Some hotels have been practicing shrinkflation, giving you less for the same or more money.
Jeff Bezos says the biggest mistake businesses make is not focusing most on what customers want. However Marriott’s CEO – who says workers make too much money and guests need to have more sympathy for hotel ownership groups – says his chain needs to balance “the expectations of our guests..and the financial realities that our owners and franchisees face” which means “hotels might have a different way of doing business going forward” with brand standards modified to “consider franchisee feedback and..focus on reducing costs” with moves like “elimination of daily housekeeping at certain properties.”
Two hoteliers and hospitality consultants are pushing back, making the case that the hotel industry is living a big lie (paywall). They’re charging pre-pandemic rates, still marketing themselves as full service products, but keeping Covid Cuts in place. And that needs to change. Their basic argument,
- Hotels that asked guests to sacrifice service due to the pandemic should return that loyalty after the pandemic, delivering the product that guests sacrificed for.
- Hotels that used to be luxury, but no longer offer luxury services, should no longer claim to be luxury. Offer the product and business model you want, but be honest about it.
- Quit claiming your cutbacks are due to Covid safety when everyone knows that’s a lie.
[U]sing the pandemic as an excuse to justify long-term changes to the public. There is no question about the effect this pandemic has had on all industries. For two years now, guests have graciously accepted limited services because they knew what we were fighting against. Now, as we slowly return to normality, don’t we owe them the same promise and product that made them loyal to us?
Our two other concerns are asking the customer to change their expectations to accommodate our business needs, rather than re-positioning our product and maintaining pre-pre pandemic room rates while offering far less in exchange, thus not rolling the savings from costs associated with reduced operations to the guest.
If we choose to limit our services because we find it is a better model for the business, we must re-align our positioning to fit our new offering. If a luxury hotel that charged $300 a night for a room with daily housekeeping services and in-room amenities pivots to limited housekeeping with no mini-bar or in-room dining, should it not downgrade it’s positioning to a mid-level or limited-service hotel?
However hotels need to differentiate themselves from each other and from home rentals. They do this by offering service, convenience and luxury. Otherwise they cede the market to their biggest rival. I had a younger traveler not used to luxury stays comment to me on a recent experience at the Park Hyatt in Paris. She said she felt important staying there interacting with staff especially the concierges. Hotels need their next generation of customers, and not to turn off the ones they have.
The authors conclude, “we fundamentally disagree with the premise held by some industry insiders that guests must accept a lesser product as the new normal without a shift in cost.”