By Adam and Larry Mogelonsky
In the realm of luxury properties, charging around the $500 per night price range has come to be expected for any brands around the world since the pandemic, but the pursuit of rates exceeding $750 or $1,000 per night is now a strategic objective. But with great rate comes great expectations. Ergo, owners and operators in this space understand that guests paying in this premium range demand more than just the basics.
Guest expectations for this $500 to $750 range encompass not only a remarkable lobby and well-appointed rooms but also enhanced services and upgraded amenities. Premium dining and spa services are integral components of this product offering. However, the linchpin remains service quality.
Achieving rates above $1,000 per night and sustaining five-star, four-figure luxury demands substantial financial investments in operating expenses (opex) and capital expenditures (capex) for an enhanced guest experience. The challenge lies in allocating funds from elevated rates back into the guest experience to fortify the new rate structure.
Setting aside funds for future property improvements becomes a delicate dance, especially since competitors likely pursue similar strategies. If $500 rates are becoming the norm in your market, understanding that heightened guest expectations accompany these rates is crucial. Now is not the time for cutbacks; instead, maintaining high standards and building on a good reputation, year after year, is imperative for reaching the coveted $1,000 per night threshold.
One pivotal aspect is ensuring daily housekeeping with turndown service, a non-negotiable in the $500 stage. Demonstrating value within this range is essential before aiming for $1,000 per night and maintaining that rate as a floor (not a yielded ceiling). Achieving this involves finely tuning operations to be in top form as you approach the four-figure threshold. Small touches, like a personalized turndown service, play a crucial role in increasing the perceived value of the guest’s stay.
Implementing turndown service is just one element of the comprehensive amenity package required during the half-mille stage to achieve full mille status. As a GM or above-property leader, breaking down the journey into specific operational areas and addressing them systematically is crucial for success.
Considering the guest journey, key questions for senior staff include:
1. Prearrival: Are effective prearrival programs and system integrations in place to anticipate guest arrival times? Have guest preferences been detailed, and have their needs, such as dinner reservations, been addressed? Is the room inspected, and is a personalized welcome gift dispatched?
2. Arrival: Is the room ready at the guest’s anticipated arrival time? How will the guest be greeted, ensuring a lasting impression beyond their stay?
3. Stay: Is daily housekeeping aligned with the guest’s schedule? Can you find opportunities to greet the guest during their stay? How can you make the daily housekeeping turndown service unique to the property?
4. Departure: How can you make the departure easy and memorable? Consider a small token that reflects the property’s key features, such as a keychain with an imprinted cork for a property with a strong wine cellar.
5. Post-Departure: What incentives can you offer for a return visit? How can you leverage guest insights for personalized encouragement? Consider providing a departure gift emblematic of the hotel.
While capital expenditures are crucial for reaching $1,000, its operational expenses and embedded operational capability that will sustain you at this level. This involves meticulous hiring, training, the formulation of new SOPs, and steering the cultural ship towards excellence. Proceeding diligently to address each detail of the guest journey ensures readiness for charging above $1,000 year-round and long before investing in renovations or property improvements.
