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Hotels need to start considering a connected commercial strategy. And this starts with how well team members are treated. On-property staff care for the customers who boost topline RevPAR and TRevPAR. But, in today’s uncertain labor market and soaring inflationary costs, properties are experiencing operational difficulties without levying sizable price increases and, thus, the customer service experience may remain challenging.
Hospitality owners and operators are reacting by creating cross-functional operations planning and combined commercial teams consisting of revenue management, sales, and marketing, and investing in integrated technology like Duetto that creates a shared view of the customer.
The fastest way to get guests to love your property is to get employees to love their jobs and to invest in tools, statistical models, algorithms, and insights that unite your teams.
We know the dependent relationship between staffing levels and hotel service scores. The integration of online reputation indexes or guest satisfaction benchmarking into commercial strategies is essential to watch during this uneven global industry rebound.
While the pandemic may have connected the guest experience and revenue growth dynamic even more tightly, recent headwinds caused this correlation to deviate. This “W” shaped-recovery mirrored the broader industry RevPAR trend up until recent months, as we have seen in recent Pulse Report data.
The reality is customer expectations are returning to normal, while owners and operators seek to best compete in the new normal. This suggests the need for revenue and operations directors to reset their expectations on what guests truly value (like breakfast) and possibly re-align on value-for-money positioning relative to their market.
Lodging industry ADR increases are no exception in this period of soaring inflation rates for most goods and services. With the US President warning oil and gas companies against price gouging recently, what are the role and responsibilities of commercial teams to do the same? Let's look at this challenge from a guest's perspective.
Consumers are paying more than ever for most things. People inherently know that when there's a supply shortage, we pay more. And people also understand that when there is high demand for a product, then prices are going to go up. These fundamentals are embedded in consumers. What is interesting right now is that ADRs in some markets are up by double-digits, well above inflationary ratios. Potential guests are now seeing huge spikes in travel costs but oftentimes are experiencing lower levels of service. Labor shortages, supply chain issues, and others have forced properties to run lean (such as limited housekeeping or fewer F&B offerings). In essence, hotel guests are sometimes paying more to receive less. That does not add up in the consumer's mind.
Eventually, if this imbalance goes unchecked, it is not only going to have a negative impact on guest satisfaction but also may have a dire lasting effect on hotel industry growth compared to other accommodation types such as short-term rental. The period of diluted customer expectations, both in B2B and B2C markets, where they are just happy to be anywhere that isn’t home will dissipate, if it has not already.
There is an old saying in the hospitality industry that “Today’s booking pace is tomorrow’s RevPAR result”. While that is still true today, the post-pandemic commercial strategy evolution broadens these parameters to a refreshed industry adage that “Today’s consumer searches are (perhaps) tomorrow’s guest reviews”.
This paradigm shift requires properties to make investments that are necessary to streamline employees’ day-to-day workflow. Owners and operators must instill a sense of common purpose, one that closes the gaps between commercial and operations functions and unifies team members toward common profitability goals. Technology solutions such as Duetto will help achieve that. These shared metrics will prove the benefits of bridging the gaps between employee engagement, guest satisfaction, and revenue growth – delivering a truly connected commercial strategy.
Discover more about how guest and employee satisfaction impact revenue. Watch our latest Pulse Live on-demand webinar, ‘Putting the Guest At The Forefront of Enterprise Revenue Decisions’ and hear expert insights from Lloyd Biddle alongside Casi Johnson, Chief Operations Officer, M3, and Geoff Ryskamp, Vice President, North America Enterprise, Medallia. Register here for the link.
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