Sean O’Neill at Skift has done a great job bringing insight into how hotels are thinking about their brands and the products they’re delivering to guests. In a new interview he highlights a major hotel asset manager who wants to see luxury hotels end turndown service and for hotels to eliminate food service.
“So why don’t we close the kitchen, have a great bar, and let people order from GrubHub or Uber Eats,” [Michelle Russo, CEO of HotelAVE (Asset Value Enhancement)] asked. She suggests more properties should install those lockers that keep items hot and cold like they have in Vegas.
For turndown service she notes that a lot of guests check in late and perhaps just have one night stays at luxury urban hotels, so why bother offering it at all? Even where a guest declines turndown, though, the offer and choice is the essence of luxury. Yet what she wants to see is hotels testing removing everything to find out what they can get away with.
Let’s test and remove something and see what kind of feedback it gets to find out the value proposition.
We already know, though, what happens when you cut down on cleaning!
She also wants to automate more functions to reduce staff head count.
“Chat functions for guests [to replace phone calls] exist but they’re not applied widely or well,” she said. “There are tools for taking room service orders online, but they’re not widely applied. Mobile check-in and kiosk check-in still need work.”
Guests accepted lower staffing levels and services during the pandemic, so why not try to make those permanent? They’re pushing back against restoring service.
“We had to start those conversations and say, ‘Look: We’ve been successfully operating and getting good guest comment scores with fewer managers, so what is the rationale for bringing more managers back? Why are we adding all of these extra amenities?’”
The reason this matters – in light of hotel brand standards – is that she’s looking for those standards to get dumbed down. And you can understand the modern hotel chain as looking to maximize fee revenue from hotel owners, and hotel owners looking to benefit from a chain’s branding to attract customers while spending as little as possible on those guests.
When they’re renting the brand, they want the benefit without having to make the investment. The ‘asset light model’ creates a conflict of incentives between brands and owners.
Historically chains required investment and monitored to make sure it was happening. During the pandemic the monitoring fell off. This hotel management executive describes that as chains ‘working together’ with owners. Chains allowed hotels to skimp either out of sympathy for the plight of the owners or out of fear those owners would leave and they’d have greater difficulty attracting new ones.
This collaboration to skimp on guest experience maximizes revenue in the short run, for owners who charge rates based on what guests expect but do not receive and for chains that have happy owners gladly continuing to write checks, but also degrades the value of the brand. And in the asset light model, the brand – which communicates succinctly to guests the quality of experience they’re going to expect, and therefore drives guests to use the brand as a short cut for selecting a hotel – is, effectively, the only value that a chain has in the long run.
And ultimately when you remove services you remove the differentiation between hotels and homesharing. Airbnb has been the greatest threat to the hotel business, massively expanding inventory and competition, yet hotels are responding by cutting costs and eliminating the things that differentiate their product from Airbnb. Go figure.
Don’t think this person could be any dumber. And yet they want to continue charging ridiculous rates and adding resort fees.
“Peek”
The business model of hotels, where a local owner buys the right to use a big brand like Marriott or Hilton, makes aggressive cost-cutting a foregone conclusion. Owners care about short term ROI. Every guest is a PITA. Hospitality is anathema to capitalism.
I say, so be it. Cut more. The reason you see trash overflow into the hallways is because the trash cans in guest rooms are too small. Just buy bigger bins and continue to cut housekeeping expenses.
Motel 6 runs its operations by not even providing shampoo. Guests will adapt. Rip out those wall mounted dispensers and replace them with nothing.
Make fees make sense. Don’t charge a flat resort fee. Meter and charge electricity (some guests crank that A/C). Mark it up 10x from the utility company.
Mandate digital check in and app-based room keys. Everyone has a smartphone now. You don’t need to staff a front desk.
On the flipside, invest in areas that actually drive bookings from high value guests. Remember the reason we stay in hotels is to sleep. Soundproof the rooms and make sure the blackout shades cover the whole window!
