How other industries harmonize with hotels
10 AUGUST 2015 8:50 AM
Leaders from other industries shared insights on how their respective businesses affect hotels.
NASHVILLE, Tennessee—The hotel industry doesn’t run in a silo; there are many background singers who help keep the song in tune, from researchers to lawyers to the government. Three such background singers harmonized on the main stage on the final day of the Hotel Data Conference, hosted by Hotel News Now and parent company STR.
Following are their key takeaways from the panel titled “The background singers: How other industries affect hotels.”
|Rick Garlick, global travel and hospitality practice lead at J.D. Power & Associates. (Photo: Kerry Woo)|
Rick Garlick lives and breathes guest satisfaction as the global travel and hospitality practice lead at J.D. Power & Associates. And he made it clear his presentation would include many feel-good metrics in the same tune as seen throughout the two-day conference.
He presented data from the company’s recent “2015 North America hotel guest satisfaction index study” that showed guest satisfaction for hotels stands at 804 out of a 1,000-point scale. That is a 20-point jump from last year’s satisfaction score of 784. He said a 20-point jump is meaningful, with such a jump last happening in 2013 from 2012.
“This means that on average a typical hotel guest gives the satisfaction experience an 8 out of 10,” Garlick said.
Why such a high score? Because value perceptions have gone up with satisfaction, he said.
But Garlick said he’s often asked if the industry really has improved. The answer is yes, he said.
“I work with a lot of you out there, and I know that people have been trying to improve the quality of their product and service,” he said. He cited breakfast as one example—they have gotten better at midscale properties, for instance. Where guests used to expect a stale muffin and lukewarm coffee, now they can expect a quality, hot breakfast. Free Wi-Fi is becoming common, Garlick added, and guests have come to expect—and receive—flat screen TVs in their rooms as well as comfortable beds.
“There is much greater public accountability. Social media has been a positive disruptor,” Garlick said. “TripAdvisor has brought a level of accountability that we haven’t seen before. It sheds a light on performance, causes people to be proactive in avoiding problems before they occur.”
Garlick presented other key takeaways from the research, including:
- Millennials are just as loyal as everyone else;
- human touch is still important;
- brands still rule; and
- price buyers are the worst customers to which to build a customer strategy around.
Garlick said millennials create great opportunity for hoteliers. He said what often happens is that millennials aren’t treated with the same respect as their older counterparts. That lack of respect leads to a lower satisfied experience. And low satisfaction won’t lead to loyalty.
In response, the hotelier on the panel—Roger Bloss, founder, president and CEO of Vantage Hospitality Group—said millennials often want something different from their hotel stays than older generations.
“Millennials want high speed. My generation is more about cleanliness, and millennials more about streaming, etc. Different millennials look at different things. Millennials talk differently to me than they talk to each other. It’s really about where they can plug in,” Bloss said.
|Alisa Chestler, chair of the privacy and information security team at Baker Donelson. (Photo: Kerry Woo)|
The next panel speaker went beyond guest satisfaction to address the topic of guest data breaches.
The total average cost of a data breach is $3.8 million. And as laws continue to evolve, that cost will only rise, according to the lawyer on the panel, Alisa Chestler of Baker Donelson.
As chair of the firm's privacy and information security team, Chestler sees the value of hoteliers knowing who to call should a security “incident” (she’d rather hoteliers call it that than “breach”) arise.
Chestler said vendors often represent the weakest link when it comes to data security.
“You need to understand who your partners are that are going to have access to your personal data,” she said. “Once they have this data, how are they going to maintain it?”
“We are branding experts, not security experts, so I rely on my third parties to make sure,” Bloss responded.
But Chestler said it’s about having a continuity plan and remediation plan. She said it’s important hoteliers know who to call if a data incident happens, warning that hackers are becoming more sophisticated. She said hackers aren’t just stealing information anymore; they are grabbing data, encrypting it and using it as leverage for ransom.
“Make sure that any data that you need, you have backed up in a separate location in a separate way,” Chestler advised.
“It’s about staying ahead of the game,” she added.
|Jill Denning, per-diem program manager for the U.S. General Services Administration. (Photo: Kerry Woo)|
Tying up the conversation, Jill Denning, the per-diem program manager for the U.S. General Services Administration, brought the discussion around to the impact government business has on hotels.
She announced during the panel that in Fiscal Year 2016, the organization will begin to look at the national per-diem rate on a year-to-year basis. The announcement was met with claps from the audience.
She said, however, that the U.S. government is still under executive orders to reduce travel spending by 30%, and the average per-diem rate nationwide doesn’t tend to fluctuate too much year to year.
Bloss said hoteliers should look at government business by location.
“You have to look at it as another distribution channel,” he said.