Ms. Mockerman

Guest Service / Customer Experience Mgmt

Guest Service and Customer Perception

By Lily Mockerman, Founder, TCRM

When beginning the search for a room, guests already have certain ideas of the class of hotel they'll consider, amenities that they expect, and the price they're willing to pay. They also have an idea of how the room will be used, special considerations they will require, and how they want the experience to play out. Hoteliers need to be able to anticipate these guest expectations, even though the value perception for one guest is totally different than another, to be able to not only meet them but exceed them, and to align prices with the potential guest's budget.

As in so many industries, hoteliers must remain cognizant of the often-dramatic changes in customers' desires. Some of the major, recent shifts are the need for flexibility, knowing how technology can draw a guest, and replacing outdated amenities with local experiences. Let's explore what some of these trends look like in today's world.

Today's guest wants flexible check-in and check-out, guestroom furnishings which can be adjusted to the guest's reason for travel, and food and beverage options. I foresee this customer expectation of flexibility as changing a hotel day from the standard 3 p.m. to noon the next day, to booking by period - 24 hours, 12 hours, etc. The guest room landscape will also change to having flexible seating and flexible flat surfaces (tables/desks/shelving). Customer expectations have already changed the food and beverage area, resulting in options for lobby food and beverage service, grab-and-go offerings, and flexible hours of operation.

The luxury chains will be the first to adopt many of these expectations. Luxury properties must adjust to keep the top-paying guests satisfied, which then filters down through the scales as luxury sets the pace for emerging guest trends. As changes are adopted by upper or midscale classes, the change ripples both upward and downward as other chains rush to keep up.

In addition to flexibility, continuously updating technology is essential. In one survey, 65% of U.S. hotel guests felt that technology was key to their experience. When accustomed to being able to click through their day at work and at home, guests may not be willing to have to navigate their stay in a "pencil and paper" manner. Of course, free Wi-Fi is a given, but wider range access points and upgraded upload/download speeds are becoming the norm. In fact, Wi-Fi is such a basic expectation these days that perhaps some of the guests surveyed had not even considered it when contemplating "technology," leading to what would seem to be a low 65% rating. Today's traveler carries, on average, three to five devices, so the strength and bandwidth of the internet connection becomes essential.

For example, I was traveling for a conference and stayed with a major brand hotel. Unfortunately, they were having issues with their Wi-Fi, which brought my work, involving webinars and VOIP conference calling, to a standstill. I was forced to cancel the remainder of my reservation and pay more for another hotel in a heavily compressed city, simply to have access to these basic technological needs.

Even beyond Wi-Fi as a technology element, smartphone adaptability will be crucial over the next 24 months, and this expectation will be across all scales. Remember, every guest, regardless of class, has a smartphone. A guest will expect to do everything transactional via his or her phone. Shopping for, booking and checking into a hotel, opening their hotel room door, choosing activities during their stay, making reservations, messaging staff, or requesting other services, settling F&B and other bills, checking out - all will be an expectation before the end of this decade, and will touch all price points. Luxury properties, however, may consider going even beyond the smartphone technology to more of a "smart home" atmosphere. After all, luxury is all about convenience.

In the right property, "smart rooms," robot butlers and more could easily become the norm. Many hotels are racing to outfit their rooms with a Google Home, Amazon Echo or similar. However, it may not offer enough ROI to place a device in each room, but rather work with these vendors to create a more all-inclusive solution for their guest rooms. If voice-activated technology can learn to function more like a smart home and less like a personal service, this may very well become the norm.

Looking at the difference in travelers by scale, economy or mid-scale properties probably don't need to invest in the higher-end technologies such as tablets or voice-activated devices, unless they provide some type of cost savings, such as replacing frequently printed compendiums or menus. Staying on top of Wi-Fi technology is smart, because their target market is focused more on value and service than top-of-the-line amenities.

ROI for technology purchases has long been a tricky subject. It's important that whatever type of smart technology is being selected, there is also research and brainstorming done around how technology will result in a significant ROI for the property. This is important to each individual investment. In some cases, the answer may simply be that it allows you to stay relevant enough to stay in business. If you don't have what your competitor has, you will not get the guest to book. If you have better technology than your competitor, that may be the case for only months, or even weeks, before the competition adds the same or even better technology.

As Jeff Mayo, Director of Brand Services for TCRM pointed out, upgrading technology today is what having the best mattress was 15 years ago - a continual, ongoing, never-ending evolution in expectations and innovation. In some cases, however, like tablets or smart rooms, you can glean a significant amount of information from guest interaction to better understand what drives their purchasing behavior, thereby targeting offers and increasing guest spend. Of course, the technology must also be leveraged to its full potential.

