GuestSpan Speaks!

I’ve talked to a lot of hotel managers and owners, and when it comes to new technology the biggest barrier is not actually price – it’s installation.  Literally, you can offer your new gizmo for free, and they’ll turn you down; but when you tell them how easy installation is, they seem to perk right up.  This is why software-as-a-service (SAAS) is so cool: all the hard parts have already been handled.

Take GuestSpan’s digital concierge, iRoom, for example.  iRoom takes ten minutes to install at a property.  And by ten minutes, I mean it takes ten minutes for GuestSpan to call your property’s wireless administrator, email them the web link, and confirm that it’s running correctly.  Poof – iRoom is now bringing local information to all your hotel’s internet users, and you spent that time drinking coffee.

Do I need new equipment for iRoom?

If you’ve got wireless internet, you’ve got iRoom.

Does it use up any of my bandwidth?

Nope.

What if we want to add our own content, or make recommendations to our guests?

Great! Send us your content, and we’ll have it updated in about ten minutes.

How will you update new information?

We manage live data feeds that automatically update at every location.

What if iRoom is temporarily out of service for any reason?

Your internet is still running; your guests simply move on to their emails.

What about information security?

We have supermen protecting our stuff, and hackers can’t get to you through us anyway.

What about hardware security?

Our gear is stored in a secure location in the Western United States.  You can have a tornado, and you’ll still have iRoom.

What about terrorists, aliens or apocalyptic fire storms?

See above about our supermen.

What about –

What about –

What about –

What about –

Relax, it’s handled.  Now go to that mix-n’-mingle your admin scheduled for you.

First, let me tell you that international travel is easy. The vast majority of the human population has good taste in food, they don’t like to run over pedestrians, and 70% of all billboards feature pretty faces and cell phones.

Beijing is my Paris. There’s a surging optimism in the air, mixed with old-world charm and the brick-and-mortar feel of Philadelphia, and all of that in a city four times the size of New York. These are my top ten excuses to go back, again and again:

1. South Beauty, a restaurant so good I started looking for jobs in Beijing
2. That really cool tepanyaki place that Vinny took us to
3. That really cool Tibetan restaurant that our guide showed us
4. That really cool Uighur restaurant Vinny showed us on Ghost Street
5. The Forbidden City tour, thanks to our guide
6. The Badaling section of the Great Wall, again thanks to our guide
7. The Peking Duck restaurant, courtesy of one of my professors
8. The Pearl Market (much better than the Silk Market), where I got a great deal on some silk and pearls for my wife and daughter
9. The Brown Door, a restaurant Denny and I accidentally found next to the Pearl Market
10. The Chinese acrobat show, which our guide found for us – you know, the one where twelve girls ride around the stage on a single bicycle? Check it out on youtube, it’s pretty darn fun.

If you’ll notice, almost everything on the list was something that someone else showed me. If I had been flying solo, I would have been stuck with hotel food (and prices!), no idea how to shop for anything, and nothing to do but watch the news. There was a Starbucks right next to my hotel, by the way. It was fine, but it didn’t make the Top Ten list. Oh, and the front desk people were unbelievably charming, but their English wasn’t superb, so getting local information from them was still a challenge.

If only there had been some kind of technology available in my room where I could explore the city – not all of it, maybe just what’s within a three-mile radius – and see if I could venture out on my own…

Now, here’s a fun puzzle – try replacing “Beijing” with “Omaha” and see how quickly this article translates to your last business trip experience.

[NOTE: I emailed Vinny, to see if I can get the names of those other restaurants, which I’ll post when he replies.]

I have to pull the MBA card for a moment and respond to Stephen Hennis’ July 20 blog* about room rates and occupancy. The main gist of his blog is to prove that dropping rates to increase occupancy can actually hurt your RevPAR – which is a good message, because it’s correct in theory, and I’ve seen a number of hoteliers hold prices to their benefit.

For the record, I think he’s 85% right.

How Stephen is right:
Aside from the data analysis in his blog, there is the issue of cost structure. The folks in the supply chain world have a term called “Best Operating Level,” which basically means the level of production with the least per-unit cost. In the hotel world this translates to occupancy percentage. I’ve talked to a number of hoteliers, and most of them tell me their optimum occupancy is around 70-80%, which I have illustrated** below:

If you use the market demand curve as a guide for pricing, you can determine an estimated window of profitability that (generally) peaks at that best operating level (see below).

