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The Problem with Being Hospitable

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April 03, 2016
Training | Guest Experience
Michael Schubach - Michaelschubach@me.com

Until we go completely self-service, we can’t ignore the human factor —— you remember, the service part of a service industry.

Have you heard the Hollywood cliché about the inherent conflict in the term show business? There is the “show” – the entertainment and artistry – and there is the “business” – the production, distribution and return on investment. “Show” and “business” are symbiotically dependent on each other: without art there is nothing to see; without a way to be seen, the art doesn’t exist. We have that same dynamic tension in the hospitality industry. Our lofty intension is to provide satisfyingly unique experiences and exceed the expectations of travelers who range from neophytes to world-weary road warriors. Our industry is like show business in that we have the same inherent conflict – we need superior service to be predictably delivered and sensibly priced. Without the service differentiators, we’re just one more bedroom/bathroom combination in an already-saturated market. 
It’s a daunting problem, isn’t it?  We pit memorable life experiences against everyday low prices, somehow expecting that both factions will triumph. This seems like a fine time to consider a strategy that calls for operators to invest in other less obvious factors in success.

The first step is to understand who our guests are, what they want and why they buy. To get started, let’s look at some metadata from the U.S. Travel Association. The USTA estimates that travel and tourism in the United States produced in excess of $2 trillion during 2014. This represents the spectrum of the U.S. market, including U.S. residents as well as international visitors, whether traveling on business or for leisure purposes. The $2 trillion figure includes spending within the travel and tourism industry (direct sources) as well as in derived activities such as shopping, fine dining and entertainment (indirect sources). In this analysis, leisure travel represents approximately 70 percent of the total direct spend; business travel contributed the remaining 30 percent. The industry also generated more than $141 billion in tax revenues and supported more than 15 million American jobs. 
If the USTA tells us about volume, then The 2014 Traveler’s Road to Decision, an analytical study commissioned by Google, tells us how and why travelers make the selections and arrangements they do. By looking at the importance of features when choosing lodging accommodations, we see some concrete data for what we have always known: the purpose for travel changes the appeal of a hotel’s offerings to its guests. (See sidebar pg 26.) Understanding the differences between business and leisure travel is important in serving those markets, but what can be learned from their similarities? What emerges are the basic barriers to entry that formulate a guest’s go/no-go decision on a booking: 

All guests want/need/expect fair price value, which is not the same thing as the lowest price. Consumers shop in categories that range from budget through ultra-luxury – that’s why all the major hotel chains offer a variety of brands of differing service levels. The absolute dollar amount is less important than the perception that the guest is getting appropriate value for the money being asked. 

All guests want/need/expect convenience, particularly a location that conveniently suits their travel purpose. 
Beyond that, convenience translates into a variety of different ways that an establishment makes itself easy to do business with: fair and accommodating reservation change and cancellation policies, easy-to-use websites, readily accessible reservation channels and mobility/smartphone enablement for research and communication.  

The upshot is that the hospitality marketplace no longer competes on basics; a hotel either makes the grade or it doesn’t, and therefore is of interest or it’s not. Ranking higher than promotions, online reviews and the availability of specific accommodation options is “past experience with the lodging establishment.” This feels like one of those intentionally vague responses that conjures something specific to each individual respondent but can mean practically anything across the spectrum of the study. Past experiences are clearly important, but what isn’t at all clear is what exactly they are. Is it promise fulfillment? Friendliness? Efficiency? Cleanliness? Does this represent consistently good service or merely the absence of a single horrific event? Can one night’s lost sleep, a fumbled reservation, an indifferent attitude or botched vacation plan undo years of reliably delivered services? Consumers tend to give service providers the benefit of the doubt and the opportunity to recover if they do the right thing to remedy a service discrepancy.
Nonetheless, good service typically allows the provider the opportunity to compete for future business; unrecovered bad service can close the door to opportunity forever.      
What also emerges from the study’s data is what surprisingly doesn’t matter: brand loyalty and travel perks. For those of us in the industry, this flies in the face of conventional wisdom. Of course everyone wants the freebies and the perks, don’t they? After all, it’s nothing more than enlightened self-interest, and God knows that we all know professional travelers who value rank and status far above price and convenience. But according to the report’s data trends, those folks may be your outliers rather than your bread-and-butter sources.            
Obviously business travelers care more about points and perks than leisure travelers do. Business travelers rated them their 9th most important consideration out of the 10 listed; perks didn’t even break into the top 10 for leisure travelers. Some good news: the study reports that 65 percent of business travelers belong to a loyalty program. The not-so-good news: business travelers were asked if they were less likely to plan travel based on programs or points this year than they were to last year. Forty-one percent of the 2014 respondents were indeed less likely to use points to plan their travel, up from 38 percent in 2013 and 36 percent in 2012. The even worse news: brand loyalty by means of rewards program participation is far less sticky than you might imagine. According to the study, a whopping two out of three loyalty club members are open to switching to new loyalty programs if they offer a new, different or unique experience, or make earning rewards easier or faster. 
Besides loyalty club impact trending down, brand affinity is less important than most of us realize. Those of us inside the industry tend to raise eyebrows at that. We as high-frequency hotel users who likely have more experience across chains and brands, and understand the nuanced differences, tend to exercise deliberate preferences when booking. Not so the respondents in Google’s survey. Business and leisure travelers were asked to rate their certainty of specific brand use in booking. Sidebar 2 shows the results.

