M
ost hotel owners I know got into this business for one reason and one reason only: to make money. Sorry to be cynical about this, but, after all, it is the American way. That’s not to say they aren’t genuinely interested in hospitality or making sure their guests are satisfied. However, let’s be honest: That’s just a means to an end for them. For every owner who says they always knew they wanted to serve people in some way, there are many more who are all about serving their bottom line—and there’s nothing wrong with that.
It has been said that you can prove anything with statistics and a couple of recent guest satisfaction studies bear that out. For example, the American Customer Satisfaction Index in June released a report that indicated customer satisfaction with hotels is at an all-time high since 1994, when it was first measured. This year’s score was 77, compared with 71 in 2007, for example, before the economy had taken a turn for the worse. Meanwhile, the J.D. Power & Associates 2012 North American Hotel Guest Satisfaction Index Study reported overall scores declined seven index points to 757 on a 1,000-point scale from 2011.
However, while the two surveys may have drawn somewhat different conclusions on overall satisfaction, there were many similarities as well, and the most striking was that, overwhelmingly, the greatest source of guest satisfaction has been in relation to what they are paying. Guests are considerably satisfied with what they are getting for their dollar and why shouldn’t they be?
A colleague of mine recently traveled to North Carolina for a long weekend and stayed at a freshly renovated, major branded, select-service property outside of Raleigh. When I tried to guess the rate, I estimated in the $119 to $139 range, but I wasn’t even close. With only the help of a AAA membership, she paid a mere $67 a night. There’s no way a night in a clean, comfortable hotel with breakfast, free Internet and a pool should be the same as a tank of gas. But it is and there are many more examples throughout the country.
While Smith Travel Research has reported that RevPAR growth is going in the right direction in most of the top 25 markets, it needs to happen faster for the industry. Years ago, many theorized that advances in revenue management systems were going to help the industry keep rates stable during downturns. But what we’ve found out is that these systems are only as good as those who are operating them. If a revenue manager decides to forego the suggested rate because the hotel across the street dropped its rates, there’s not much value in the system.
As always, holding rate is easier said than done. However, if guest satisfaction is so high with regards to rates, it’s time for owners to move the needle up a little faster. Gas prices are a perfect example. Remember all the concern about people traveling this summer as gas prices neared $4 a gallon? There’s been little or no impact on summer travel this year, or for the past several years, for that matter. The bottom line is people have gotten used to it, and it’s time for owners to get used to making money again.