Hotels try new ways to earn loyalty

Are you struggling to keep prices up this year? No matter what business you are in, this article by Elizabeth Olson from the New York Times illustrates how added value extras could help you create loyal customers, and avoid price wars and discounted products. Click here to view the article in its original context, or scroll down.

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When Greg McHale checks into his hotel room after a day of business travel, he expects what he calls the “wonderful and bizarre,” namely complimentary Snickers bars, Diet Pepsi and, sometimes, a compact disc of his favorite electronic dance music.

For Kimpton Hotels, it is a small price to pay for the loyalty of someone like Mr. McHale, a Web entrepreneur who spends 50 or 60 nights a year on the road. And for Mr. McHale, the personal touches — part of the hotel chain’s loyalty program — make it worth his while to seek out Kimpton’s hotels.

“The level of personal attention really blows me away,” said Mr. McHale, founder and chief executive of Good2gether, which connects nonprofit organizations with donors and volunteers. “So if there’s a Kimpton in town, that’s where I’ll stay.”

Not all hotels go to such lengths to please their guests, but this year most are stretching their creativity to attract and, perhaps more important, retain guests. Hotels have been particularly hard hit by the drop in business travel, and brand loyalty has often given way to practical cost concerns as companies have cut expenses.

Only 36 percent of business travelers said they were brand loyal this year, compared with 42 percent two years ago, according to Henry H. Harteveldt, a travel analyst for Forrester Research. “And 2010 is likely to be more difficult for hotels because companies are telling their employees that every penny saved means fewer people laid off or fewer cuts in pay.”

Hotels are responding by offering free nights, upgrades and loyalty points. Many hotels, especially the high-end chains, are introducing twists to cultivate customers. Amenities including free breakfasts, no-fee Internet connections, late checkouts and paid parking are being bundled in business traveler packages. Marriott Hotels, for instance, calls its package “Business Boost,” while Hyatt Hotels has “Business Plan” and Sheraton Hotels “Road Warrior.”

As part of its package, Hilton’s Conrad Chicago Hotel is giving guests their choice among best-selling books, and a personal shopper is available to help select gifts for those left at home.

Beyond packages, some hotels are trying to make stays more enticing by reducing fees for the minibar, subsidizing some meals, offering free in-room spa services or free dry cleaning. The hotel industry is trying to keep room rates stable, which is not easy. The average occupancy rate in October was down 6.2 percentage points to 58.1 percent, and per-room revenue dropped 13.8 percent to $57.57 from the year before — the worst numbers in more than two decades, according to Smith Travel Research, in Hendersonville, Tenn.

To try to hold the line on rates, hotels are offering guests more for their money.

“It’s about offering added value rather than lowering rates,” said Sam Shank, chief executive of DealBase.com, an online search engine for hotels. “When travel fell after 9/11, hotels dropped their rates and it took a while for them to bring those prices up again. They don’t want to go through that again.”

Many corporations have room rate arrangements with hotel chains, but their employees typically claim the loyalty points for personal use, especially for long weekends or upgrading to concierge floors, where they can have a nicer breakfast, access to snacks and, in the evening, a glass of wine with hors d’oeuvres.

Loyalty points are a major selling feature for many travelers, said Don Berg, vice president for loyalty for Intercontinental Hotels Group, the world’s largest hotel operator whose brands include Crowne Plaza and Holiday Inn. The group has 47 million club members.

About 90 percent of the points are redeemed for personal use, he said. The hotel group, taking a page from the American Express and Visa rewards programs, also offers members special access to concerts and sporting events. Starwood Hotels has a similar program.

“People have guilt over being away from home and family, and this is guilt-free currency to make up for that,” Mr. Berg said. “No expiration on our loyalty points is, by far, our most popular feature.”

William R. Snider, a Houston software consultant, was able to use his loyalty points from Holiday Inns to indulge his love of baseball. He used his points to bid on, and win, World Series and All-Star game packages that provided accommodation, meals and transportation and also allowed him to mingle with players.

“I had a blast,” he said.These awards make me want to stay at Holiday Inns, if at all possible.”

