It's Not You, It's Them: Finding the Right Guests for Your Hotels
By Rick Garlick Vice President, Strategy Consultant, Magid | April 13, 2014
A primary objective of hotel operators is to keep their properties full of 'heads in beds' to capacity. While this goal is understandable, there is a risk hotels may market themselves indiscriminately and draw guests that are not a good match to their particular value proposition. While this meets a short term goal of wasting as little inventory as possible, there is a longer term risk that these guests may provide negative feedback about their stays, even though the hotel was being true to its own identity and branding. Indeed, the guest experience cannot be fairly evaluated apart from the expectations and preferences a person brings to the hotel from the time he or she books a room. Using a comparative restaurant example, a top steakhouse could never deliver a satisfying experience to a committed vegetarian, even if it provided the best cut of meat and the most attentive service. You have to like steak to positively evaluate the experience.
The J.D. Power 2013 North America Hotel Guest Satisfaction Index (NAGSI) Study analyzes nearly 70,000 guests across all tiers of branded chains to assess their satisfaction and loyalty to the hotel chains at which they recently stayed. For the first time, the study examined guest experience ratings through the lens of why people chose the property. Recent guests were given a lengthy list of reasons that might have influenced their decision to stay at that particular hotel and asked to check all that applied. These items included everything from low price to convenient location to a specific preference for the hotel's services and amenities. A cluster segmentation technique on guest responses reduced this longer list of reasons into six general categories. Across all tiers of branded hotels, these six categories broke down in the following way:
- **Travel Companions** (30%): Someone else made their reservation for them. Although they ended up at the hotel they evaluated, they were more passive about the choice.
- **Constrained Choice** (23%): These guests stayed at the hotel because they perceived they had no other real alternative. Perhaps it was because of procurement arrangements, they attended a meeting or event, or because it was the only reasonable hotel available for their desired price point and location.
- **Price Buyers** (19%): These guests chose the hotel because it represented the lowest priced alternative in whatever hotel category they were shopping.
- **Habituals** (12%): These guests stay with a particular hotel or brand out of habit. They come back to the same hotels, often because they are a member of the brand's loyalty program.
- **Services and Amenities** (9%): These guests represent a hotel's 'core customer', e.g., those that stay at the property because of specific features, benefits, and amenities offered.
- **Scrutinizers** (7%): This group represents a special subset of the Services and Amenities group, and initially clustered similarly. However, they are distinguished as they take the extra step of extensively reviewing the property prior to booking on internet review sites.
Between the Travel Companions and the Constrained Choice guests, over half (53%) indicated the hotel was chosen for them rather than them choosing the hotel. An educated guess would presume these guests would be less satisfied and less likely to return simply because they were passive customers from the onset. We would expect those in the Habituals , Services and Amenities, and Scrutinizers groups to be much more satisfied guests, but what about those that primarily buy on price?
Since low price is often given as a primary reason for choosing a hotel, we might expect that those finding the lowest priced option might be among the happiest guests. On the contrary, those in the Price Buyers category are consistently the least satisfied and least loyal customers.
Here is the breakdown of those that say they will 'definitely' return and recommend the hotels at which they stayed, by guest group:
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