Saying Goodbye Doesn't Have to Be Hard to Do: Reflagging Best Practices

By Steve Van President & CEO, Prism Hotels | May 19, 2013

In my last column, I discussed best practices for managing a hotel renovation: telling a story, getting customers actively involved on the front end, and having a strategy to help guests and staff cope with the change. While much of that information pertains to both flag changes and standard renovations, there are certain components that apply only to brand transitions.

We are going to be seeing more and more hotels change flags this year as loans come due and many franchisors stop giving out "hall passes," to properties with no money to renovate. These franchisors are tired of waiting for properties to live up to current standards and are going to insist on fulfilling the Performance Improvement Plan or changing the flag.

Consumer preferences and expectations are also evolving in new and different ways that are having significant impact on certain markets. As my Vice President of Marketing Allison Handy told me, "when Vera Wang launches a clothing line for Kohls, you know traditional boundaries of luxury and economy are no longer clear-cut." This is an important cultural observation that we see with travelers as well. Some travelers, armed with TripAdvisor searches, no longer care about brand name and prefer independent boutique style properties. Others, still recovering from the recent economic downturn, are turning to more budget friendly brands than those they've frequented in the past.

What this means for hoteliers is they can no longer sit back and bank on a brand attracting enough of the right customers. They can't expect to put a new flag on the building and open the doors to find people lined up to get in, nor can they expect that all of their previous customers will immediately switch over to the new brand. In an industry based on relationships, hoteliers have to be especially careful not to burn bridges with past guests while actively recruiting for new guests in the process of reflagging. But done right, owners can confidently make the right business decision for their hotel without a painful goodbye.

This article explores how successful owners, managers and brands should work together during the reflagging process to maximize ROI and ensure a smooth transition.

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Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.