What type of hospitality climate are you creating in your business? In other words, how compatible is your business when it comes to converting customers over into loyal brand users and supporters? Even more importantly, do you know what your present hospitality atmosphere is like for your customers. Does it have real relevant, or impact them in a positive and memorable way that generates loyalty benefits to your business.
What is hospitality climate change?
In my most recent article, Making a case for hospitality intelligence, I talked about the two main competencies that makeup hospitality intelligence and when underdeveloped can be one of the main causes for underperformance in a business as well as elevating the conditions for hospitality climate change to negatively impact your company.
Hospitality climate change is when a business starts to become more commoditized and transactional in how it engages with their customers. Their business development and strategy approaches are internally focused on the hospitality enterprise, rather than on its customers. The hospitality enterprise starts to lack a certain level of connectivity, intuitiveness and empathy in its culture in how they relate to and care for their customers. They leave a good portion of the customer experience dynamics of the business out of the equation. The overall business perspective is overly logical in how they develop and run the business and treat their people. The warmth and sincerity of the hospitality enterprise starts to diminish, impacting the ability of the business to generate customer loyalty opportunities and results.
Let me share my experiences with you. While I was going back to school in 2010, I actually experienced a hospitality climate change event happening around me. It was between the school that I was attending and the hotel brand they were utilising for their educational modules. This experience will demonstrate the negative impact and financial cost of having a low HI-index to your business, as well as being an excellent resource for situational coaching of your hospitality enterprise.
Painting the picture
The program was being held in a nationally rated four-star hotel chain over the course of year. These were four-day modules involving 10-hour days. This totalled five different education modules over a year's time. I was actually staying at the property in which the program was being held.
It all started on the first day of the first educational module. There were 80 + people stuffed into a small conference room that was really designed to hold 60. At first I didn't realise how small the room was, but within an hour it became very apparent that this room was not adequate to support what the instructors needed to convey and the students' ability to properly participate and understand what was being taught.
It was cramped, hot and stuffy. The instructors were basically on top of each other and so were the students. This was very distracting to the learning process. With the hotel's attempt to fix the room temperature, it became too cold as well as very noisy. The room was just overwhelmed by the number of people. During the break, I heard the course directors speaking with hotel management. The managers told the course instructors that there was nothing they could do for them, that the other rooms had other clients moving into them for a big trade show.
I'm going to make an assumption that the hotel overbooked their conference space, or they discounted the importance of the school as a client. Did they really think it was a good idea to put 80+ individuals into such a small space? It's safe to say there was a lack of hospitality intelligence in this decision-making, and a total lack of understanding of how this would impact the overall experience of everyone who's attending, as well as the hotel staff who were attending to us. The employee experience is as important as the guest.
Oh, no! You just didn't say that
Now it's time for our lunch, and everyone was instructed to go to the restaurant in the hotel. The hotel restaurant was supposed to be expecting us, but they were not very well prepared. They were understaffed and their system for checking us in and out was not very efficient. This in turn created some anxiety with the students, first in getting their food orders placed, having enough time to eat, and then getting back to class. This also created even more frustration with the class instructors, who didn't want their students stressed out and distracted while going through this intensive educational process.
I told the restaurant manager that I was in the business and wanted to know what the deal was. Her response was that the F&B director didn't want to add more labour expense to the restaurant. She said this to me out of her frustration and exhaustion because her staff was overwhelmed, and they just couldn't do their job properly. (I was hoping she was going to say, that they had a lot of callouts and they couldn't recover from it in time.)
The food was okay, but everyone's expectations for a four-star hotel restaurant were not met for the cost of the lunch and the way in which it was executed. This only added to everyone's perception of the hotel not being properly prepared. The hotel's position not to add any more labour or have better processes in place for supporting the lunch experience is considered an overly logical and transactional business intelligence perspective, and only added more negative emotions to the hospitality climate.
So needless to say, we did not have lunch at the hotel for the rest of the module. The instructors extended the time for lunch, so we could go off the property, which was a big inconvenience and distracting. The whole point was to be in one place that was very convenient and workable for the students and the school itself.
What I found interesting about this was that the school was trying to manage their student experience and their educational process, but the hotel was not managing their guest experience or in tune with the expectations of their client's needs. There was very little anticipatory planning on their part for managing expectations. This in turn created the perfect conditions for hospitality climate change to take place throughout the entire experience and start destroying the ability of the hotel to properly connect and make a positive impact with their client or the attendees.
