National Report – Generating interest for your hotel is fine and dandy; generating business and repeat business is critical. Plus, the quality of a guest’s stay is directly linked to whether or not they will return to the property—or that brand—in the future. The good news for the industry is that according to J.D. Power and Associates’ 2014 North America Hotel Guest Satisfaction Index Study, hotel guest satisfaction has reached its highest level since the study was revised in 2006.
The study, released in mid July, tracks guest satisfaction on a 1,000-point scale. The results for 2014 weighed in at 784 points, up seven points from 2013. In addition, all segments showed improvement, save for upper extended-stay and extended-stay, which remained flat.
InterContinental Hotels Group (IHG) has two top-ranked brands on the 2014 index: Holiday Inn (which has won the award four consecutive years in the midscale full-service category) and Candlewood Suites (which is winning the award for the first time in the extended-stay category). The award is taken so seriously by the Holiday Inn brand that it displays its past J.D. Power guest satisfaction distinctions on its website and in its properties.
While these awards are on display for guests to see, Heather Balsley, SVP of Americas core brands and brand operations for IHG, said the awards are not there for the guests. Rather, the awards are seen as a barometer of success and as a means to generate excitement and enthusiasm for Holiday Inn’s corporate and hotel staff.
“It is not necessarily something we consider to drive decision-making in the guest,” Balsley said. “There is a lot of competition in the running for this recognition, however, so to grow your scores as the year goes on and win it is very exciting.”
Kimpton Hotels & Restaurants ranked highest in the upper-upscale segment for a second consecutive year. The brand does not promote the accolade in its hotels; however, as a collection of boutique hotels, the company sees this as a strategy.
“To the average traveler, we don’t advertise our scores on guest satisfaction and we don’t try to leverage it on a broad basis,” said Mike Depatie, CEO of Kimpton. “To corporate travelers, yes we talk about it. But at Kimpton, we are big on word-of-mouth advertising, and that means there are no advertising dollars used on this.”
By not advertising its placing on the index, Kimpton is reinforcing its image as a boutique hotel group that doesn’t want to appear too corporate. Though once again, the company does relish its placement on the scale and touts it internally as validation of its practices.
According to Rick Garlick, global travel and hospitality practice lead for J.D. Power and Associates, the study looks at everything from satisfaction scores to quality concerns in hotels. Garlick said the index should be used to gauge not only guest satisfaction, but also guest commitment.
When a hotel gets a strong commitment from a guest, Garlick said, that guest is more prone to spend money in the hotel. This means money spent on restaurants, spas and other services. In turn, these guests will be more likely to come back to these properties in the future.
For instance, Garlick said Four Seasons Hotels and Resorts consistently performs well in the category of “costs and fees” and how those relate to guest satisfaction, despite having some of the highest prices in the industry. Their guests are willing to pay more for the service and amenities they are getting. Similarly, Drury Hotels (ranked first in the midscale segment for the ninth consecutive year) scored the highest on the index for satisfaction per dollar spent.
According to Balsley, IHG has done several analyses on the correlation between guest satisfaction and RGI (revenue generating indexes), and found that as satisfaction rises, so does revenue. These increases vary by property, location, occupancy and rate, but the links are strong enough to be considered.
Garlick said the biggest discovery of the study relates to brand loyalty across generations, particularly in regard to millennials, or Generation Y. “There is a belief that millennials are free agents that are not loyal to employers, brands and services, but there has been no data to back that up,” Garlick said. From a survey pool of 70,000 participants, satisfaction scores for millennials were found to be lower on average compared to other generation groups, implying they are more critical of the service they encounter, but brand loyalty, likelihood of return and recommendations were found to remain consistent across generations.
Another factor the study found was that guest satisfaction scores from millennials are heavily affected by encounters with staff, showing a capacity to be more negatively affected by poor staff interactions than other generations. Garlick theorized that the millennials’ younger overall age can mean they don’t always feel they are treated with as much respect as other travelers, or are not taken seriously.
“If you treat a Generation Y traveler with respect and win them over, you could end up with a loyal customer for a number of years,” Garlick said.
The correlation between staff and guests is something Depatie is familiar with, and while he is not sure if it is possible to directly quantify hard numbers of occupancy with guest satisfaction, he is certain that you can find hard links between employee and guest satisfaction. According to Depatie, the happiness of a hotel’s employees directly influences a guest’s experience, and having an employee that feels valued in their environment can have a powerful effect on a guest’s stay.
“One thing is for certain,” Depatie said. “Happy employees give great service and unhappy employees give terrible service.”
BEATING YOUR SCORE
Another takeaway from the index is that the numbers in satisfaction continue to rise—meaning that the brands at the top of their segment have to continue to improve every year to remain there. But, if you are at the top, how do you know what to change?
According to Balsley, the key is to look at as many metrics for tracking guest concerns as possible.
“Six to eight years ago, J.D. Power had just one or two metrics available to see how brands were performing,” Balsley said. “Now there are many tools available, such as social media and internal trackers, and brands are watching all of them.”
With so many factors being scrutinized, Depatie said every hotel is aware of at least something they can do to improve. “There are always places [Kimpton] can do better,” Depatie said. “One of those is the check-in process, which I believe is on the minds of all hoteliers.”
Improvements to the check-in and check-out experience, as well as the guest perception of costs and fees, contributed to a seven-point rise in industry-wide guest satisfaction for 2014.
Garlick said the improvements hotels are making toward guest satisfaction this year are geared toward the hotel industry’s product component, meaning room cleanliness, facilities and services.
“Looking to the future, the number one most important factor for hotel satisfaction is the perception that the guestroom is clean,” Garlick said. “Operators get hung up on price, location, Internet quality and more, but if the guest thinks a hotel is not clean, they will never come back.”
Best of the best
J.D. Power’s North America Hotel Guest Satisfaction Index Study is in its 18th year and tracks hotel guest satisfaction across eight hotel segments: luxury, upper upscale, upscale, midscale full-service, midscale, economy/budget, upper extended-stay and extended-stay. In addition, seven factors are examined in each segment to determine overall satisfaction: reservation, check-in/check-out, guestroom, food and beverage, hotel services, hotel facilities and cost and fees.
The hotel brands that ranked highest in guest satisfaction by segment include:
Luxury: Four Seasons Hotels and Resorts
Upper upscale: Kimpton Hotels (for a second consecutive year)
Upscale: Hilton Garden Inn
Midscale full-service: Holiday Inn (for a fourth consecutive year)
Midscale: Drury Hotels (for a ninth consecutive year)
Economy/Budget: Microtel Inn & Suites by Wyndham (for a second consecutive year)
Upper extended-stay: Homewood Suites by Hilton (for a second consecutive year)
Extended-stay: Candlewood Suites