The phenomenon you are describing seems to be a feature more INSIDE the United than OUTSIDE. Over the past 3 years I have stayed at Hiltons, Marriotts, and Accor Hotels outside the US and service is still great, a wonderful breakfast is still a feature for “elites,” daily housekeeping still exists. In short, service is still as it has always been. The problem seems to be with properties INSIDE the US.
america, eh right? not a surprise… place heading into disaster
This is eerie. It’s like there’s a Scott Kirby clone uttering this stuff.
The straight answer to Ms. Russo’s Why-not-cut-out-almost-everything question: Because we have Fairfield Inns and such already, and if you make “upscale” hotels functionally the same, your price justification disappears.
If there’s no human staff, no restaurant, no room service, no concierge, no housekeeping, etc., etc. why am I not in a Motel 6 for 20% of her price?
Agree with Don, this is more of a problem with properties in the US. I’ve had much better service and “pre-Covid normal standards” during stays outside the US, even in Canada. There is a ripe opportunity for one company to break rank and be the “Delta” of the large chains, but so far they all seem to be content racing each other to the bottom.
Personally, turndown service has always seemed rather pointless to me, but I guess it’s a matter of personal preference. For me, though, I’d much rather have cheaper rates (or else the money invested in aspects of the property that actually make a difference) vs. spending it on turndown service, though. Especially when there’s already a labor shortage, that labor could be better used elsewhere.
Chat bots, however, are a different matter. 99% of the time, if there’s something that I need to contact a company about, it’s something too complicated for a chat bot to do or else I’d have already done it myself. Those are a complete waste of time. Having good, competent customer service agents – who fluently and understandably speak the language in which they’re supposed to be working – actually does make a tangible difference to customers – and often a very large one.
Having food available on-site also makes a tangible difference to customers, especially when arriving at the hotel late in the day or when staying at more remote properties that don’t have a lot of other restaurants nearby (e.g. most resorts on the Big Island or Kauai.) And, at any rate, I would not think that shutting down in-hotel restaurants would actually save money, as those tend to generate additional revenue. Less of an issue in city centers where there are plenty of other restaurants available nearby, though.
“Let’s test and remove something and see what kind of feedback it gets”
Perhaps customers are all too accepting of loss of guest experience…
…and frequent travellers too keen to support big chain branded properties for their hotel points instead of ditching hotel loyalty programs in favour of local boutique hotels that depend upon their reputation to garner loyal business and not a corporate brand name with ever declining reliability…
I agree with the previous post that turn down service is a waste and something no one needs. Are you REALLY incapable of pulling the sheets down yourself to get in bed or so entitled you want someone to do it for you like a slave? Seriously?! Of all the “first world” problems to get upset about this is about the most minor I could imagine.
Onsite restaurants and food service isn’t even a “free” service being given away for guests. Is it really that unprofitable even at luxury hotels where dinner for two at the onsite michelin star restaurant can cost several hundred dollars and up? Seems like a blanket statement that it is more profitable for hotels to remove a chargable service and let guests order uber eats? If it is really unprofitable whats stopping them from raising menu prices even more!
I’m with Tom. What started as a question for me a year ago has now turned to a complete change in my booking patterns. Why would I book a “full service” Marriott / Sheraton / Westin for $300/night that’s not providing anything like full service anymore, when I can get the same experience at a Courtyard for half the price? Owners will realize, sooner or later, that their “full service” value proposition has disappeared.
So this Michelle Russo doesn’t have the brains to understand what differentiates top-end hotels from motels and an Airbnb? She should stay in a Days Inn and get back to us.
As someone who worked in the hotel industry for 20 years in a manager capacity (I resigned in 2022 due to owner expectations for managers to cover line-level shift as a matter of course…like not temporarily, but as a new way of operating. Cleaning rooms is hard y’all, tip your maid.), the Guest’s expectations for perks and amenities had become untenable when compared to the number of complaints (whether legit or not) requiring full refunds or other expensive service recoveries. If you’re staying at a luxury hotel these days you’re setting yourself up for disappointment, and, quite frankly, you’re doing it wrong. The truth is that most hotel restaurants and bars etc. are money losses, and owners are going to do the least amount possible to meet brand standards. And of course, those “free” breakfasts are not really free, just added to your rate. With ride shares and food delivery readily available and affordable, these days, when I travel, my first look is always AirBnB or VRBO, unless I need to be somewhere super specific, like close to the airport. I’ve only had one bad experience with home rentals (and was refunded without issue), as opposed to multiple terrible experiences at so called “upscale” hotels who only wanted to give me a drink voucher for my trouble. In fact, my most pleasant experience at a hotel in recent memory was at an old school road-court Best Western in Santa Rosa, Texas. I was a walk-in and the room/bathroom/bed was super comfy and extremely clean, and the property was well maintained, for less than $100 a night..
