By now you’ve probably been inundated by a flurry of press releases spewing self-adulation for notching top spots on J.D. Power and Associates’ recently released 2010 North America Hotel Guest Satisfaction Index Study.

I don’t knock hotel companies for issuing these. On the contrary, if you win guests in an economy where budgets have been cut to the bone, you’ve earned some bragging rights.

But what’s often lost in these declarations is why guest satisfaction is so important.

I’m not speaking theoretically here. We all know that fostering a hospitable customer experience is at the very core of this industry. But last time I checked, I’ve never seen “guest satisfaction” on a brand’s quarterly earnings report.

The reason for this is simple: Guest satisfaction is hard to quantify in dollars and cents. While you’ll be hard-pressed to find a general manager who doesn’t understand some basic correlation between a satisfied customer and continued financial success of the property, quantifying that relationship is easier said than done.

Fortunately for us, the brain trust over at Cornell’s Center for Hospitality Research isn’t deterred by such a daunting challenge. The group’s most recent report, “Making Customer Satisfaction Pay: Connecting Survey Data to Financial Outcomes in the Hotel Industry,” offers some intriguing insight on the dollars your property could be losing or gaining based on the satisfaction of your clientele.

(The report, coauthored by Gina Pingitore, Dan Seldin and Arianne Walker, can be found for free here. Researchers applied the same methodology used by J.D. Power in its analysis, but limited their study to an upscale hotel chain as part of its ongoing customer satisfaction tracking program during 2008 and 2009.)

First, let’s start with one of the report’s admittedly obvious conclusions: The more satisfied the guest, the more likely he or she is to return to that same property. Of the 24% who said they would definitely return, 19% actually did within a 12-month period.

“While the actual rate of return may seem small, hoteliers understand the substantial financial implications of increasing return rates by even one to two percentage points,” the report states.

More interesting is the correlation between satisfaction and ancillary spend. While there’s nothing surprising about the fact that happier guests spent more on restaurants, room service, spas, recreational facilities, etc., the Cornell study revealed spend averages for stratified levels of satisfaction.

“The findings also held true for ancillary spending during the subsequent visit, with Delighted guests increasing their ancillary spending during subsequent visits by an average of (US)$10.”

Similarly, ancillary spend increased dramatically in the presence of “outstanding staff performance.” 

Identifying areas for improvement

So what areas of guest satisfaction will give you the most bang for your buck? There are four, according to the North America Hotel Guest Satisfaction Index Study.

For example, among guests who reported their reservation was accurate, the average guest satisfaction index score was 765 compared with 621 among guests whose reservation was inaccurate.