Since we seem to be in the age of what was once old is new again, maybe that can hold true for the hotel industry in how they create their hospitality offering.
I was inspired to write this article from Jim Abrahamson the CEO of Interstate Hotels and Resorts. Jim had appeared at the Southern Lodging Summit in which he shared an anecdote that consumers often cite brands like Hotwire and Tripadvisor as their favorite travel brands, rather than a specific hotel company like Marriott or Hilton. He then went on to say, "We as an industry have to figure out how to embrace that change because the customer is moving faster than ever." My response is that I couldn't agree more, but the more things change, the more they stay the same.
So with that said, please allow me the opportunity to help embrace the ever elusive customer. I'm not exactly sure if it's the customer moving faster than ever before, rather than they are evolving how they perceive value from the hotel industry. I stated this in an article I wrote called, Which Century Are You Operating Your Hotel From, in which I discussed how the customer wants the total customer experience for their time, money and loyalty.
If the hotel industry wants to gain control over their ADR and revenue growth, as well as have the ability to set the value that they want to receive from their business offerings, then I think they have to break free of the OTC's pricing grip on the industry. Otherwise, it's going to keep pushing the hotel industry into a commodity driven marketplace position where everything seems to revolve around the financial transaction exchange with customers. Hotels end up leaving too much money on the table when that's the case.
I already see how it's impacting the thinking and mindset of the top industry leaders when I hear statements made that revenue is king. I thought the basis of any great hospitality enterprise was built on the fact that the customer is king. So as I stated in my subtitle, what was once old can be new again. So, let's position the hotel industry around the guest. I believe if you focus on creating an exceptional guest experience as the value proposition within your business model and shift to experience management system approach, then you don't have to compete on commodity driven pricing. It will no longer be necessary to compete on the product and service level when you can generate a memorable guest experience that builds experiential value with your customer segments.
This business strategy approach takes a page out of the playbook of some of the top business enterprises in the world, like Nordstrom's, Whole Foods, Southwest Airlines, Apple Computers, Starbucks, Lexus automobiles, Ally Bank and some hotel brands like the Library Collection, Shangri-La, Mandarin Oriental, Four Seasons, Peninsula and the Ritz-Carlton. All these businesses compete on the total customer experience as the value proposition within their business model and align all business strategies around the customer experience design.
When you look at the OTC brands, they have created an emotional bond and connection with their customers, which in turn has created a very strong level of brand loyalty and trust in their offering. It's not about sharpening your rate management, yield management, or revenue management strategies and processes for the hotel industry to gain back their leverage. It's about implementing customer experience business strategies for creating the ability to compete on experience as a legitimate business differentiator in the marketplace. When your business competes on creating emotional connection with their customers through the customer experience design, then that becomes very difficult to duplicate and procure by your competitors. It is also very difficult for those customer bonds to be broken by another competitor.
When this business strategy is implemented in your business, it allows you to set the rate for that experience instead of solely setting the price on the commodity or the product and service of the business. You end up changing the conversation with your customers when it comes to your offering. You basically have uniquely differentiated your business offering in the marketplace. Just because you put the client of your business in the first position, doesn't mean that you don't have strong business disciplines in place for managing the operations and analytical side of the business. You don't have to sacrifice one for the other.
About the author
Brett Patten is approaching 35 years in the hospitality industry where he has spent those years accumulating invaluable experience in a variety of leadership positions, and business enterprises. To recently completing his education as an executive leadership and engagement coach in the area of customer experience design.
Brett's unique management and business approach consistently transformed hospitality enterprises with sustainable growth results from his days with the prestigious four and five-star hotels like Stouffer's hotels, Pan Pacific Hotels, and Le Meridien hotels, as well as working with prestigious five-star club resort enterprises like Longboat key, and Greenbrier to the launching of a nationally award-winning four-star hospitality brand in 2007. From there, he built hospitality business strategy platform that he developed and trademarked out of his commitment for achieving customer experience excellence. Brett then turned this business strategy platform into a company called "Five-Star Customer Experience Design," Today, after spending the last 15 years researching, studying and developing customer experience design strategies for the hospitality and tourism industries. In which he engages with some of the top hotel brands and hospitality groups both nationally and internationally in the industry.
