Understanding Your Brand and Its Position in the Market to Appropriately Set Your Service Levels Against Guest Perception
By Marco Albarran Managing Director, Remarkable Hospitality, Inc. | April 14, 2013
I recall when I was getting my feet wet in the lodging industry, how we had so many changes in ownership/management, and how each new manager had a different strategy/approach to position the hotel and it's the brand according to the local market and also, the levels of service it provided. This was a very confusing environment for staff members, as well as for external customers. Here is a great example from a great property, which I truly like. Go to Expedia .com and search for Ritz Carlton Key Biscayne. The rating according to their consumer rating system is showing 5 stars. However, download the latest list of winners from AAA Diamond rating System and Forbes Star Rating System before reading on and compare the results. Did you see that this hotel is a 2012 Four Diamond/Four Star property, not five? Does this sound very familiar to your operation? How can this be a potential issue for this lodging facility? And for yours? Let's discuss further experiences and solutions on how to position our properties appropriately, ensuring that we are on the right track to viable operating levels.
Perhaps the best scenario that I can recollect in terms of better explaining this was when working alongside a Chief Engineer, discussing a VIP guest room status (we had at the time a plan of action where we would give a second a third eye (from housekeeping, engineering, manager on duty/general manager) for selected rooms that ere pre-reserved to Platinum, and above, reward members of that brand back then), and its surrounding, with our second General Manager in a year. The lodging facility was a very popular brand that we all know in lodging, and typically was deemed as a three star/diamond property by then Mobil (now Forbes)/AAA property rating system. The new General Manager was very persistent on this, almost to a point of micromanaging this new intuitive, to help retain what we would consider long term guests. We can understand this initiative well; it makes sense to a certain level, as we do want to invest in retaining our most profitable guests.
After discussing the plan and the first VIP room to receive this observation, we were asked by the new general manager to leave this and upcoming VIP rooms, (I believe we used to have approximately 10 + rooms per day) and its surroundings (this we can cal public areas, really), in five star conditions. However, the Chief Engineer truly asked three interesting questions that caught my attention. He asked if we were the Ritz Carlton. Aren't' all of our expected/registered guests VIPs? Shouldn't we stick to the expectations of this brand? In other words, we can read this whole situation as: "shouldn't we look at a more broader plan, and develop a strategically continuous plan to be more up to par with our intended target market, rating position in the lodging segment and our budget, to leave all rooms and public areas to a level of expectations and perception guest understand and stay with our brand? The general manager simply answered yes, we should always appear better than what we are perceived as. The interesting aspect was that at that time, I managed the guest service indexes, guest relations and positioning of the brand in our region, and we always were either number 2 or 3 (brand wise, from a service standpoint), out of 20 properties in the area. This was before the new general manager entered the picture. These initiatives and misdirection of the new general manager and Management Company drove us further onto 7th position later on that year, unfortunately, as this and other similar attempts failed to work.
Of course, this was before Internet went main-stream and Social Media commenced to, what was observed, confuse the expectations of guest perception. But this is another issue we will discuss and leave open, finishing our write up here, as this still, is observed as too infant still, and solutions are still needed to be applied.
About the time that the lodging facility was spiraling down the rankings, I was made part of a consulting team for this initiative. I recall on one of our initial assignments, having analyzed another similar situation within the company. Having seen the issues which were described above and also having gotten a perspective of how lodging position truly worked, we had recommended to the other property to truly focus its position on the market and lodging segment. The results on the bottom line were very interesting. The operation, being awarded a three star/diamond ranking, was attempting to operate as a four star/diamond operation. What this was creating, similarly to our initial scenario above, was an unsustainable situation, where the attempt to invest overall in trying to operate a three star/diamond property with four start and diamond attributes, did not maintain consistency. Budget did also not assist in trying to manage this, so results were truly impacting the bottom line negatively. By having recommended to remain operating as how the guest has always perceived the operation (as a three star/diamond property) did a true sense of an alleviation and better results, both in guest service index scores and the bottom line.
So we ask why this was so. Simply because the customer perception (viewing and experience the property as a three star/diamond property) was in line with how the brand and positioning of the property was. So, that meant that levels of operation were in budget, thereby focusing on meeting service levels (both tangible and intangible) that was more in line with the property. Guests reacted better to this, rather than dealing with a property that was simply "trying too hard to be what it was not meant to be, or operate at).