A good reputation can do more than just attract new customers
Reputation can make or break any business, i.e. unless your hotel is named the ‘Thief’ - a highly successful conversion of a historical prison with an unsavoury past to a chic luxury boutique hotel in Tjuvholmen, Norway, where a bad reputation for a unique reason can be good for business.
Like in all businesses, reputation is unavoidable. Reputation to a hotel is the most fundamental thing that determines its success. It takes effort and time to build and is something that can be lost instantly. How do hotels gain a bad reputation? By failing to focus on the two moments where they have their guest’s complete and undivided attention: When contacting the hotel to make a booking and when it is made – the stay itself.
In those crucial moments, what stays longest in the guest’s memory is the interaction, when they request more information or a service, such as check-in, dining in the restaurant or a spa treatment.
Prior to COVID-19, with more hotels popping up everywhere and the intense competition among hoteliers to win customers a simple ‘thank you’ and ‘welcome’ is just not enough for today’s guest. Guests seek more and this search for excellence is what drives them to share their experiences and opinions. Remember, news of bad guest service reaches twice as many ears as praise for a good service experience.
Upto the not so distant past; reviews were usually in the form of plain word-of-mouth, a critic’s opinion or an article in a magazine. However, all this has changed rapidly with the advent of the internet and sites like Facebook and TripAdvisor, where sharing experiences and casting opinions is not only popular, but can also be done in real-time situations.
Now, anyone can easily write a review or refer reviews by other past guests about the hotel during their decision-making process. Today, customers are increasingly choosing products and services based on the quality of the experiences they have with them. Therefore, it is imperative to have a holistic and human-centered view of the experiences you might create for your guests.
Of the several ‘key objectives’ of hospitality companies, investing to acquire new guests, improving guests experiences and upkeep or retention of the guest towards the creation of repeat guests stand out as key metrics to success. Acquisition of new customers which is crucial to the sustainability and longevity of your organisation comes at a cost. For years customer acquisition costs were relatively steady,but now they are very dynamic with more costs going to third parties for group and transient bookings.
Some reckon it is 15-25% of guest paid revenue. This should be of concern as it is 3-4 times what it has been in the past. Encouraging a customer to directly book on a hotelier’s website saves up immensely on distribution costs which ranges between 4-5% (inclusive of website technology up gradations, content personalization, SEO, real time data marketing, social media marketing, consultancy) as against a hefty 18-24% commission given to the OTA. Improving the customer experience and thereby creating repeat guests will drive down the overall cost of chasing new customers only.
Hence the importance of focusing on the pre-digital area and the quality of the experience when the guests are in the property itself will truly generate long-term loyalty, strong review performances and better bottom-line. Potentially it represents a key competitive advantage for accommodation providers, as they compete against each other and against the online travel agents (OTAs) to grab and maintain the guest’s attention.
Ilzaf Keefahs – writes on hospitality related matters that he is passionate about, and likes to share his views with hoteliers and customers alike |
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