@AC – turndown service isn’t just about pulling sheets down. A light room refresh, make the room welcoming for sleep by pulling the drapes closed maybe turning on some classical music, placing waters by the bedside and perhaps placing a treat there as well.
Can’t remember when i last had a turn-down. Hyatt 10 years ago?? They used to leave chocolates too.
If you are someone who stays away from home a lot it shouldn’t have taken @Gary to tell you this.
I largely stay at Hyatts if I can, fall back IHG.
Hyatt is trying.. but they have still killed house keeping unless you ask for it. Really?? That should be an expectation not a request.
Just a sign of everyone dmnbing down until we’re all dumb enough to put up with it.
Diluting your brand and nickel and dimeing works in the short term but kills the brand in the long run.
But hey, as a budget traveler, I welcome more options. Please note I tend to only book on price so I appreciate greater competition for my precious travel dollars on hotwire, c1 portal, etc.
My experience exactly the opposite of Quinn. 1000s of great hotel stays from luxury to budget, but rather disappointing AirBnb experiences. And since you mention it, No, I am not tipping the staff. No other industry outside food expects me to level up wages. Pay your staff appropriately and jack up the room rate to cover your costs.
Agree with Lenny – this woman is dumb as a doornail. Turndown is a huge plus at resorts where you often shower at the end of a beach day; not so essential in city properties. Labor costs are low in most places outside USA and Europe so it’s a low cost perk with a high payback (guests love it). Ultimately if guests have a great experience they will return and provide favorable word of mouth – which matters at the high end. Ratings matter – both for hotels and airbnb.
Best Western Plus Thunderbird used to have a fun bar with light food, now no food. Goodbye.
Came back from the St Regis San Francisco elegant hotel 700 dollars a night
lovely dining room a little less on the weekend
30 dollars for scrambled eggs but they couldn’t afford butter and used oil of some kind
Eggs were gummy and cold tasted like glue.I get it if they were busy but they weren’t
Bacon was horrible dry and lifeless.Look like it was made days ago and then reheated
Fruit plate horrible.Whatever happened to the 5 star breakfast 🙁 sad
Had better eggs at a Doubletree not long ago
Its time we rebel in the US.I got the its covid speech labor is tough to find
ALWAYS push back on the race to the bottom…. Let them know you noticed the trash in the hall, the $15 breakfast credit that doesn’t buy breakfast, the 20% increase in the resort fee which doesn’t get you a chair , no more lei greeting, the dumbed down tv channel lineup, wine that is the same piffle but now starts at $18/glass, and 4 oz fish entrees at $30+. Stop this woman in her tracks, as you subsidize their employees’ wages with decent tips. Quit parking a car at $55/ day and use Uber. Express your rage when they close the pool, bar or restaurant for a “special event”. Finally, walk, and tell them why, following up with taking names and kicking ass to corporate.
Your alternative is limited service at premium prices, ie: Motel 6 of many flavors.
The fastest growing segment of the industry in the developed world is the “limited service” one. The upscale and higher full-service segments —whether major brand affiliated or independent — have a lot of hotel owners who see the lower margins from full-service hotel operations and find moving closer to (or more into) a limited service operation/portfolio is better for their margins and has little to no impact on their revenues in general.
Even most non-resort “luxury” hotels in high-cost countries seem to struggle with things like a hotel restaurant not being too much of a drag on returns, as people staying in a hotel often have little to no use for a hotel restaurant except perhaps at breakfast time and prefer to eat out for lunch and dinner.
