As Guest Satisfaction Wanes, Hoteliers Struggle for Answers

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I'm just back from a restful beach vacation, and in scanning the news on LHOnline, I see last week was an eventful one for the hotel business. The story generating most buzz was J.D. Power and Associates' annual survey of guest satisfaction with the lodging industry, and the news was a little disheartening. Dissatisfaction with the nation's hotel product seems to be slipping in several definable areas, namely service on a broad front and high-speed Internet access on a specific level. There should be no surprise in either area. Reversing those trends may be a little tricky, however.

As Laurence Geller, CEO of Strategic Hotels & Resorts, told attendees at the recent Midwest Lodging Investors Summit, the hotel industry—at least his company, the owner of 17 luxury and upper upscale hotels—is finally learning how to do more with less help. When the recession hit, Strategic did some serious soul-searching to find ways to stay alive. The answer was a drastic cut in labor costs, mostly fueled by elimination of many middle-manager positions at the property level. The company survived, the luxury segment rebounded quickly, and Geller is sticking to his guns. He told the MLIS audience he has no intention of re-staffing his properties, even though business has improved.

He makes a good point. Even if guest satisfaction scores suffer a little, it makes fiscal sense to avoid the age-old trap of staffing up to or even beyond pre-downturn levels. Smart managers find new ways—technology, cross training, etc.—to get the same levels of productivity from fewer employees. To do otherwise is, of course, easier but also lazier.

The Internet access issue is just as serious a problem, but no one seems to be tackling it the way Geller and other owners and managers attacked the labor situation. Despite arguments to the contrary, many hoteliers continue to offer free Internet access but do it on the cheap. They'd rather let customers complain publicly or privately than either pay for additional bandwidth and technology to keep the service free or start charging guests.

As I've said before, the expense of Internet service is only going to increase, and probably exponentially, so hoteliers need to get their heads out of the sand and find solutions that probably involve charging at least for enhanced HSIA service. They key is selling guests on why this is necessary. So far, however, no one seems to be willing to be a pioneer. Failing that, the result will be further frustration among guests and continued slippage in satisfaction scores.

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