While technology will continue to be more and more important, there are other trends that are now overrated. We have already seen this impact in guest room phones. At one time, hotels advertised and marketed their phone offerings, such as free local calls, cordless phones or bathroom phones. But these are now included in cell phone plans, so today's hotel room typically has just one corded phone, which is only used for calls within the hotel to the front desk, housekeeping, dining, or the valet.

Television options are also becoming less and less important. Cable and local channels, pay movies, and other features hold little significance in a guest's decision to book a room. Many guests never turn on their televisions. It doesn't matter if the TV is HD, curved, 3D or a big box. The guest has a tablet that accompanies him or her everywhere, with apps already loaded and favorites marked. The guest will not spend even a moment trying to figure out what channel has his or her favorite show or event. They already have the show or event ready to stream on their own device.

Hotels used to try to monopolize a guest's entertainment options by making it impossible to hook up a DVD player or computer to their TVs, driving them instead toward pay-per-view. While guests will readily make the choice to watch something on a smaller device rather than paying exorbitant fees for one movie, hotels could capture the interest of more guests by revisiting the idea of flexibility, advertising their televisions more like a "projector" to which a guest's chosen device can be connected, and his or her entertainment of choice can be displayed.

Jay Nazar, Director of Operations for TCRM, added that newspaper delivery to the room is another service that has become antiquated. These days, smartphones and tablets deliver the news much faster, with video and audio, tailored to a guest's interests rather than having the cumbersome experience of a large format with limited capabilities for providing what the guest wants, and that only within a given locale.

One amenity that is often downplayed is room service. A guest no longer needs to pay crazy fees and wait for 90 minutes for excellent food and beverage to be delivered to the room. Over the past decade, quality food delivery offerings have proliferated. Now that Uber is also involved in this arena, the days of room service are numbered. However, it is important to remember that many travelers still rely on the convenience of some type of service like this. For hotels that can solve this issue with quick-serve food and beverage, without the expensive hotboxes, tables and other elements, a portion of what we knew as room service in the past could still survive.

Providing local experiences is a cost-effective way to exceed customer expectations and garner additional interest. This is what will set apart the hotels that are willing to spend extra time and labor from those that aren't willing to push harder. These hotels will live or die based on their relevance to the millennial and boomer traveler. Both generations want to have a local experience. What is the hotel offering that will create a memorable experience for their guests? If they creatively market these experiences, resulting in the guest beginning their local experience during the booking phase, they will remain relevant and grow despite newer buildings and newer ideas.

For those hotels that are aging, it's important to embrace the culture. Frame the "old" properly, calling out unique features. For example, when visiting one very old hotel in San Francisco, there was an elevator system that to some guests was creaky and uncomfortable. However, it was one of the oldest systems in the city, so instead of trying to hide it as a weakness, we suggested they feature it in the history section of their website.

This not only set guest expectations and reduced complaints, but attracted history enthusiasts as well. Adaptive re-use is a growing trend, and the hoteliers that do it well are often the most successful, even more than the new-build properties in many cases. This is especially true when paired with a historic or artsy neighborhood, which further enhances the positioning as a cultural point of interest.

So how can all of these trends and options play into pricing to ensure that the options don't drive the price beyond what the guest is willing to pay? Reputation Pricing can play a part in knowing how to align pricing with guests' expectations. The industry has always done this. All industries have. As an example, look at the automotive industry. Brand reputation absolutely influences the pricing of one make or model versus another. The price of a Mercedes-Benz is validly influenced by its reputation.

While every property is largely responsible for managing their local reputation, many guests will come to the table with preconceived expectations before ever reading guest reviews on social platforms. The strongest brands have been able to command and maintain pricing power thanks to successful QA programs, and thus continually meet guest expectations for consistency of product. If I am going to order a Caesar Salad from the restaurant at the Renaissance, I know it will taste the same whether I order it in Denver or Dusseldorf. Thanks to this confidence in consistency, educated and well-traveled guests have a good idea of what they can expect when staying at branded hotels. It's been long proven that perceived value from the guest's perspective is the largest driver in a hotel's pricing power.

That being said, Jon Kinder, Senior Revenue Consultant at TCRM, noted that knowing where a hotel falls under the spectrum of expectations is a critical piece of establishing a baseline for its pricing power. While not unheard of, it's certainly unconventional for a hotel to price themselves against a brand with a much stronger reputation or in a much higher chain scale. Hotels with the most successful pricing strategies realize where their floors and ceilings are, based on public perception of their brand, and focus their efforts on tangible factors they can control.

