Hotel guests willing to pay extra for sought-after features

Hoteliers can drive revenue growth by offering not only experiences that customers want, but experiences for which they are willing to pay a premium. Recently, PwC conducted research to analyze the value of different hotel options. The research reveals that issue resolution and in-room amenities are features most sought by customers. 

Unlike traditional methods of consumer research, PwC’s Experience Radar 2012 measures the features that customers value as they select a hotel, not just features they like. The difference is that valued features are those for which customers are willing to pay more. The study is based on responses to an online survey from a sample of 900 U.S. consumers—600 leisure travelers and 300 business travelers. 

Experience Radar 2012 identifies certain, important features that guests have grown to expect from their hotel experiences. These are the must-have features, with low economic returns. Notable features that customers do not want to pay a premium for include style and décor, flexible cancellation policies and reward points. 

In contrast, Experience Radar 2012 also identifies features, such as issue resolution and in-room amenities, that guests find important and for which they are willing to pay a premium. Leisure guests reported they were willing to pay a 20-percent premium for best-in-class issue resolution, while business guests reported they were willing to pay an 11-percent premium. Also, this feature affects a hotel’s ability to retain customers.

Eight out of 10 leisure guests are influenced by well-handled issue resolution during a previous stay when rebooking.

On the other hand, failure to resolve customer issues can have lasting and broad-reaching consequences. Sixty-six percent of guests surveyed indicated they are not willing to rebook after a bad experience. In addition, they make sure their entire network shares the same sentiment because 80 percent of those surveyed report sharing bad experiences with others within a month.

The report finds a divide between leisure and business guests in willingness to pay extra for certain amenities. Leisure guests reported a willingness to pay a 30-percent premium for a hotel offering what could be called top-tier, in-room amenities, such as Wi-Fi and high-definition TV. While 84 percent of business guests value these same types of top-tier amenities, they reported an unwillingness to pay a premium for them. 

These findings suggest that hoteliers may be able to drive incremental revenue by enhancing their guests’ experience.  In particular, guests value an ability to address issues as soon as they arise.