-effective manner (Voulvoulis et al, 2022). In addition, Hilton should install an occupancy sensors that ensures automatic turn off of light when guest leaves the room, decline unnecessary consumption of energy. Also, Hilton should focus on utilizing solar heaters to heat pools of hotels, declines dependence on traditional energy sources and reduce utility cost. Implementing the sustainable practices within all portfolios in America helpful in declines operating cost in significant manner. Company must focus on this as it significantly helpful in decline operating cost of the company (Mbise and Ishika, 2023). The success rate of the recommended strategy will be measured by evaluating the cost after implementation of sustainable practices, if Hilton witnessed decline in cost, than it means it is one of successful strategy (Luderer et al, 2022). To implement the strategy Hilton can generate approximately $20000 as Hilton`s operations are wide.
• Optimization of labour cost with training and scheduling: It is recommended to Hilton to minimize employee turnover by offering effective training as well as competitive wages and benefits to employees. Also, to decline employee turnover company should provide timely training to employees aids in optimize labour cost (Cho et al, 2023). To decline employee turnover as well as to decline the operating cost, Hilton should focus on using non-financial incentives such as appreciation, praise and recognition to employees to motivate them for their efforts in the company (Alsharari, Alomari and Alnesafi, 2020). Thus, enhancing onboarding experience as well as offering competitive advantage can aids Hilton to retain valuable staff correspondingly decline cost of operating business.
• Limits cost of marketing: It is advised to Hilton to limits is cost of marketing as it is one of the major reason for increasing operating cost of the business. Hilton should focus on using cost-effective marketing such as social media marketing, it is the best way to attract each age group people towards the business (Kushwaha et al, 2020). Company by posting images, videos and information about their products and services can attracts wide range of customers. In addition, company must used its own website to market its products and services as customer first review website of company before making their purchasing decision. For marketing purpose, Hilton should take online survey to gather customer reviews as currently customers attracts towards a product and service by addressing reviews of other customer. Thus, marketing in cost effective manner through social media and company website is helpful in decline cost of business (Dolega, Rowe and Branagan, 2021). In addition, it is crucial for the Hilton to establish a budget for marketing as well as advertising projects for decline chances of extra spending. It is important for Hilton, to advertise based on demographic of audience (Kolobkova, Romanov and Frolova, 2021). The recommendation of social media marketing occurred cost to Hilton related to hiring an social media experts that is $1500 per month and maintaining account include cost of $500. The success rate of cost effective social media marketing measured by evaluating how well company increase its revenue and grab more customers.
• Leveraging cost-saving technologies: Hilton must use a cost- saving technologies such as automation within the business. Investing in automation aids employees of the company to smoothly run day-to-day operations, enhance productivity and decline operating cost for the business. Company should use IoT sensors and devices to automatically adjust cooling and heating of room, water temperature leads to aids organization to save (Stringam and Gerdes, 2021). Hilton must invest in purchasing custom software that leads to automate booking, check-in , check-out, billings, housekeeping as a result decline greater requirement of the manpower correspondingly declines labor cost, hence, reduce cost of operation of business. Using cost –saving technologies minimally cost the company average $ 15000 and the success rate of recommendation measured with the help of reviewing the cost of operating different function within a company (Cobanoglu et al, 2021). If cost decline after using cost-saving technology then it means using technology is successful in decline cost of the business.
• Control food and beverages: It is recommended to Hilton to control its food and beverages section in effective manner to decline cost of operation. Hotel industry is responsible for producing 79000 tons of food waste annually, result in increase in kitchen waste budget as 20% (Katuwal and Afzal, 2022). Therefore, Hilton should monitor how much guest likes to consume food and beverage and according to this must decline plate size if guest leave food waste (Vasilakakis and Sdrali, 2023). To decline food waste Hilton must create a menu where it can use same ingredients in other disease, helpful in decline waste. To measures success of the recommendation company review the budget after implementing suggestion, decline in waste represent effectiveness of the recommendation, crucial for declining the cost of the operation of Hilton (Amicarelli et al, 2022). To implement recommendation small cost may incurred to company that is 1000 dollar to monitor wastage of food within the business.

These all recommendations aids the company to decline its operating cost effectively aids in enhance company`s profit margin. It is crucial for remain advantageous in the competitive environment.

Change management

Hilton faced the issue of increased operating cost that has adverse impact on profitability and competitiveness of the firm. To mitigate this issue, the above mentioned recommendations related to offering training to employees and adoption of sustainability practices will be implemented through application of Kotter’s 8 step change management model. This 8 step change management model offers an easy to follow roadmap for Hilton by which it can overcome the issue of increased operating cost (Iskandar, Saon and Chandra, 2020). The following stages of Kotter’s change management model are as follows:

