By Larry Mogelonsky, MBA, P. Eng. (www.lma.ca)
Traveling for work puts me up close and personal with a wide variety of hotels, but even though I love dabbling in the luxury segment, the wallet just isn’t fat enough to make that a year-round thing. Instead, I opt for business-oriented properties, often downtown or near a convention center, and shrewdly designed for the harried guest. As you all know, this is a humungous category of hotels worldwide, and any new features that help optimize revenue for this market are often rapidly gormandized across all major brands.
I could address the omnipresent issue here of whether such widespread adoptions are homogenizing product to the point of making every brand look and feel the same way. But that’s too much for a terse morning read. Instead, let’s focus on the recent trend of giving guests the option of trading in daily housekeeping service for a paltry amount of loyalty points or some other perks.
A recent trip to a major southern city landed me at a major brand’s property near their convention center. Apart from the lacklustre, undifferentiated product, what immediately drew my attention was a door hanger card, strategically placed almost out of view in the bathroom towel stack. Printed herein was an interesting offer: hang the tag before you retire and we’ll skip housekeeping. Your reward? 500 loyalty bonus points.
It’s an intriguing offer, and thinking short-term it makes perfect sense. First, though, let’s do the math using the opt-out bonus of 500 points as an example. Perusing various branded websites for rates in this category, such guestrooms average around 12,000 points in loyalty redemption. Using these two numbers and with a typical ADR of $200 to $225, 500 points translates to a value of roughly ten bucks.
Unless you count yourself among the most die-hard of point-hounds who can see the long-term benefit from repeated usage of this trade-off, the consumer value is fairly negligible. For the road warrior who might only spend two to three nights tops at any given property, such a compromise makes total sense – who needs his or her single-occupancy room cleaned every day? You make enough towels to last you for multiple showers and the bedsheets are still relatively fresh after a single use.
And for the hotel operator, assuming a housekeeping wage rate (including benefits) of about $15 per hour with the corresponding amenity replenishments and laundry costs, the trade-off technically yields a modest return to the hotel operator.
But this numerical reduction in expenses does not factor in the psychological elements of a guest’s stay. Hospitality means providing a product that makes customers feel not only good but great about their experience. Hotels aren’t meant to be ‘just like home’ but better than any regular person’s house. An a clean, tidy room with fresh towels and linens every day is a critical component towards making that a reality.
Managers love this sort of opt-out short-circuiting because of how it looks on a P&L, but they are clearing missing the point of our business. Whoever thought this up in the corporate headquarters should be given a pat on the shoulder for a good attempt at solving our industry’s current woes…and then promptly taken out back to the whipping shed.
Think about it in terms of TripAdvisor reviews where housekeeping is a perennial issue and thus a key criterion for guest satisfaction. If housekeeping is eliminated or bartered off like some commodity, does that also mean that such issues evaporate from users’ online critiques? I highly doubt that!
As well, there is an important employer-employee component here. When a room is bypassed, most of the cost savings come in the form of labor reduction with fewer shifts given to your cleaning staff. This is very demotivating for someone who witnesses the gradual decline firsthand. Such employees who lack the inertia of frequent shifts will ultimately take less pride in their work and are more prone to errors or calling in sick. I’ll let you complete the circle as to how this impacts your TripAdvisor ratings.
A final holistic look on the hospitality industry, let’s weigh this concession in terms of how it relates to our fight against alternate lodging providers such as Airbnb. Stripping housekeeping from the customer purchase further narrows the gap between what’s offered by us and by them. Gone are the days of morning newspaper delivery, free bottled water or gourmet complimentary breakfasts. Without cleaning services, there isn’t much left to distinguish a hotel at the mid-tier level.
On paper, this trade-off will make any pennywise manager smile, but so much of our business can’t be surmised by a balance sheet. We must account for the many intangibles of human behavior and deliver to these emotional drivers. By opting out of housekeeping, you are in essence opting out of your own long-term success.
_______________
This article may not be reproduced without the expressed permission of the author.
Editors note: To discuss business challenges or to discuss speaking engagements please contact Larry directly.
