The Guest Experience is Changing
Guest expectations are changing so that means that hotels are changing. The hotel of 10 years ago looks very very different to how hotels look in 2017. Almost everything is different for all but the most important offerings – quality of product and service. How guests experience the quality of product and service has changed forever.
A Shift from Full Service to My Service
There has been a marked decrease in the traditional ancillary revenue line items. From paid WiFi, Video on Demand, Laundry, Mini Bar and call charge revenues all moving downwards the trend is clear. The traditional full service product, while still required represents a smaller and smaller percentage of total revenue. Todays guests bring a lot of these services with them and opt out of many others in even greater numbers.
Guests have New Expectations
The way guests experience hotels has changed for good. Personalization is a key driver of guest satisfaction, and while being hard to attain in a consistent way, is becoming more important as a hotel KPI. The abundance that todays consumers experience in their every days lives as they can have any conceivable product or service when they want is expected to be replicated when they travel. Added to that the democratization of the travel industry and transparency and visibility through online review sites is a harsh but very real reminder about how guests experience the hotel experience
The Best Hotels have Reinvented their Model
The best hotels have reinvented their model to be more inclusive and more efficient. To be able to deliver the full service offering when called upon requires corresponding efficiencies to be built into the offering. Many hotels now have a single headline rate and the days of charging for extra services would seem to be numbered as guest expectations continue to change. Technology will make this transition easier with time as products will appear to help hotels become more efficient in how they deliver their services.
Its a New Way of Thinking
This represents a shift from the traditional mindset of a revenue centric view, whereby each revenue line is there to be maximised. The new reality is that many of these traditional revenue lines have been in decline for years and are not coming back. Hotels should take a guest centric view, with service and personalization maximizing the guest experience.
This Changes Everything
This changes many things. From a pricing perspective we move from a pay for extras to an all inclusive model, from an operations viewpoint it is many hands to efficient deployment of resources. Perhaps most important of all, and a change that many of the best hotels have already made is the shift from a focus on REVPAR as a key metric to Guest Lifetime Value as a leading indicator of success. As the industry continues to fragment, and the battle for guest point of booking continues the party with the direct relationship with the guest will be in the best position for long term success.