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Hotel Industry Challenges - Doing Things Differently.
By John Hendrie
Thursday, 19th June 2014
 
Hoteliers have three substantial challenges in front of them – one new, one fairly recent and one historical and lingering; In that order, they are AirBnB, OTA’s and your own employees.
 
Wow, did the traditional lodging segment of the industry miss the mark, and, hence the ascent of AirBnB.  We may have solicited feedback from our guests, but the “feed-forward” was give us an authentic, adventuresome experience. 

Nothing could be more real and great fun than an extra bedroom on the Left Bank, or a houseboat on the Rhine, a loft on Haight-Ashbury (or even a sofa), a yurt in the backyard – such a medley of choice and price points.  AirBnB has surpassed 10 million guest stays since its inception in 2008.
 
Yes, there are tax issues and standards questions, but AirBnb will prevail.  In an interview in Lodging Magazine, Christie Hicks, a SVP with Starwood Hotels and Resorts Worldwide, captured the mood.  “They are disrupting our industry in a way, frankly, none of us would have seen coming five years ago, and there will be someone after them and someone after them.  That change means we have to really adapt and understand what’s in the mindset of the consumer, and who is satisfying that need.” 

Ellen Brown, EVP of Denihan Hospitality, suggested the allure within the new sharing economy, saying “it’s cheaper than hotel accommodations and you can exist a little more locally and authentically.”
 
The Online Travel Agencies (OTA’s) changed how hospitality business was conducted, certainly for hotels.  Brand loyalty was dismissed, given to ease of booking and price considerations – best value and consumer convenience are tough to beat. 

OTA’s  are continually recreating themselves and expanding with creative services through technology.  Early this century we simply did not appreciate how quickly the change would occur or how permanent the services would become.  Oh, that electronic distribution supply chain!  Please return to my hotel web site.
 
Lastly, your employee resources are under continual and the usual constraints.  I have always admired the expression from Mr. J. W. Marriott, Jr. to the effect that if you take care of your employees, business will take care of itself. A very reasonable proposition, yet hard to manage.  

We have an ever changing employee pool, disenfranchised people, heavily female, heavily immigrant, multi-cultural and lingual, often times holding down several jobs.  And, we pay them near the minimum wage.  Yet, they are the Ambassadors of our Brand. 

Proud, dedicated people, but should we be proud of our investment in them?  As Ms. Hicks insisted, AirBnB alone is not causing a disruption.  “Whether it’s OTAs or the challenges around visas, or trouble hiring people because we’re not paying, all of that has an impact on what our industry is facing moving forward. So I think we need to be obsessive but not obsessed.” 

This is quite a call to action for an industry which is typically very slow to react and change!

John Hendrie is the author of the LRA blog 'A Guy Walks In'. LRA is a leading research and consulting company in the emerging discipline of Customer Experience Management (CEM). We work with our clients to help them design and deliver consistently exceptional customer experiences in order to drive customer satisfaction, loyalty and advocacy, and company growth and profitability. We have built a range of quality assurance, mystery shopping, research, training and consulting solutions to help them do so.

Today, we are a growing company operating in more than 120 countries throughout the world, servicing our clients from offices and resources in the Americas, EMEA and Asia Pacific regions and helping clients such as Starwood Hotels & Resorts Worldwide, the National Football League, Avis Budget Group, Madison Square Garden, the Cosmopolitan of Las Vegas and Mandarin Oriental Hotel Group deliver exceptional customer experiences. Every touch. Every time. For more information, visit
www.LRAworldwide.com.
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