In this article, I would like to touch on a very unique and maybe even a somewhat foreign subject, which is the hospitality intelligence of your enterprise.
First I'll focus on the need to understand the two main categories that make up the hospitality intelligence levels of a hospitality driven company.
Then I'll cover the key differences between hospitality intelligence and business intelligence. Gaps between the two will need to be closed to achieve a stronger financial position in your business.
What is the true predictor of success?
Not location. Not product offering. Not amenities or pricing. As history has shown in the hospitality industry, logical and tangible aspects have never really served as an adequate predictor as to why one hotel business or brand succeeds and another fails. There is something else going on that the hospitality industry does not seem to account for, and that's the ability intangible elements can have on a business's overall success.
Sizing up the entire business
When I'm working with my clients, I initiate an ROI report on the weekly, monthly, and yearly "operational investments/expenses," with a specific focus on how it relates to their customer loyalty, their direct bookings versus outside OTAs, as well as their online ratings position.
This is a part of my overall appraisal process, in which I focus in on the level of hospitality and the customer experience dynamics of the business, which are the two main categories that actually make up the hospitality intelligence within the company. These are outside the logical business IQ aspect of the business and the brand persona.
There are three areas with distinctive qualities that all hospitality enterprises posses:
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Business IQ
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Brand persona
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Hospitality IQ/HI
Together they determine how a hospitality enterprise thinks and acts towards every single aspect of their business. It is possible to predict one's impact based upon the other. A hospitality enterprise may be logically intelligent but may lack a sufficient level of hospitality intelligence, and hospitality enterprises of all types of brand personas can be high in hospitality IQ and/or business IQ.
But of the three, hospitality intelligence is the only one that is capable of creating a sustainable connection with your customers on a very emotional and personal level to achieve sustainable loyalty in the customer relationship.
I just want to say HI
This appraisal process that I'm speaking of is called The HI index, which is an acronym for the Hospitality Intelligence measuring. Our approach is to index the level of hospitality intelligence of the entire business to see if they are in alignment with their customers for achieving their short and long-term business goals. What I'm finding all too often is that the business is out of alignment in their ability to create a meaningful connection with their guest.
I see hotels making extraordinary daily, monthly and yearly investments in their operations in the physical plant of the hotel and other tangible assets of their business, but they are not experiencing customer loyalty and financial gains from these investments. I hear comments from industry leaders that they were expecting stronger results from those areas, as well as many others KPI's of the business.
I believe one of the causes for this lack of performance is based on an overly logical business perspective that can all too often end up dominating the business strategy development and directly impact just about every single aspect of their business in an overly logical sense.
This business perspective is driving the tangible and analytical initiatives completely out of balance with the hospitality intelligence side of their company. All of the focus and energy is overly transactional and bottom-line oriented nature, which can very easily lead the hospitality and the customer experience design dynamics of the business into a very muted and insignificant role in the business.
Making a case for Hospitality Intelligence
A higher level of hospitality intelligence would help to better connect the tangibles with the non-tangible aspects of the business. This would support better alignment of the business in a much more consistent and natural way. Customer agenda initiatives or other elements within the business would not be forced, creating a much higher level of awareness, engagement and management out of the hospitality intelligence position.
I believe not having a higher hospitality intelligence or HI index to be one of the main causes for the lack of loyalty being generated in the hospitality industry and it is allowing the OTAs to gain an even stronger position with the hospitality industry's customer segments.
By not being fully aware of the significance and connectivity levels of their hospitality and customer experience dynamics in the domain of hospitality intelligence, hotels seriously put their business at risk of continually under-performing, especially in the areas of the revenue KPI's.
It impacts the hotel's ability to convert guests into becoming customer loyalty brand advocates. It also influences customer satisfaction dynamics in social media platforms, which in turn has a direct impact on their rankings position, reviews and the hotel's ratings.
The hospitality industry can no longer neglect this critical aspect of the business, or continue leaving it underdeveloped and unmanaged. There's just too much at stake. The ROI implications alone are significant, with higher operating costs, OTA fees and other expense structures continuing to squeeze the industry's margins. When your guest are in-house, there has to be a level of intelligence that influences all the business strategies for converting those guest into becoming loyal customers of the business that goes beyond a purely logical business perspective.
It makes sense to balance out the level of intelligence your enterprise possesses. You must create a more instinctual and intuitive business nature not only to be more in tune with your customers, but to enhance the financial position of your business.
Brett Patten is approaching 35 years in the hospitality industry where he has spent those years accumulating experience in a variety of leadership positions and business enterprises. Brett has become known as one of the top executive leadership and organizational engagement coaches on the subject hospitality intelligence and customer experience design.
Brett's management and business approach transformed hospitality enterprises with sustainable growth results from his days with the prestigious four and five-star hotel brands, such as the Stouffer's hotels, Pan Pacific Hotels, and Le Meridien hotels, as well as working with five-star club resort enterprises like the Longboat Key, to the launching of a nationally award-winning hospitality brand in 2007.
Brett then turned this business processes 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, he has become an industry pioneer and authority on the subject of Hospitality Intelligence. Brett's company engages with some of the top hotel brands and hospitality groups both nationally and internationally in the industry.
