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How Much Are Hotel Guests Worth?


Customized service and the value of loyalty for life.

Osvaldo Torres, November 2008

How much are our guests worth?  This question is asked at every Hotel. For this type of business, profit varies according to guests’ behavior. It increases every time a new guest checks in; it decreases when a guest leaves or doesn’t return; and it is strengthened when guests show clear signs of loyalty. 

Guest management is increasingly relevant within the Hospitality industry, establishing a relationship intended to take advantage of guest’s potential life loyalty. Those hotels that have prevailed and successfully established themselves within the increasingly competitive hotel market have focused their efforts on meeting customers’ needs and expectations. Offering highly customized services that generate a positive impact on guests makes them return, establishing solid long-lasting ties, i.e., it allows turning guests into sources of income for life. 

In the Hotel industry, profit is mainly derived from the sale of nights of stay to guests; therefore, high and steady occupancy rates guarantee the hotel’s profitability as a business. Guest retention and loyalty strategies are increasingly relevant in work guidelines at hotels focused on retaining the greatest number of guests and turning them into loyal customers.

The more profits the loyal guest generates to the Hotel, the more valuable he becomes, depending on the frequency and length of stay. Therefore, it is necessary to consider the reasons why a guest not only chooses the same hotel at subsequent stays but most significantly: why does he/she choose the same tourist destination? 

Motivation behind the choice of a specific destination is determined by the purpose of the trip: business or leisure. Guests on business trips are more likely to choose the same destination, as the choice is directly related to progress with a particular deal, i.e., the choice of destination is determined by a commercial interest. 

Personalized assistance for this type of guest is focused on the micro-environment: creating the necessary conditions as to guarantee the guest’s comfort and satisfaction. Among other, this type of assistance includes: secretarial aid, preparation of the room for meetings, availability of state-of-the-art technology –fax, wireless internet connection, LCD screen for presentations, printer, photocopier-, transfer services to attend meetings, laundry and ironing of items of clothing, and creating a relaxed atmosphere after a hard work day. 

While the guest’s macro-environment – activities that take place outside the Hotel- is not the deciding factor when it comes to choosing the same Hotel on the next trip, it must anyway be taken into consideration as, if the quality of the services provided outside the Hotel that were recommended meets the guest’s needs and expectations, he/she will be more responsive to a Hotel that has a clear understanding of guests’ profiles and preferences, thus experiencing full satisfaction.

The fact that these satisfied guests recommend the Hotel is also very important, as it guarantees that their company will continue to choose the Hotel or that it will be chosen by other companies making business in the same tourist destination, reducing the cost of attracting guests.

As regards guests who travel for leisure, motivation for choosing a particular destination depends on a variety of factors, such as: recommendations, socio-cultural interests, geographic attractions, and so on. Personalized assistance is focused on both the guest’s micro- and macro-environments.  A guest that has had a satisfactory experience at a Hotel (i.e., in the micro-environment) but has had problems in the macro-environment  –bad service at restaurants, troubles with reservations, delayed tours, problems with local airlines, etc.- is not likely to recommend the destination or choose it again. 

Preparing the guest’s profile through personalized assistance in the micro-environment allows us to get to know the guest deeply so that any suggestion related to the macro-environment may exceed the guest’s expectations and positively impact on his/her level of satisfaction. The suggestions and recommendations must be in line with the Hotel’s quality standards. An adequate and systematic monitoring of the guest’s satisfaction level in connection with the macro-environment allows validating the quality of the services recommended and, in turn, provides valuable information to be incorporated into the guest’s profile for future reference. 

A guest with a high level of satisfaction in the micro- and macro-environments is likely to return to the same tourist destination, stay at the same Hotel, and recommend it, thus ensuring continued business with the establishment, increasing his Value for Life and, therefore, the value of the Hotel as business. 

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Contact:

Osvaldo Torres
Hotel Butler
hotelps@gmail.com

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Also See: Murphy's Laws Can Be Infallible in the Hotel Industry / Osvaldo Torres Cruz and Mariana Stachuk / October 2008
The Active Role of the Butler in Today's Hotel Industry / Osvaldo Torres Cruz / July 2008
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