Published by MBA Skool Team, Last Updated: February 27, 2021
PESTLE Analysis of Hilton analyses the brand on its business tactics. Hilton PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as Hilton, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the Hilton PESTLE Analysis can be explained as follows:
Hilton hotels & resorts are one of the most popular global hotel chains. Political stability in the country becomes a very important factor as hotels need to cope with the political situation in various countries in which it is operating. If a particular country is not stable then people will fear to go to that country for leisure or work purposes which will reduce the number of visitors to that country and thus affecting the revenues of the hotel adversely. Hilton hotels operate in various countries so it is exposed to various political risks associated with the country. Like recently the UK has left European Union which will reduce the number of visitors visiting the UK and thus reducing the revenues of the hotel in the UK. Also trade war between various countries now will impact on the hostel operations and profitability. Also due to lockdowns imposed by various countries now have tremendously affected the hotel industry and so it is having a very tough phase now. But gradually many countries are also now easing their lockdown which will help the hotel industry to grow and increase their revenues.
Below are the economic factors in the PESTLE Analysis of Hilton:
Like any hotel business, Hilton’s business is defined by several economic factors.
Before starting a business in a particular country, a company must check the economic condition of that country. Economic factors impact the hotel industry in various direct and indirect ways. These factors are not in control of business but affect overall revenue of the business. It includes factors like interest rate, inflation rate, growth rate, GDP of that country. Hilton hotels have a chain of luxurious hotels so it should target the countries which have people with high disposable income. Also having a stable economic environment is very important for the growth of this kind of business. Due to COVID-19, many countries are having very low interest rates to incentivize the various investors to make investment in the country. Loans are available at very cheap rates than before. So, it can be a very good time for hotels to expand and diversify its business due to cheap availability of credit. Also, most of the countries are in slowdown due to nationwide lockdown, so the level of productivity is pretty low in the various countries across the globe. The pandemic has really affected the operations of the various businesses and thus people are left with less income to spend on various leisure activities which is definitely not a good factor for the hotel.
Following are the social factors impacting Hilton PESTLE Analysis:
Hilton hotels brand is very well known among international visitors. Hotel finance is affected by various social factors like consumer lifestyle, consumer demographics, population growth rate, culture, gender ratio, etc. With increase in income of the people their spending habits also change. So, their willingness to spend on leisure activities increases which is a good thing for the business. Also, as the lifestyle of the people across the globe is improving which is also a very good sign for the hostel profitability in the future. Due to COVID-19 people have fear interacting with various people and they prefer to stay at their home. They avoid various social gatherings which is a matter of concern for Hilton hostel. As a hotel, it does not have control over the social factors, so it can wait for the things to get better in the future.
The technological factors in the PESTLE Analysis of Hilton are mentioned below:
There is continuous improvement in technology in today's competitive world. A company cannot afford to ignore these factors to compete with various competitors. Hilton hotel must upgrade its technology wherein necessary for improving its value proposition which it offers to its customers. Adopting technology which disrupts the industry is very important as it may help company in reducing its costs and also at the same time enhance customer experience. Hotel should accept all modes of payments which is very important in today’s world of digitalization. Due to the rise of social media and development of various websites had helped customers to book hotels anywhere at any time at their convenience.
So, hotel bookings are now becoming more sophisticated so this factor cannot be overlooked by the business.
Following are the legal factors in the Hilton PESTLE Analysis:
Laws and regulation of the country really affects the operation of the hotel in which it is operating. Employee laws, customer laws and other legal framework should be followed by the hotel, so that it does not attract intervention of the government and various NGOs in the operations of the business. Legal factors are closely interlinked with political factors. Hilton hotel should have a close look at the various laws of the countries at which it is operating. Various laws are amended continuously so the firm should know these changes in law and can make the necessary changes in the business required by the law. Various laws have been also made by the government of various countries to tackle the problem of COVID-19 like to maintain social distance between people and also sanitize the hotel rooms, to stop the spread of the disease. These things have increased the cost of operation of the hotel and definitely affect the profitability of the company.
In the Hilton PESTLE Analysis, the environmental elements affecting its business are as below:
As people are becoming more sophisticated towards protection of the environment. They keep close check on which company is having proper waste management and what it is doing for the environment. Hotel businesses often become a point of criticism for polluting the environment. Climate change is a serious environmental threat for the Hilton hotels. Different countries have different norms or environmental standards which can impact the profitability of an organization in those markets. Even within the country different states may have different laws related to the environment. People now praise companies which take initiative to protect our environment. This also results in increasing the goodwill of the company which can be very beneficial for the company in the long term.
Hotels should take various steps toward saving the environment of the globe. This will also help companies in avoiding intervention of various NGOs and governments in the operation of the business. The hotel must look at the environmental factors closely to satisfy its various stakeholders.
To conclude, the above Hilton PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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