Falling service level in the industry are the natural consequence of owners taking greater pride in their making more money than in their reputation for service/quality.
Horrified by the crowd commenting that they think turndown service is not needed. I’m part of a consulting firm that travels every other week, and we literally have changed hotels as a team (think 20 people booking at $300-500/night corp rates) if the hotel didn’t offer evening turndown. After spending most of the day working, we go back to shower and request a refreshed room to come work in after dinner. Hotels that don’t offer evening turndown are definitely losing on customers, don’t discount the value of large consulting teams that are heavy on travel today.
After COVID, Hotel prices are at record highs and it is infuriating that hotel franchise owners are using COVID as an excuse to take advantage of customers (who think they are getting a superior product) while charging 2-3 times higher than during the pandemic. This is what I see as greed and short term thinking. I am a Marriott Ambassador and Hilton Honors Diamond and many times in the US, have wondered why I bother being loyal to hotel brands when it is practically the same as renting an AirBNB or 3 star hotels in some cases. Overseas continues to be wonderful.
This highlights the dysfunctionality of hotel loyalty programs that are mostly franchised to individual owners. There is a conflict of interest for the hotel to hold owners up to standards cause there are too many loopholes in loyalty (Bonvoy, HHnonors etc) T&C’s and the hotel chains don’t want to lose their precious franchises. At the same time, they want customers to keep returning. This confusion between who exactly is the customer to Marriott Bonvoy, Hilton Honors etc (the franchise owner or the customer) is one of the bigger issues because it becomes cumbersome to enforce standards, which degrades their brand name. I prefer the standardization of the airline industry where a change with Delta Airlines is consistent with their entire fleet and SkyClubs, airports etc because it is run and operated by Delta. Marriott is a big mess. Too many exceptions for individual hotels/brands/locations. Before booking any hotel, I make sure to extensively read reviews because I can’t rely on the T&Cs to know whether breakfast is free, if there is an Executive Lounge, if cleaning is included, because every franchise hotel tries to screw over the customers to gain higher profits despite record high prices.
Mike mentioned “the dysfunctionality of hotel loyalty programs that are mostly franchised to individual owners.”
The biggest structural problem in US hospitality today is not pricing, or corporate red-lining amenities. It’s the tug-of-war between corporate brand-masters and rebellious franchisee-operators who, increasingly, refuse to deliver what corporate says they should, and suffer no outward penalty for it.
Why does this feel avert American attitude to the hoteliers?
Stays in and outside brands in Europe have been excellent.
Hotels that don’t go back to pre-pandemic standards will start losing return business. And Uber eats and Airbnb have been deteriorating for the last few years. I never use Uber eats anymore, and rarely use Airbnb.
“Guests accepted lower staffing levels and services during the pandemic, so why not try to make those permanent?”
Bullsh_t!
Frankly, I see hotels use the universal excuse of COVID to do what they’ve always wanted to do (be cheap) and it ticks me off. Most of those cuts reek of cheapness and I tend to avoid hotels that insist on pretending it’s 2020 as an excuse to skimp. Not that they charge any less. Oh no, we can’t have that.
This woman is a blithering idiot. I pity her significant other.
If I’m staying at a high end hotel, and paying the rate that is commiserate of one, I expect that a restaurant, turn down service, and other amenities be available. Why? Because you’re a high end hotel and you’re charging for it.
Why on earth would I pay the amount equal to a high end hotel and get amenities that a regular or budget chain offers?
This lady is clueless.
Why pay inflated prices at full service hotels when you can get the same stripped down experience at a budget hotel for well under $100 or AirBnB? I actually prefer budget hotels because they don’t attempt to defraud customers by pretending to offer luxury services that they have no intention of providing.
Sad to say but the entire segment between Fairfield and Ritz Carlton is probably going to experience a major shakeup. One percenters can pay $800 a night for room service and turndown and everyone else gets a $10 Jimmy Deans sandwich and and a wall mounted soap dispenser. At least as long as the full-service hotels are owned by institutional investors. Will this eliminate the differentiation between a Fairfield and a Sheraton? Of course, but unless business travelers come back in 2019 levels many of those are probably headed for multi family conversions anyway.
