Challenges of Maintaining High Quality Service in Era of Cost Cutting

Prior to the pandemic visitors were seeking more distinctive and memorable experiences which hotel industry leaders believe would be difficult to sustain as more firms were deciding to cut back on the hotel operating costs.

Kimpton Hotels CEO Mike DeFrino remarked during the Boardroom Outlook: The Experience Factor Means Business session at the 2021 Americas Lodging Investment Summit that while leisure demand increases, forcing increases in prices for some areas, guests expect the same or better service.

Customers would have a “learning curve” in terms of what to expect during their hotel stay, he said.

“The customer is not there yet,” he discovered after speaking with his general managers, “particularly if a guest is spending $500 or $600 in Key West and don’t have clean towels, guests are irritated.”, we have seen it in our guest satisfaction numbers, TripAdvisor Reviews, and other places where people have spoken up. As a result, there will be an uphill struggle ahead.

According to John Cohlan, CEO of Margaritaville Holdings, “There is just too much demand in certain areas to keep up with, and it appears that visitors cannot be priced out of locations to compensate”.

“With so much leisure demand, we were really attempting to reduce occupancy by hiking rates,” he explained. “But, given the current state of the market, it hasn’t worked out so well. It’s exacerbated the situation since you’re now paying more for services that aren’t as responsive. This presents a difficulty.”

However, as the standard hotel operating model grows more challenging, panellists agreed that moving to more atypical models is part of the answer.

According to Rafael Museri, CEO and co-founder of Selina, “Travellers visiting international resorts wants to feel more connected with the destination and people who live there”. Part of that endeavour includes determining the success of a stay at the resort based on the number of friendships made. “That’s important because we can see the direct correlation with the income” he added.

Ken Cruse, CEO and Co-founder of Soul Community Planet stated, “Such Innovative efforts, hotels must be ready to incur short term losses or swing and miss.” He claims that when his firm chose to start offering rooms to unplug from technology that didn’t have gadgets. The communication with the guests regarding how their company has marketed the idea of cross-cutting was not conveyed correctly.