Business of travel and tourism

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The purpose of this task is to describe the features of two different types of business organisation within the tourism industry. The business must be one from the non-profit making sector (public) and the other from the profit making sector (private) I have chosen Hilton Hotels Corporation as my first business (P1) they provide accommodation for many different types of guests and provide many different facilities from internet connections to wheelchair access for their customers. They are a profit making international chain of hotel.

A profit making organisation can otherwise be categorised as a commercial or an organisation which belongs to the private sector, the majority of businesses in the Travel and Tourism industry are apart of this commercial/private sector. Any private sector businesses’ aim is to sell their products and services successfully in order to generate enough profit to firstly help their business grow and develop. Hilton is a profit making organisation, we know this as they operate like any other privately owned business.

Their main aim is not to provide a service but to provide a service which will in turn generate a profit and good customer clientele. A private limited company is one where liability is limited; this means the company has a limit on how big it can grow, on how many shareholders it can maintain. The liability is limited to the value of the shares issued therefore if there were any debts the debts are that of the companies and not the owners (shareholders. )

On the other hand a public limited company (PLC) also has shares in their company however these shares can be bought by anyone in the general public from the stock exchange. Ownership is therefore available to anyone who wants to own shares in the company, there is no limit on the liability which the PLC owns. Hilton is a public limited company, it became this when it was formed and listed on the New York stock exchange in 1946, nearly thirty years after Conrad Hilton bought his first hotel in 1919 Cisco, Texas. The Hilton family has always had top priority in the Hotels’ business corporation

Each organisation within the travel and tourism industry whether it is Private or Public could have any amount of members due to the size of the business, A business which is formed by a partnership could have up to 20 partners legitimately, there would be less members in a sole trading organisation as this would normally be a self employed self set-up business which would usually be financed by loans from banks. The founder of Hilton hotels is Conrad Hilton and through the generations the business has been kept in the family until 1946 when individuals from the public could buy shares in the business from the New York Stock Exchange.

However even though the public could buy shares the Hilton family were still the single largest shareholders as they held 97% of the business until May 1999 when it was sold to Ladbrokes PLC through the London stock exchange. In July 2007 Hilton agreed to an all-cash buyout from The Blackstone Group LP in a $20. 1 billion deal that would make Blackstone the world’s largest hotel owner. Then in October 2007 Christopher J. Nassetta was appointed President and Chief Executive Officer of Hilton.

Shareholders- Hilton is a Public Limited company and this means that they have invited people to invest shares in their company. Providing these investors with a return is important to encourage further investment and therefore using company profits to re-pay shareholders is important on a regular basis. The people who have invested in Hilton over the years will have seen their shares grow as Hiltons’ profit margins have grown successfully and steadily, the more profit Hilton makes then the shareholders get more retuned money.

Retained profit- profits from a business can be used for their own personal use or can be used to put back into the business; this is often called ploughing back the profits. A retained profit is only available to a business which is already in existence, in the early stages of setting up a business it may be necessary to put a lot of the profits back into the business, this finance would normally be used to buy new equipment and more stock of products and services to hopefully make the business more efficient and profitable in the future.

For example, Hilton opened its newest hotel- The Hilton Garden Inn University Heights in May 2007, in the Albany area of New York, it can accommodate up to 200 people depending on the needs of the group. This is how they put their profit back into the business- by opening another hotel.

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