Among the most inventive in catering to customers are the high-end properties. Four Seasons Los Angeles at Beverly Hills, for example, will store a guest’s suitcase between visits, the hotel’s general manager, Mehdi Eftekari, said. “So if you are traveling between Los Angeles and New York or London, you always come back to freshly washed and ironed clothes packed away in your suitcase.”

An array of exercise gear, including socks and shoes, is available to guests so they do not have to worry about smelly clothing, he said.

Kimpton offers specially prepared dinners for its most frequent guests, including one recently in Manhattan for top-tier female travelers. The chain has also introduced weekend trips like the one in October for its most frequent travelers and their spouses, in Oregon’s wine country. The wine-tasting getaway came with meals made by Kimpton chefs, and a balloon ride over the vineyards.

Paul Seus, a management consultant from Chicago who attended the Oregon weekend with his wife, Amy, said Kimpton’s special treatment cemented his loyalty.

“Kimpton called me and asked me if I would like to do something special,” Mr. Seus said.

“I’ve traveled my whole career, and I used to stay, well, wherever,” he said. “Now I’ll only stay somewhere else if I can’t find one of their hotels.”

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What do you think? Do you have an idea for how to implement a scheme like this in your business? Have you had a surprise experience like this in a business you’ve used recently? Share your thoughts here!

What makes the Ritz-Carlton hotel chain so special?

Having just launched the St Andrews Standard, we at the Skills Academy currently have ‘service’ at the front of our minds.  Here’s a great interview with the CEO of the Ritz-Carlton hotel chain, explaining how he trains, motivates and empowers his staff to provide excellent service to their guests.  For the article in context on ‘Forbes’, click here. Otherwise, scroll down to read more.

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Ritz-Carlton has become a leading brand in luxury lodging by rigorously adhering to its own standards. It is the only service company in America that has won the Malcolm Baldridge National Quality Award twice, and Training Magazine has called it the best company in the nation for employee training.

Its unique culture starts with a motto: “We are ladies and gentlemen serving ladies and gentlemen.” One of its remarkable policies is to permit every employee to spend up to $2,000 making any single guest satisfied. Ritz-Carlton codifies its expectations regarding service in “The 12 Service Values,” “The Credo,” “The Three Steps of Service,” “The 6th Diamond” and other proprietary statements that are taught to all 38,000 employees throughout 73 properties in 24 countries. Simon Cooper, who has led Ritz-Carlton for the past eight years, talks about what makes Ritz-Carlton, well, the Ritz.

Forbes: What is the Ritz-Carlton model?

Cooper: We focus on three fundamentals. First, location–making sure we get absolutely the best location, where our luxury customers want to stay. Second, product–building the right physical product for what our guests want today and what they will want tomorrow, which means an investment of between $500,000 and over $1 million per room. That’s the platform. Third, people–our ladies and gentlemen serving ladies and gentlemen. They animate the platform. But you must get the first two right. If you’re not in the right location, or if you don’t have the right physical product, then employees, ladies and gentlemen, can only do so much.

How do you ensure everyone is on the same page?

We use what we call “lineup,” which is a Ritz-Carlton tradition. The concept comes from the early restaurants of France, where the chef got his whole team and all the waiters and waitresses and the maitre d’ together at 5:30 in the evening. It’s a sort of round table. Everybody is there. The chef communicates what they are going to be serving. For the Ritz-Carlton, we want every single hotel, everywhere in the world, every partner, every shift, to utilize lineup, which typically takes around 15 minutes every day. Part of the lineup everywhere around the world is a “wow story,” which means talking about great things that our ladies and gentlemen have done. That is a wonderful training and communication tool, where every department layers on the department message. And it’s based on having the same message everywhere, every day, and then each hotel layers on its own message.

How do the ladies and gentlemen focus on service?

We entrust every single Ritz-Carlton staff member, without approval from their general manager, to spend up to $2,000 on a guest. And that’s not per year. It’s per incident. When you say up to $2,000, suddenly somebody says, wow, this isn’t just about rebating a movie because your room was late, this is a really meaningful amount. It doesn’t get used much, but it displays a deep trust in our staff’s judgment. Frankly, they could go over that amount, with the general manager’s permission.