Even the midday snack and the early morning continental tables were actually placed in the room. This added insult to injury, until the course instructors actually had a meltdown on the banquet manager and instructed them to move the table outside the room.
You can really start to see how a low level of hospitality intelligence can really affect customer service, the business processes and how the tangible elements are perceived by the customer. It diminishes the quality of the business offerings. There was a lack of empathy and instinctual intuitiveness around finding opportunities to make it better on their part. It was more like how can we get this done, than how can we create a great experience and extend a level of hospitality service excellence that our business is known for to our guests.
What it can cost
So, the first module ended and I went home. The rest of my personal hotel stay followed suit with everything else I experienced in the other areas of the hotel stay, especially the lack of hospitality warmth by the hotel's culture. There seemed to be an air of aloofness as an organisation, just completely lacking the intangible qualities of hospitality and the ability to manage the guest experience throughout the stay. Basically very cold and distant.
Two or three weeks later, I called the school because of a reservation situation with one of my upcoming modules. The gentleman that handled student reservations was also responsible for selecting hotel properties where the modules will take place. While talking to this executive from my school, he noticed that I was in the mid-Atlantic class and asked for my input about what happened. I told him what I experienced and that I was in the hospitality business. Interestingly, the hotel brand was being strongly considered by the school to hold the majority of the school's educational sites throughout the country. He said the school wanted to deal with one hotel brand to make things easier on the school's in-house processes and create a consistently high quality environment for their students to participate in. People who attend this course are typically all on a senior executive level.
Can you see the big picture?
The school executive also shared with me that on average 60 to 75% of their students stay at the hotel where the class is being held and that goes to 100% when it's the certification module. The number of attendances is anywhere from 300 to 450. My certification module was 420 in attendance from all over the country, if not all over the world.
To put this in perspective, my mid-Atlantic class would go there four times in one year. Now keep in mind that the school has new groups coming online every three to four months in each region. They have about six or seven different regions and are expanding into Canada. That's a lot of business for one hotel company!
One region could have at least 12 to 16 consistent conference visits a year, with class size ranging from 50 to 75 that would use conference services, food and beverage services, and rooms. In addition to this, there is the big certification module once a year in each of the different regions. On top of the facts, think of all those people being exposed to the brand.
The fallout
Because of how poorly the first module went and the fact that 25% of the attendees did not continue any further with the course, the school ended up pulling its contract with this hotel brand for any future bookings.
I feel safe in stating that a lot of this had to do with the fact that the hotel was relying too heavily on just the business intelligence approach and the tangible aspects of their business to win the day. They overlooked the hospitality intelligence and the intangibles to win the customers heart. They treated the school in a very transactional manner, and they possessed an adolescent understanding of the importance of the customer experience dynamics for creating a positive business relationship. It was an amazing experience for me, as a customer experience specialist to observe both ends of the spectrum, as well as being a customer.
I know at first that everybody will look at this situation from a leadership and management perspective, and first consider the standards of operation and the business processes that were lacking. Here again that would be a very logical business intelligence approach, but it's a much deeper conversation, and goes well beyond the surface areas we first consider when things go wrong with the customer. You can start to see that 50% or more of this experience was completely left unmanaged, or not given the significance required for impacting the financial performance of the business.
Can anyone in the industry even begin to quantify the losses if this was your hospitality enterprise? I would love to hear from you. Let me share some numbers to help you. On average it was a three-night stay, for the majority of attendees at a cost of $165 a night/no Wi-Fi. This does not take into account the conference room charges, the food and beverage charges for the breaks, or the four on-site lunch which was about $20++ in an limited à la carte setting, that were supposed to take place.
There were also intangible losses, like the advocacy factors to the brand reputation, i.e., the online identity, took a hit. How do you think the frontline managers and employees felt about the company by not having the proper resources in place for them to do their job in delivering proper level of customer service and hospitality for ensuring the brand promise is delivered? This obviously impacts morale and the turnover potential of the staff. It affects their level of trust and loyalty to the business. Just consider the multiple regional visits that were lost, as well as the ones throughout the entire country.
"Customer service is delivering on your business's ability to uphold the integrity of the brand promise. Hospitality is making your customers feel good about themselves from their experience with your business." Brett Patten
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.
