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The Mille Club: investing at the half-mille mark

We have written several articles regarding hotels that are part of what we call ‘The Mille Club’. Mille, translating to thousand, identifies those properties that have seen their typical ADR move above the thousand (dollar, Euro, pound, CHF) rate.

But what about those properties that are consistently pushing rates in the $500-999 range, well above the levels that were the norm pre-pandemic: Do the same Mille Club rules apply?

Yes, of course, they do but not at the disproportional levels when you cross the psychological threshold of passing four figures in your sticker price. Many properties have been operating in this ‘half-mille’ price range for years, with the senior team looking at overarching strategies to support greater and greater rates that will, one day, leap above the $1,000 per night mark. These owners and operators understand that when selling rooms in this half-mille price range, guests are expecting a lot more than the basics.

Getting to a thousand

Guests are now anticipating a remarkable lobby, a comfortable room with enticing furnishings, a solid service component and upgraded amenities. Further, ancillary activities such as premium dining and spa services play an important part in this half-mille product offering. Above all, it all comes down to service.

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But the service standards that are required to edge up towards $995 per night and then sustain rates worthy of five-star, four-figure luxury demand lots of opex and capex retooling of the finances. In short, what are you doing to funnel more of the funds from elevated rates back into the guest experience to reinforce your new rate structure?

And the tricky part about putting money aside for future property improvement plans is that your competitors are likely following the same strategy. If half-mille rates are the new normal for upper upscale properties in your local market and neighboring ones, then you know that guests’ expectations have likewise been heightened. Now is not the time to think about any sort of cutback on labor or amenities as so much of getting to $1,000 is momentum based on your good reputation built cumulatively year after year.

A pivot point for example here is that daily housekeeping with turndown service is a must. You need to demonstrate the value within the half-mille range before you can push for a full mille, and this requires getting the operation finely tuned so that it’s already in top form by the time you’re nearing that four-figure threshold. This is but one instance where you are looking for strong, emotional ways to increase the perceived value of the guest’s stay. Often, it’s the small touch points like a personalized turndown service that will make the world of difference.

Specific operations for the guest journey

The implementation of turndown service is but one amenity that must be enacted during the half-mille stage in order to achieve proper mille status. As a GM or above-property leader, all your team members must be in sync with your goal of ensuring a memorable, personalized stay with impeccable service. But with so much to do in order to move up the star rating, it’s best to break it down into specific departments that are tackled systematically each quarter.

Thinking in terms of the guest journey, here are questions to ask your senior staff:

  1. Prearrival: Have we undertaken effective prearrival programs and system integrations to pinpoint guest arrival time to ensure that their room is ready? Have we detailed guest preferences for prearrival? Have we offered dinner reservations or looked at other guest needs? Will the guest’s room be inspected, and will the appropriate unique-to-the-property welcome gift be dispatched? Have you checked your CRM to identify a repeat guest and brief teams on specific personalization attributes?
  2. Arrival: Is the room ready at the guest’s anticipated arrival time? How will you greet the guest upon arrival? What will you do so that the guest will remember you well beyond their stay?
  3. Stay: Is daily housekeeping in sync with the guest’s schedule? Can you work out a way to greet the guest at least once during their stay? How have you made the daily housekeeping turndown service unique to the property?
  4. Departure: How have you made the departure easy? How have you made it memorable? Have you considered a small token that reprises the property’s key feature, for example, if your property has a strong wine cellar, consider a key chain with an imprinted cork.
  5. Post-Departure: What can you do to incentivize a return visit? What have you learned about the guest that you can use to encourage this? Are you providing a snack for the road or a departure gift that’s emblematic of the hotel?

Beyond hiring outside consultants and interior designers to help devise a full PIP, many of the operational hurdles all come back to using your team’s creativity. Some of our most memorable stays were not a function of expensive capex elements, but rather, the attention to detail that we experienced at each of these five milestones of the stay.

Yes, capital expenditures will be critical for getting to $1,000, but it’s the opex and the embedded operational wherewithal that will keep you there. As this means hiring, training, writing new SOPs and steering the cultural ship, it’s best to proceed diligently and tackle each detail of the guest journey so that you will be ready for full mille membership long before you invest in any sort of renovation.

This article may not be reproduced without the expressed permission of the authors.

 

Tags: guest journey, Mille Club, significant milestones

Managing Partners at Hotel Mogel Consulting, Toronto, Ontario, Canada

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