Guests value experience over location and price

(Guests value experience over location and price)

Why do guests choose a particular hotel? Experience. You might guess location and price top the list. But assuming you’re operating a hotel and not building one, there isn’t much you can do about location. Price, likewise, has a lot of constraints. Rate cutting is not sustainable. It may goose business in the short term but it can set unreasonable expectations and restrict future price increases.

Experience, on the other hand, gives you a lot to work with. Creating great experiences for your guests is by far the best way to keep your best customers and attract others. Just look at the data to the right: Experience tops the list of things you can do to influence hotel selection. And with all the fuss nowadays about online reputation and reviews, it’s interesting to see experience is four times more likely to influence hotel selection. Yes, a large portion of travelers do consult online reviews (and let’s be clear here, they are extremely important) before making a booking. But it appears that online reviews are more often used to gather information rather than as the primary reason for selecting a hotel.

Experience drives loyalty and referrals

What’s really powerful about experience is that it is the key to future bookings. Experience is what builds loyalty, drives referrals and creates positive word-of-mouth and online reviews.

Experience has always been among the top things travelers consider when choosing a hotel. But in recent years it has grown in significance. The importance of past experience in hotel selection has climbed over the past few years while the emphasis given to location and price has remained constant. 

Why? There are numerous explanations. Hotel experiences have gotten better and guests are taking notice. Customer satisfaction scores have increased for six years in a row. Emotion scores (ratings about how guests feel during their stay), the biggest drivers of loyalty, have also increased. Improved customer satisfaction has also pushed loyalty scores higher, increasing eight points in the past five years. Guests are more likely to be loyal because of a positive experience rather than a hotel’s location or its prices. 

Social media has also added visibility and attention to the customer experience, which has compelled hotels to pay more attention. Hotel companies, wanting to avoid the impact of negative reviews, are listening to guest feedback, improving service recovery and incentivizing their hotels to improve the guest stay. Meeting planners and corporate travel managers are also paying more attention to feedback and are giving more consideration to the overall guest experience rather than just seeking the lowest price.

As a result, guest priorities have shifted; positive experiences now driving hotel selection more frequently. This is especially true at the upper end of the market where past experience plays a bigger role. 

Creating winning experiences

Every company can create unique experience for its customers. But aligning products, services and the guest’s emotional experience with a target market and goals of the company is a big challenge. Companies focusing on improving their customer experience typically follow a simple model of continuous guest feedback and learning. This process often includes collecting reliable guest feedback, empowering and incentivizing employees to act on results, investing to improve weaknesses and celebrating success.

All over, hotel companies are focusing on the guest experience. They are redirecting their resources on the guest experience as they discover its link to loyalty and overall business results. It’s no longer enough to offer a good product or service, you have to wow the customer in order to win his advocacy and keep him from trying someone else next time.

Market Metrix has identified five elements that are fundamental to creating a superior customer experience strategy:

The customer experience is not an isolated transaction; it is an organization-wide process. Align policies, rules and procedures to support a superior guest experience.

Employee performance can significantly differentiate a company from its competitors. The attitude and treatment provided by employees can have a huge impact on loyalty, often more important than products or services.

Emotions play an important role in guest satisfaction and loyalty, and are typically a better predictor of customer loyalty than traditional measures of product and service satisfaction.

Basic, low-tech products and services are often the core of positive guest experiences and guest loyalty.

Move beyond features, products and processes by strengthening the relationships you have with your customers. Continuous feedback systems establish an operational backbone that adds structure and helps companies engage customers and keep pace with changes in the market.