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Summer 1998 - KPMG, American Hotel and Motel Association (AHMA), and the Educational Institute (EI) jointly sponsored a benchmarking survey to address common practices in the hospitality industry for recruiting, training, staff retention. revenue enhancement. and guest retention. The survey targeted hotel companies with properties dispersed throughout the country. Approximately 230 responses were tallied, resulting in an assortment of fill-service properties including convention / conference, all suites, and extended stay. The properties ranged in size from less than 100 to over 500 rooms, and were spread across locations from highways to city centers.

The responses to the survey were analyzed and some of the general findings are listed below:
 

The transient - corporate / commercial group was the largest customer segment and comprised 30% of all room nights. The group - corporate segment followed with 25% of room nights, and the transient - leisure group comprised 15% of all room nights.

Sources of Business/ Revenue Enhancement

Marketing Enhancement Programs

Overall, the most widely used marketing programs reported were airline GDS systems which are currently being used by 86% of the respondents. On-site computerized revenue yield management systems were also being used by 72% of all respondents. Other programs in use varied from credit card company promotions and packages (69%), hotel chain Web sites (67%). centralized revenue yield management systems (60%). and hotel-specific Web sites (38%). Although 62% of respondents indicated they were not using hotel-specific Web sites, it was the number one planned program for the future.

Note that the airline GDS system was the most widely used marketing program (86% of the survey respondents) even though it contributed to only 10% of annual occupied room nights.

Marketing Distribution Channels

According to the survey respondents, the top marketing channel as a percentage of annual occupied rooms is the on-premise sales department, accounting for approximately 25% of all rooms sold.

One notable difference with those respondents reporting GOP greater than 40% of total revenues is that the percent contribution to occupied room nights from the on-premise sales department increased to 37%.

Note that Internet Web sites were only a nominal contribution to occupied rooms, although they were the number one planned marketing program for the future.

Effectiveness of Guest Satisfaction/Guest Retention

Marketing Strategies

The effectiveness of various marketing strategies was evaluated based on a scale of not effective, little to somewhat effective, and effective to highly effective. According to this scale, approximately 67% of all the respondents thought frequency stay programs were effective to highly effective. In comparison, 43% of the properties with GOP greater than 40% labeled television advertising not effective, versus an average of 2l% of the survey population.

Of the urban respondents, 66% labeled guest frequency stay programs effective to highly effective. In comparison, only 44% of the resort respondents and 37% of the suburban respondents rated frequency stay programs effective to highly effective.

Of resort properties, 34% rated weekend "get-away" packages effective to highly effective, and 37% of suburban properties rated the hotel chain Web site as effective to highly effective. Of resort properties, 31% also rated hotel chain Web sites effective to highly effective.

Note that although 67% of respondents labeled frequency stay programs effective to highly effective, their overall contribution to occupied rooms was only 8%.

Measuring Guest Satisfaction

Respondents indicated that the most widely used measure for guest satisfaction is the guest comment card which is placed in each guest room. Of the respondents, 97% currently use this measure; however, only 3.8% of the surveys are returned.

Of respondents, 84% indicated that they hire an outside firm to perform guest satisfaction studies, and 67% of respondents report that the guests are requested to fill out a satisfaction survey upon checkout. An overwhelming 63% of hotels surveyed conveyed that they do not survey past repeat guests who haven't visited in several months.

Promoting Repeat Business

The most widely used approach to promoting repeat business was man-ager acknowledgment of in-house repeat guests, utilized by 87% of hotels. Recognition of repeat guests special needs through tracking guest history was also commonly used by 86% of respondents, and a hotel company-wide frequent stay program is not far behind, with a popularity of 82%. Other approaches used are free upgrades for repeat guests (79%). and special "hotel-specific" club memberships for repeat guests (31%). It is interesting to note that 56% of the respondents did not even consider using a hotel-specific club membership for repeat guests.

In addition to the information provided in this article, KPMG, along with the AHMA and EI, are currently conducting additional analysis that will supplement the data discussed in this article. The completed report of the survey will be published later this year.
 
 

The Real Estate Report is published by KPMG's National Real Estate, Hospitality, and Construction Practice. © 1998 by KPMG Peat Marwick LLP All rights reserved. For additional information email KPMG.

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