Certainty of Specific Lodging Brand to Use                        Leisure    Brand
"I am absolutely sure of which brand I want to book."       16%      28%
"I am considering multiple brands/companies."                  65%      60%
"I am totally undecided."                                                       20%      12%

The "up for grabs" factor:                                                      85%      72%

Of leisure travelers 85 percent are willing to consider booking factors other than brand as they prepare to secure accommodations, and their business counterparts, the more loyalty-aligned group, are not all that far behind. If we apply the USTA’s 2014 market estimate that 70 percent of the total direct travel spend is leisure based, the blended “up for grabs” rate for the entire business and leisure market exceeds 81 percent.  
Speaking of overestimated impact, let’s say hello to social media. Yes, the influence of social media, particularly video, is on the rise in travel inspiration and planning. However, it pretty much brings up the rear as far as being a purchasing influencer. For those unfamiliar with a particular location, user reviews provide anecdotal evidence that the hotel might just be what they say they are, but beyond that, opinions from unknown sources of questionable credibility is of realitively limited interest.
Let’s recap: A successful accommodations provider must provide all the basics – price value, acceptable location and reasonable levels of convenience, comfort and service. Leap those hurdles and congratulations, you’re one of many with no particular point of differentiation. Your brand affiliation isn’t a golden ticket.  A rewards program helps you sell to the business travel segment but it’s not the draw it used to be. Given all that, how does the 21st century hotel differentiate itself and command a greater share of the market? 
There is no doubt that technology provides the greatest opportunity for business establishments to differentiate themselves from their competition. It probably won’t surprise anyone that the Google survey pointed out the tremendous impact of technology within the hospitality industry. Guests want more unfettered access to planning and booking, with significantly more smartphone access so guests can make on-the-fly and off-the-cuff arrangements, referred to as “snackable moments” to quote the bard. The future is bright for self-service planning and booking, and for the digital entertainment and communication that takes place before, during and after the travel event itself. Not surprisingly, those services and organizations that are not keeping up with technical innovation are being punished for it. Users who have a poor mobile experience have a tremendous negative impact on the brand:  retaliation includes using a competitor’s site (20 percent), complaining about the experience on social media (13 percent), stopping the use of the brand altogether (13 percent) and telling friends and family about the problems (19 percent). 

In our industry, an abundance of dependable, accessible guest-facing applications are a very significant part of the puzzle. However, until we go completely self-service, we can’t ignore the hospitality's human factor – you remember, the service part of a service industry.
Hand-in-hand with technology, we’re every bit as reliant on terrific – and terrifically trained – guest-facing people as we are on guest-facing applications. We need them to provide those exceptional experiences that rank as No. 3 or No. 4 (depending on your reason for travel). We need them to leverage those very significant technologies that are present and planned but aren't self-serve. We need them to deliver the promise of hospitality here in the hospitality industry.
Unfortunately, we’re seeing another 21st century trend that runs counter to that effort: this is the era of the disposable worker. Ever since our great recession, American employers, facing uncertain business circumstances and a continual rise of employee-related costs, have been steadily moving away from full-time staffing in favor of part-time employment. Company gains are two-fold: employee benefits are not provided to most part-timers, and part-time workers are typically hired at a lower starting rate. Many employees who accept such arrangements are “involuntary” part-time workers, meaning that they would prefer full-time employment but are forced to settle for underemployment. 
Sadly, underemployment causes a ripple effect that runs through the service industry at large, with demonstrable side effects felt well beyond hospitality alone. Increasing the part-time employee ratio increases the employee headcount even if the full-time equivalent (FTE) count remains the same. More people working fewer hours means that on-the-job training takes a longer calendar time to bring individual employees up to speed, and much longer for them to experience the infrequent transactions. That nets out to more people on duty who are less likely to be as efficient as full-timers.  
And it just gets worse. As part-time labor becomes (or is perceived to be) cheaper, the training investment required makes less sense from the business perspective. After all, why invest heavily in cheap (and probably temporary) human assets? Follow this line of thought to its logical conclusion and it results in a downward spiral of dwindling on-staff expertise. Now look at the problem from the underemployed employee’s perspective: work schedules are typically more volatile and unpredictable, which can drive transportation and child care costs up; employee earnings are less than expected or needed. Prospects for betterment seem limited by company policy. Less training leads to more mistakes, a higher level of job frustration, and a general perception throughout the organization that qualified help is just too hard to find and recruit.
Is it any wonder that the better part-time workers bolt for greener pastures the moment another opportunity arises? That results in higher turnover and the added costs associated with training replacements. The very predictable final outcome is less competent, less productive workers on duty with lower employee morale. And then the disposable cycle begins again.
In the case of the hospitality industry, or a hotel front desk specifically, what sort of responsibilities might sparsely trained, part-time employees have within their purview? Here are some examples:
  • Compliance with safety and emergency procedures: How many employees have been through fire drills, accident safety training, evacuation procedures and threat response?  These are areas often not well or frequently communicated to full-time employees; part- timers don’t usually know the requirements.
  • Data security procedures: Front office personnel must understand and properly deal with payment security and guest personal information confidentiality issues. Failures in these areas can result in tremendous liabilities for the organization; professional responses are mandatory.
  • Customer and guest relations: These employees are creators of the first impression your property makes on your guests. Do they have both the experience and expertise to serve guests accurately, efficiently and hospitably? 
  • Creating unique and memorable guest experiences: Oh, yeah… that. Are we aiming too high for our newbie, probably short-term, part-time employees? 