The concept is to do something, to create an absolutely wonderful stay for a guest. Significantly, there is no assumption that it’s because there is a problem. It could be that someone finds out it’s a guest’s birthday, and the next thing you know there’s champagne and cake in the room. A lot of the stuff that crosses my desk is not that they overcame a problem but that they used their $2,000 to create an outstanding experience.

There are stories about hiring a carpenter to build a shoe tree for a guest; a laundry manager who couldn’t get the stain out of a dress after trying twice flying up from Puerto Rico to New York to return the dress personally; or when in Dubai a waiter overheard a gentleman musing with his wife, who was in a wheelchair, that it was a shame he couldn’t get her down to the beach. The waiter told maintenance, who passed word, and the next afternoon there was a wooden walkway down the beach to a tent that was set up for them to have dinner in. That’s not out of the ordinary, and the general manager didn’t know about it until it was built.

As chief executive, how do you manage your day and your staff?

The current economic climate requires me to spend more time on the road than in the corporate office. Thanks to technologies like the BlackBerry and cellphones, I have global reach wherever I am in the world. When I’m at home, I usually spend a few hours at my desk on weekends, preparing for the days ahead, returning e-mails. My assistant’s desk is always full when she comes in early on Monday morning.

To manage my staff, I value everyone’s opinion and listen to the pros and cons of every issue, but at the end of the day, the decision rests with me, and we move on to the next topic. As Harry Truman said, the buck stops here.

How do you keep up with trends?

We do a great deal of research that focuses on a broad study of luxury products and the market for high-end goods and services. Often you can see a trend coming before it becomes one by analyzing the data and studying the researchers’ conclusions and predictions. At Ritz-Carlton, we want to set trends, not follow them. On the other hand, we do not position ourselves as a trendy hotel company.

How do you measure success?

On the customer side, Gallup does phone interviews for us, asking two types of questions, functional and emotional. On the functional side, we ask: How was the meal? Was the food hot? Was the service good? Did you like the menu? How was your room service? Was your bedroom clean? And Gallup has established “indicators,” where this is one question that if answered as five out of five indicates that all the other questions will be answered positively. Our functional indicator is “The room was clean.” On the emotional side, our indicator is “I had a sense of well-being.” We know we must first pass the functional question before the guest will focus on the emotional question.

For employees, the most important internal metric we measure is voluntary turnover, which is an indicator of talent acquisition and training. We hire typically about 2% of the people who apply for jobs with us. Bringing on the right ladies and gentlemen and then nurturing them to provide them with career opportunities will reduce turnover. Training is really important, because it nurtures the careers of our ladies and gentlemen. Naturally, in a tough economic climate keeping staff satisfied is more challenging, but obviously it’s as important as ever.

Isn’t your growth as a hotel company limited by how many hotels you can build?

A breakthrough in our thinking was understanding that we are not a hotel brand but a lifestyle brand. For a hotel company, growth is reliant on the development of new properties, which is limited. But as a lifestyle brand, we can offer the unique Ritz-Carlton lifestyle in non-hotel formats as well. Whether you are spending a night, spending a week, buying five weeks of fractional ownership or buying a lifetime in the Ritz-Carlton, with Ritz-Carlton Residence, we feel that we represent lifestyle, that we have moved beyond being just a hotel company.

More than 3,000 people have bought in for several million dollars each, and to me those people are brand devotees for life. Of course, all strategies are sensitive to significant market turns, but from the long-term perspective of growing a customer base that is absolutely married to the brand, it has worked out extremely well.

What is the key to building a successful corporate culture?

A culture is built on trust. And if leadership doesn’t live the values that it requires of the organization, that is the swiftest way to undermine the culture. No culture sticks if it’s not lived at the highest levels of the organization. It takes an extraordinarily long time to build a culture.

Robert Reiss is host of “The CEO Show,” which is nationally syndicated in 52 markets by Business TalkRadio Network. This article was adapted from an interview that aired on “The CEO Show.” To hear podcasts of it and other CEO interviews, click here.

Confirmed Course Dates in St Andrews 2010

We’ve had a few changes to our course dates and venues since we published our course calendar back in September. The St Andrews Standard courses will now take place at the Best Western Scores Hotel. To book any of these courses, or for more details please visit our website, or contact us directly.