When these hotels were built in the 80s they had multiple restaurants, a club level, and concierge service. It’s sad to see them a shell of themselves. But Americans don’t really have a food or hospitality culture, and our incestors expect a certain rate of return, so it’s what we’re stuck with.
Just like extra innings in baseball, its a permanent “fix”, blame it on Covid and “nothings gonna bring him back…”
Being in the airline business, there are hotel services that I might not use. Depending on where I am, a restaurant…a good restaurant is something I use. I noted at the crew hotel in Melbourne, FL, I was ASKED if I wanted turndown and daily cleaning. WOW…that’s a first! I note that I was in the crew hotel in Phoenix back in October. I was on my own and not on company business. I got the room with breakfast rate. At about $17.00 for breakfast…it WAS HORRIBLE! Yet, I go to London and paid ￡17 for a really good full English breakfast. Both hotels are the same brand. Why can’t the US hotels do the same? I’d pay for it if the breakfast was worth it. If I go to The Cloister at Sea Island, I expect 1st class service from the time I walk in to the time I leave. Sure, turn down service isn’t required but…it comes with the room. At that price…
I agree wholeheartedly with DonATL et al who say this is a U.S. problem and that Europe (and, I’ll add, Asia) are still very cognizant of customer service. I strongly disagree with Clearly about “you get a hotel to sleep in.” I work really hard and work long hours. When I travel, I want SERVICE. I want respect and I want to be catered for. I will pay for it (cash and/or points, but luxury travel is my sole reason for playing this game), but I expect to be taken care of. I want my comfort and enjoyment to be their number one goal. They do it in Europe, they do it at Disney properties, they do it at Nordstrom. The American hotel industry (among others) needs a major attitude adjustment or the boutique hotels and Courtyards are going to be the whole market. (And that idiot woman needs to be fired — she has no clue how “hospitality” works.)
One CEO will eventually figure out that by returning to hospitality and returning to appreciating the most loyal customers, at which point travelers will switch en masses from the hotels that abandoned them.
Only then will the industry return to appreciating those who spend heavily with them for the perks of the occasional upgrade or the simple thank you for your loyalty.
As a hotel owner and operator for 40+ years, I can assure you all that we are not as bad as most of the guests thinks. The biggest issues we are facing enormous brands standards with each and every steps brands has their hands in cookie jar. Years ago brands were hotels marketing armes and our fees were simple. Now we pay more fees and transactions cost. All the points they issues it was paid by hotels. When guest redeem those points we get paid $14 to $40 for the room no matter what our rate is. Brands takes their fees from top revenue including penalties for various reasons. The other major issues we are facing after Covid pandemics is labor shortage, increase in supply cost and deliveries, insurance, govt. Mandates. Granted rates are higher and some of the amenities and services are reduced at the same time our cost of operation has increased more than the rate increase. This is the situation for majority hotel industry in US. Last, brands listed on Wall Street made large profits, but hotel owners are not this gravy train. Where did those $ cam from?
@Pravin – brand standards are relaxed versus 3 years ago
” When guest redeem those points we get paid $14 to $40 for the room no matter what our rate is. ”
1) In general that’s when the hotel isn’t full, and you aren’t losing the opportunity to sell the room
2) They could pay you more for award nights, but then they’d have to charge you more for the points on paid stays
Very American mindset and greed
I think that company should experiment with getting a different CEO that cares about customer service.
@Gary
1) In general that’s when the hotel isn’t full, and you aren’t losing the opportunity to sell the room.
It is not true most of the redemption comes during high season and weekends. Brands made it as last room available till your quota is full for the category.
Also, brands sell the points or give points away for those points we franchisee pay from 5% to 6.5%. Brands charge the guest based on the rate & franchisee get paid upto $40, the difference became revenue for brands.
2) They could pay you more for award nights, but then they’d have to charge you more for the points on paid stays.
It is double whammy where guests feel cheated. Brands charges us more and at the same devalue their points and charges guests with higher points. If everyone started cashing their points in, the top 3 brands will be sold out for next 2 years.