This is where a hotel's local reputation comes into play, with service scores, preventative maintenance, regular and timely renovations, social media, etc. How a property performs in these areas will either confirm or rebuke a guest's perception of value in regard to the price they paid. For example, an older hotel in need of a renovation may not necessarily lose pricing power if they excel in service scores and have a "Wow" factor that impacts a guest's experience. Similarly, a new hotel won't always have the strong pricing power one may expect if they fall short in their service levels.

All in all, hotels with the most successful pricing strategies tend to "stay in their lane". However, traffic patterns change constantly, so sticking to cruise control won't always get you to your destination if you're not paying attention. Check your blind spots, pump the brakes when necessary, and don't be afraid to hit the gas! Avoiding wrong turns when setting a price point, however, is also crucial. The biggest mistake is the appearance that the guest is getting ripped off. Pricing must be transparent and must be simple. As soon as the guest thinks there is a disparity between various channels or their expectations, they feel violated and will not book. If they have already booked, they will cancel, and worst of all never return or recommend the hotel. As soon as there is any confusion, there is mistrust and regret.

Pricing decisions at a very basic level are always a result of supply and demand. Almost sold out? Take the rates up. Thanksgiving is a dead week? Take the rates down. Basic calculations, yes, but hotel revenue managers have a tendency to push the limits. (It's in our nature.) While these types of strategies can be effective if utilized properly, pricing yourself significantly higher or lower than the norm can have long-lasting negative impact on guest perception and market dynamics.

If a hotel decides on a significant pricing increase based on limited availability or strong demand factors, this will change a guest's expectations. The guest who is paying $249 for a room this week when they paid $149 for the same room last week will want to get their money's worth. If the hotel is unable to deliver the value the guest believes they should be receiving for what they're paying, this can not only cause some problems for the front of the house staff, but these guests are often inclined to also take their gripes to social media platforms. As we've all seen in recent years, bad reviews on sites like TripAdvisor or OTA channels can snowball quickly.

On the other side of the coin, pricing below a guest's expectations can be tricky to overcome. If the same guest who is used to paying $149 suddenly only pays $99 for the room, this is certain to raise some eyebrows. While it may be successful in the short term for building occupancy, this type of strategy will often create concern in the guest community. What's wrong with this hotel that their prices have dropped so dramatically? Just like in the stock market, this may cause people to bail out quickly as uncertainty rises.

Additionally, this slippery slope has the potential to change market dynamics among your competitors. Hoteliers always fear a "race to the bottom" when it comes to pricing, and for good reason. Many of us have seen it before; one hotel makes drastic pricing decreases and everyone follows suit. In some cases, this paradigm shift in market pricing can become the new status quo and it can take years to return to the original rates.

Focusing on discounts rather than taking the time to do appropriate marketing to sell the value of the hotel, or consistently discounting and therefore losing brand integrity as discussed above, are frequent issues in pricing. Another major pitfall is using the prior year as the only point for understanding where pricing should sit. Often, we hear even experts say that as long as the BAR rate is above last year's average rate for the same day, they're in good shape, but with each year performing less and less like the prior year, this can cause significant missed opportunities, both in driving rate and avoiding overpricing on times that occupancy needs to be enhanced.

Like many areas in the hospitality industry, perception of value for price is constantly evolving. This requires hoteliers to consistently be alert to new dynamics. Monitoring emerging trends in guest amenities and technology, understanding how to establish pricing according to amenity levels, and considering how guests perceive a brand or property, are crucial elements of success in today's revenue management world. In the end, the most successful hoteliers will be those that are flexible and adaptable - savvy investors in the technology and amenities that will really boost their pricing power. These properties, focused on educated adaptation, will enjoy a sustainable and solid brand presence.

Lily Mockerman, President and CEO, founded Total Customized Revenue Management in 2012. It has become the premier provider of revenue management services for the hospitality community. Ms. Mockerman is a devoted leader and practitioner in the revenue management field. She has developed strong analytical skills and experienced foresight, is technology-savvy in many hotel systems and can clearly communicate vision and strategy for her clients and team. Since earning her Bachelor of Science in Hotel Management from Johnson & Wales University, Ms. Mockermanís career has encompassed a variety of roles and responsibilities, including experience with Starwood Hotels & Resorts, Hilton Worldwide and the independent hotel space. Ms. Mockerman can be contacted at 623-536-7066 or info@tcrmservices.com Please visit https://www.tcrmservices.com/ for more information. Extended Bio...

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