While this trend isn’t optimistic, I’ll add a dash of sunlight to counteract my dark foreboding and dire forecast. The sidebar on the previous page is an extract from an article written in 2003 and used to remind us what guests need, as a distinction from what they want. With care, training, attention to detail and a “service first” attitude, hospitality can be a successful industry. In return, our industry can be extremely hospitable. I suggest we invest in making sure that both factors equally triumph in the end.

Michael Schubach is a regular contributor to Hospitality Upgrade and can be reached at Michaelschubach@me.com.

©2016 Hospitality Upgrade
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How does a hotel best satisfy its guests’ desires?
Start by knowing what matters to them.

The easy assumption is that people traveling on business have different wants and needs than those traveling for pleasure, but what exactly are those differences? The survey data below was complied by Ipsos MediatCT, an independent marketing research company commissioned by Google to produce The 2014 Traveler’s Road to Decision (view this sidebar in the spring 2016 digital edition of Hospitality Upgrade).

This analysis provides for some interesting extrapolations:

Everyone cares most about price and location (in that order) but leisure travelers also look for specials. Promotional deals don’t make the top 10 on the business traveler’s list; but free Wi-Fi access at No. 3 matters more to them than it does to leisure travelers… now there’s your business perk. 

Loyalty club benefits matter to business travelers but they didn’t even make the leisure guest’s top 10. Trend data from this same report indicates that loyalty is more in play now than it has been in previous years.

Not so surprising is that business travelers care more about an efficient website operation, where leisure travelers focus on and pay far more attention to social media reviews. 

More surprising was how little the availability of specific room type accommodations mattered to either business or leisure travelers. Everyone cared more about past experiences with the establishment, in-room services/amenities, and the flexibility of the change/cancellation policy, in that order.    

One final thought on statistics: never assume that a statistical truism is actually true about any one guest or situation in particular. I don’t know that a service professional can make a worse mistake than to treat a customer or guest as a predetermined data point. My favorite example is for all expectant parents: statistically your offspring will be born Chinese. See how well statistics may not work?   



Some years ago I participated in a business skills conference and the college professor leading the session took us through a “left-brain/right-brain” exercise that produced amazing results. (For those brains that have forgotten their hemispheres, the left brain is home to the accounting and IT departments while the right brain houses concierge and marketing graphic arts.) The first step of the exercise was a very simple challenge: Ask yourself, “what do your guests need?” Write as quickly as you can and list as many items as come to mind. You have one minute. Go!
Pencils scratched furiously, and as a group we produced a unified list of many important things that guests need, including a rapid check-in, a clean room, a fair price and a correct bill. Then the professor halted the proceedings, lowered the lights in the room, had us relax in our chairs and concentrate on our breathing, played restful classical music and projected an image on the screen of a beautiful stained glass window. After a few minutes in this near hypnotic state, the professor gave us our second task: “Slowly pick up your pencils with your non-dominant hand. (Lefties had to write with their right hand and vice versa.) Take as much time as you want and compile a new list. What does your guest need?”  
The second list (although considerably harder to read) was full of entries that weren’t even considered on the first pass. The change in the classroom’s atmosphere coupled with the use of our non-dominant hand triggered a transfer of control to the right brain. This time we realized that our guests needed recognition, care, attention, appreciation and reward. I contend that the thoughtful consideration of all of the needs of those we serve – particularly when the pressure is on – is as strategic as any P&L review.        

Extracted from “Surviving the Times,” by Michael Schubach, Hospitality Upgrade, Spring 2003.

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