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What Do You Think Hilton Leadership Should Do After The Blackstone Acquisition? Should They Further Invest in CRM or Simply Maintain The Status Quo?

Hilton leadership should maintain the status quo after the Blackstone acquisition. While further investing in CRM could raise customer expectations and satisfaction, Hilton's existing CRM program is still relatively new at only five years old. It takes time to develop customer loyalty in the hospitality industry, so Hilton needs to be patient and allow their CRM program to achieve economies of scale before increasing investment, which could reduce profitability. For now, Hilton should maintain their competitive advantage of integrated systems and brand management until it is no longer an edge over competitors.

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Aditi Pareek
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251 views1 page

What Do You Think Hilton Leadership Should Do After The Blackstone Acquisition? Should They Further Invest in CRM or Simply Maintain The Status Quo?

Hilton leadership should maintain the status quo after the Blackstone acquisition. While further investing in CRM could raise customer expectations and satisfaction, Hilton's existing CRM program is still relatively new at only five years old. It takes time to develop customer loyalty in the hospitality industry, so Hilton needs to be patient and allow their CRM program to achieve economies of scale before increasing investment, which could reduce profitability. For now, Hilton should maintain their competitive advantage of integrated systems and brand management until it is no longer an edge over competitors.

Uploaded by

Aditi Pareek
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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What do you think Hilton leadership should do after the Blackstone acquisition?

Should
they further invest in CRM or simply maintain the status quo?

In late 2016, Blackstone completed the sale of a 25 percent share in Hilton Worldwide Holdings
to China's HNA Group for a total of $6.5 billion. A substantial portion of Blackstone's interest
in Hilton has been sold in one of the most leveraged buyouts in history, with Jonathan Gray,
the chairman of Hilton and the head of Blackstone's real estate business, at the helm. Gray has
identified a highly ambitious Chinese company, HNA Group, that is using debt to buy
properties, notably in the tourist industry, according to Gray. At the end of June, Blackstone
announced the sale of 15 million Hilton shares for $1 billion dollars. As a result of the group's
NASDAQ IPO, split, and sale of 25% of its shares to the Chinese HNA, Blackstone has
maintained a financial separation from the hotel firm. If I were in charge of Hilton's
management, I would be concerned. It appears to me that Blackstone took advantage of a
favorable situation and utilized Hilton to its maximum potential.
While spending more and raising standards is beneficial, it also raises consumer expectations,
requiring you to invest more in order to satisfy a customer's needs, or else someone else will
do it for you. The fact that the CRM program has only been in place for five years, however,
does not make it seem like an appropriate time for Hilton to increase its investment in the
program. Consumer loyalty in the hospitality business takes time to develop and become
substantial. In order to achieve economies of scale, it is necessary to be patient. Investing more
in customer relationship management (CRM) at this time might reduce profitability. When
Hilton's competitive advantage of integrating their information systems and brand management
is no longer an advantage, the company should maintain the status quo and boost investment
levels. In the case of a new system, it might be prohibitively expensive, especially if employees
and information systems are still becoming used to the new capabilities.

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