Value in the hotel business
For my capstone project I have had to do a lot of research into the luxury hotel industry and something that one of the articles said really struck me and reminded me of this class. It was talking about how, since the recession, luxury hotel spending has been changing. Before, people who could afford extravagant stays in 5-star hotels were willing to stay in a fancy hotel for the sake of it being fancy. Now, though, people are much more cautious about their money and aren’t willing to spend it on meaningless thrills. Consumers are spending much more conscientiously and looking for a value for the cost.
I think this is something interesting for hotels to consider. I think it shifts the focus of what’s important both in terms of what the consumer wants and what the hotels need to invest in. For example, so much of the hotel experience relies on the quality of the service…hotels that can improve and, more importantly, customize their service can create an unparalleled experience for their customers (and thus create long lasting value). With the new technology emerging today that is becoming increasingly integrated into consumers lives, hotels have a fantastic opportunity to engage with customers and understand their needs and desires.
In class we’ve talked several times about how well the Ritz Carlton does this. In fact, great, customized service is somewhat of a strategic minimum for that class of hotel. But what if, with technology, 4 star hotels can become a player in the customization game? True, it may be a more daunting investment for a 4 star hotel, but it may be quite a prudent one. Many business travelers stay in 4 star hotels (and they stay in them often). If these hotels could track their stays (not in a creepy sense) they could predict the things the business customer wants in his room. Not only would that increase his satisfaction with the hotel brand, but it also could convert him to a user of the hotel for his leisure vacations. If the service is good enough at that hotel, he could be willing to forego a 5 star in order to get that service and that value from the 4 star hotel he is used to.