Figure 4: Change management model

• Step 1: Creation of urgency sense: The first step of kotter’s change management model is initiate the urgency of change within organization as it sparks influence and initial motivation among employees to implement process of change management. For instance: Hilton can showcase the real world example of other competitors that adopted the sustainability measures and training programs to mitigate increased operating cost issue (Graves et al, 2023). This will enlighten the spark among employees to adopt change management in successful and effective manner with less resistance.
• Step 2: Formulation of powerful coalition: This step guides powerful coalition on diverse range of people that emerges as support system to change management such as supervisors and managers within effective change leadership. For instance: Hilton can establish an advisory board for successful change management related to adoption of sustainability practices and offering training to personnel with the establishment of strong coalition with managerial heads.
• Step 3: Creation of change vision: Plan of change initiative starts with the development of strategic vision of change management as it outlines deliverables and milestones to be achieved (Mouazen et al, 2023). For example: Hilton can build strategic vision for the implementation of change management plan related to the implementation of suitability practices (Dani, Tiwari and Negi,2021). Strategic vision based on change management further guide and influence employees to adopt change in positive manner.
• Step 4: Communication about changed vision: The fourth step of Kotter’s change management model guides about effective communication practices for implementation of successful change management. Change must be supported and understood by the organization’s personnel through effective communication. For instance: Hilton can communicate with its leaders and employees about adoption of sustainable practices that helps them to understand the need of change (Furxhi, 2021).
• Step 5: Empower action: This step is associated with empowering of change action with identification and mitigation of potential barriers to change management (Matteucci, 2020). Further it emphasises on reduction of obstacles or barriers by taking prior initiatives before implementation of change management process. For instance: Hilton can identify barrier related to change resistance and take adequate measure such as offering training to its employees for the successful adoption of sustainability practices within organization.
• Step 6: Creation of quick or short-term wins: Kotter’s sixth step comprised of encouraging and motivating employees throughout the process of change management with recognize and rewarding them. Further, it is concerned with the celebration of achievements and short term wins (Jia et al, 2022). For example: Hilton can set achievable milestones on the achievement of which an employee is awarded with financial incentive. This will encourage employee to perform in its best possible ability towards the success of change management within organization.
• Step 7: Building on the change: Implementation of successful change management is defined as a continuous process that has vital impact on building of vital image and competitiveness of an organization. For instance: Hilton can establish strategy of change management for the entire firm that comprises of creative change initiates, change ideas and measures for successful implementation. Moreover, gather feedback from employees and managers on the project of change management offers valuable insights to top management as a continuous process (Reidhead, 2020).
• Step 8: Make it stick: This step involves with fully adoption of change management through behavioural change that are deeply rooted with the processes and culture of organization. For instance: Hilton can change its employee’s behaviour through offering them training and development programs to enhance their knowledge and skills in change management. 

Benefits of using recommended strategies by Hilton

Recommended strategies of providing training to employees and adoption of sustainable practices can offer multiple ranges of benefits to Hilton, which are as follows:

• Minimized operating cost: Providing training to employees leads to minimize cost of labor through reduction in labour turnover, results in elimination of need of hiring additional staff (Cardoso, 2021). Further, trained employees can help Hilton to minimise its additional cost of recruitment and hiring of staff. Besides that, adoption of sustainability practices is beneficial for Hilton as it reduced utility and electricity bills along with disposal cost, results in reduction of operating cost.
• Improved organizational profitability and competitiveness: The recommended strategy of implementation of sustainability practices and offering training to employees leads to promote economic growth of organization (Elina, 2023). For instance: providing training to employees leads to enhance knowledge and skills of employees, results in improved performance that has positive impact on organizational profitability. Besides that, using sustainability practices is beneficial for improving competitiveness and brand image through promotion of environmental and social benefits.

Action Plan

An action plan is an essential document that includes list of steps that needs to be taken to attain particular goals. The action plan breaks down the goals within actionable steps that can be easily adhere and tracked. The action plan aids Hilton to do effective planning to implement the recommended strategies in correct manner to decline the problem of high operating cost within the business. The action plan is as under:

Conclusion

As expressed, the consultancy services play an important role to professionally support the company to evaluating and solving practical problems of the business. The present study based on Hilton a leading hospitality company Of America. The organization makes collaboration with the Trip Advisor to get consultancy services regarding the high operating cost in the business.

The consultancy report helped Hilton to manage the problem of high operating cost more efficiently by taking the corrective action in the significant manner. The issue make difficult for the company to smoothly operate its business as well as effectively enjoys its profitability in the competitive environment. The report analyzed several causes of high operating cost within Hilton includes high employee turnover, lack of proper management, high investment in marketing activities as well as greater expenditure on utilities.

In addition, the report outlined analysis of PESTLE factors that contributes significantly to the problem of high operating cost such as bad relation with other countries make difficult to import goods, leads to increase cost, changing preference of consumer increase demand for wellness, spa, gym and other services, technological changes makes mandatory to do huge investment for technological advancement leads to contribute in enhancing cost of operating business. The report executed SWOT analysis an evaluated that powerful brand portfolio, innovation and technological leadership and corporate social responsibility is strength of the company. On the other hand, it is recognized that extensive workforce, negative customer reviews and seasonal demand are some of weakness which significantly impact the problem of high operating cost.

Moreover, the report included recommendations such as focus on cost-effective marketing strategies like social media marketing, improving labor cost with proper scheduling and training to overcome the problem of high operating cost. In addition, the recommendation also stated use of sustainable practices such as using cost-efficient energy bulbs, LED, occupancy sensors, solar power to decline the expenditure on utilities. Also, one of cause of high operating cost is food wastage, thus it is recommended to monitor activities related to food and beverages top accordingly plan menu, aids in decline cost for the business.

To implement the recommendation within Hilton, it is important to include all employees for seamless transition. The company by using the Kotter`s change management model, effectively implement the recommendation within the business. Referring to the model company aware the employees about the urgency of change by represent the significance of sustainability measures to decline issue of increasing cost. Hilton prepare a team of expert for executing strategies, communicate about change within a company, take action, rewards to employees who give best to implement recommendation, taking feedback from all involved stakeholders and make the recommendation stick so that problem of increasing cost not occurred.

Apart from this, the report also furnish a action plan to solve the problem of Hilton in the effective and efficient manner by outlining the solution of each cause, desired outcome, cost incurred as well as time taken to complete the particular goal. It makes easier for the company to overcome its problem in the significant manner.

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Author Bio

Rebecca Jones   5 years | MBA

Hello, I am Rebecca and I have done an MBA from Edinburgh Business School. The experience gave me good exposure to learning writing skills. I have competed with many academic writers and proved to be among the best ones. I can help you write excellent business assignments as I know all the techniques to grab professors's compliments.