The latest edition of the Pulse Report showed that lodging demand and pricing are moving in a positive direction, and booking pace remains off the charts.

However, guest review scores are sequentially declining due to numerous operating headwinds and are now -3.5% off 2019 guest satisfaction levels.

The webinar discussion included industry input from Casi Johnson, Chief Operations Officer at M3, and Geoff Ryskamo, Vice President, North America Enterprise, Medallia. Together with Lloyd Biddle, they discussed the interdependence of employee engagement, guest satisfaction, and revenue growth.

Here’s a quick recap of the conversation:

Satisfied Staff = Happy Guests

It’s no secret that employee engagement plus happy guests equal revenue growth. Therefore, a connected commercial strategy must start with how well team members are treated. But in today's uncertain labor market and with soaring inflationary costs, properties are experiencing operational difficulties, and this is impacting the guest experience.

Aligning operational planning and commercial strategy to enhance the guest experience is the most sustainable way to boost revenue.

Casi Johnson of M3 explained how effective forecasting can help hotels see and adapt to the extreme changes in booking pace. “If you can effectively schedule to cover peak demand periods, you're going to take that burden off the team members that you do have. This will alleviate some of the strain and hopefully build in some retention,” she said.

Investment in recruitment and training is also critical when considering the challenge of attracting (and retaining) employees. We know attentive employees improve guest satisfaction.

According to the School of Hotel Administration at Cornell University turnover per employee costs $5,864. And as Johnson of M3 pointed out, “That cost doesn't show up on the P&L, there's not a line item and there's a lot of indirect costs embedded in that. By focusing on retention, you are going to get a better return on the investment for that employee training.”

In addition to training, hospitality providers are also offering more benefits. Johnson explained how medical insurance, tuition fees, and same-day pay are some of the benefits now on offer. And the wage bill is also going up, especially in hard-to-fill jobs. According to 3M, server wages in 2022 are up by 14%, bartenders are up over 11%, and front desk and housekeeping are up by almost 9%.

“It's quite an interesting dilemma when you think about having the right employee mix to offer all those services and to make sure that the guests are happy and what that means for your hotel,” Johnson said.

Ryskamp had further interesting data to add to the discussion: “Medallia carried out a study and 70% of hospitality workers that we surveyed said they're working with less staff than they were before the pandemic and of that same cohort about 40% said they were considering leaving their job, so you just can't hire fast enough in that type of environment,” he commented.

Talking about employee engagement, Johnson said: “Everyone wants to feel good about coming to work and they want to be connected with the company mission so that's where I would put my energy.”

Beware of Brand Switching

According to Medallia, from 2009 to 2019, there was a steady progression in all key performance indicators. “Alongside this, there was reinvestment, both in personnel and capital, to shore up those assets and make sure the guests were just continuing to have a great experience,” Geoff Ryskamp said.

“Over the last few years things have been quite erratic in terms of the scores and guests’ expectations and how they manifest from an experience standpoint,” he added.

This has led to what Ryskamp called ‘brand switching’ – loyalty is on the move. Before the pandemic, it was not unusual for business travelers to have multiple trips already on the books. And they generally booked with the same hotel brand.

“Now we’re seeing that customers are making decisions based on a different set of criteria - and there's more brand switching than we’ve previously seen. There's certainly risk involved in that, but also, I believe it presents this incredible opportunity to regain and actually retain some of that market share that’s shifting a little bit,” Ryskamp said.

Our Pulse Live webinar, which aired on June 16, saw Duetto’s Lloyd Biddle, Director of Partner Marketing, take the audience through what the latest Pulse Report data is telling us about global hotel performance.

Missed the webinar? Register and catch up here: https://go.duettocloud.com/pulse-live-june22