So Stephen is right – it doesn’t matter where the demand curve falls, dropping your rates to increase occupancy will cause you to lose money. And since so many hoteliers wildly push for sold-out nights as a starting strategy, holding rates and scaling back to a more profitable 70% occupancy is certainly a smart play.

Now, for that 15% of wrong:
Of course, if demand drops so low that you can’t operate above your break-even occupancy level, you’re in enough trouble that holding rates won’t do any good. So you can hold, but there has to be a better option than continuing to bleed out of principle. This is why, in both good and bad markets, I’m a big fan of a simple, two-step process.

*Increase demand by adding value, then

*Regulate occupancy back to optimum levels through pricing.

Increasing value is the trick of course, because so many value-adding features are so cost-intensive; and who can really afford to spend money when the money is tight? I confess I hold glibly to the idea that the best values can cost little or no money at all. For example, organizing communications to increase service response time can increase customer satisfaction without costing a dime. It’s a great strategy, and it won’t come at the expense of your room rates.

Shameless, self-promoting plug: GuestSpan’s iRoom has a quantified positive impact on customer satisfaction, and offers a cash-positive return on investment. Check it out at www.guestspan.com/iRoom!

*Stephen’s Blog can be read at http://www.hotelnewsnow.com/blog.aspx?PageType=Blogs&a=117&b=3704

**The illustrations are based on Bob Bobson’s Sleepy Mountain Inn, a cozy boutique at the base of the Misty Mountains, near the Mines of Moria.

John Ely wrote an article that was featured in Hotel and Motel Management. The article provides a view into a stay at a conference hotel in which he experienced very good customer service.  However, he observed a problem between the guest service staff and another guest, and this experience still sticks out in his mind.

On the one hand, his observations are likely understandable by most of us.  Humans seem to allow the tarnish of one small event to upset the shine of a beautiful object.

On the other, as I read, I couldn’t help but pity hotel managers worldwide.  For the most part, guest are a pain in the neck and necessary evil.

Oh, of course, 90% of the guests in the hotel are pleasant and may not even require any guest service interaction.  But, the other 10% seem to have very interesting and unreachable expectations.

So, guest dissatisfaction is a way of life and will be until the end of time.

In the end, I commented to a friend of mine that I can’t believe that an industry as mature as hospitality would feature this article at the top of the daily newsletter.   Let me be clear.  I don’t begrudge Mr. Ely’s observations nor recommendations.  I just came away from the article wondering why it is so hard to consistently deliver on this concept.

What do you think?  Was this article something that is “just in time to make our hotel better,” or is it discouraging that the industry needs to remind us of the mundane tasks?

I have been reading a lot of marketing articles, blogs, white papers, and books lately. All in an effort to become better equiped to bring GuestSpan’s solutions to market and make the customer want to buy. We have conducted market research, spoken to hotel owners and travelers, attended trade shows and conferences, and pretty much talked to everybody we could to promote our concept and gauge market reaction.

It has occurred to me in all of this that all of the time and effort we put into cleaver marketing schemes and research is really an effort to get back to the days of the country general store. We’ve all seen them in movies. And some of us have even lived in small towns that still have something like them. In early America the general store was the hub of economic activity in small towns. Everything happened around the store- mail was delivered there, telegrams were sent and recieved, and every good imaginable from animals to household cleaners were sold there. But the centerpiece of the general store was the shopkeeper.

The shopkeeper knew everyone in town, knew what they bought and sold, knew who the sent mail to and recieved mail from, knew where they lived and what they did for a living-He knew pretty much everything. It wasn’t this knowledge, though, that made the shopkeeper so good at what he did. He really knew his customers. He lived with them. He knew, for instance, that Mrs. Jones hosted a party every Thursday and liked to serve carrot cake. So he made sure that he had it in stock and fresh for her when she came into the store. He also knew that the Smith children didn’t care for licorice, but liked horehound. So when Mr. Smith came in for the groceries there was always a package of horehound sent home with it. It was these little personal touches that made the shopkeeper indispensible.

Modern technology and the supermarket essentially did in the little shopkeeper, and ever since then businesses have been trying to get as close to their customers as he was. Technology has come a long way in helping business accomplish this, but there is still a great deal of distance between the business and it’s customers. I think that when we truly start to understand our customers one an intimate level, for instance, knowing which hotel guests like to order extra pillows, and which restaurants the most frequently visit when they stay at our hotel that we will truly be closer to the kind of relationship the shopkeeper had with his customers.

This is something GuestSpan is striving to deliver to the hospitality industry. I don’t know what the end game looks like at this point. But bringing guests, hotels, and the surrounding community closer together makes things better for everybody.