January 15th – Emergency First Aid at Work (9am-5pm, Rufflets Hotel) £84 (ex VAT)

January 22nd – St Andrews Standard (full-day, Scores Hotel) £70 (ex VAT)

February 9th – Scottish Certificate for the Responsible Sale of Alcohol (10am-1pm, Rufflets Hotel) £62.50 (ex VAT)

February 25th – St Andrews Standard (full-day, Scores Hotel) £70 (ex VAT)

March 4th – REHIS Elementary Food Hygiene Certificate (9am-5pm, Golf Practice Centre) £80 (ex VAT)

March 9th – St Andrews Standard (full-day, Scores Hotel) £70 (ex VAT)

Despite recession, China’s online travel market shows strong steady growth

HotelMarketing.com has published this summary of a PhoCus Wright report stating that China’s population is displaying a new interest in booking international travel, especially using the internet. Click here to read the summary on the HotelMarketing.com website, or scroll on down.

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Despite the global recession, the online travel marketplace in China is growing rapidly and PhoCusWright predicts online travel revenue will increase by 19% in 2009.

In its first-ever Emerging Online Travel Marketplace in China report, PhoCusWright reveals that China’s online travel space currently totals approximately US$6.9 billion, accounting for about 11% of the country’s entire travel market. Due to a variety of factors, the online channel is expected to continue on a strong growth trajectory, and by 2011 will account for about 20% of the total market.

PhoCusWright’s Emerging Online Travel Marketplace in China explores China’s dynamic (and frequently misunderstood) travel market. Based on an in-depth, six-month research study, the report sizes the Chinese travel market by major segment and identifies key trends and developments. It also reveals some of the unique behavior patterns of Chinese travelers, and unveils what makes China’s travel market unlike those in the West and other markets in Asia.

According to Ram Badrinathan, PhoCusWright’s general manager, Asia Pacific, “China is rapidly emerging as the largest travel opportunity in Asia, but that doesn’t make the entire market accessible to entrepreneurs. The key parts of the Chinese travel value chain are in varying stages of deregulation and government control. It is vital to understand the triggers that will allow for innovation and opportunity. What is really exciting is the vast potential represented by Chinese online consumers, as the country emerges as the largest broadband user market in the world. This will create a unique dynamic in the travel buying process.”

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If this interested you, you might also like this post, featuring TravConsult’s blog about how best to welcome Chinese tourists.

REHIS Food Hygiene Course in St Andrews – October 14!

The next course that the St Andrews Skills Academy is running in St Andrews is a REHIS Elementary Food Hygiene course. This full-day event will be running on October 14 at the Golf Practice Centre and covers all of the knowledge required by law for food service staff. The cost is £80 (ex VAT) and you can book places online by clicking here.  We’ll be closing the attendee list on October 1, so please book soon to avoid disappointment.

Trends: new luxury

OPEN forum are currently running a series on consumer trends, and today they featured ‘New Luxury’. Read on to find out more, or click here to view the article on the original website.

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Consumers are eschewing traditional status symbols in favor of authentic products and services – a story to tell means a story to sell.

Over the past century, rising disposable incomes have brought goods once considered “luxury” within reach of an increasing number of people. Now, a new breed of consumer is challenging the classic definition of luxury by seeking out a fresh form based on authenticity and exclusivity. A growing band of committed craftspeople – those who make beautiful, handcrafted products and those who offer tailored services requiring skill and time to achieve – are spearheading the new luxury movement.

Quality Not Quantity

New luxury can be characterized by one or more of the following: a single point of sale; the use of specially sourced materials to make the product; detailed consultation to ensure the customer’s exact specifications are matched; a curated shopping experience; a limited product range or supply of the product; and a trained, skilled workforce. Small businesses are ideally positioned to apply their working practices to providing quality rather than quantity, and will find that promoting great craftsmanship can pay dividends.

Business owners who already supply handcrafted goods should consider capitalizing on their existing operations by promoting their products’ provenance. The new luxury consumer appreciates the time and effort that goes into the manufacture of such products, so consideration should be shown to every aspect of production. The carefully constructed website displays its product range in between testimonials from satisfied customers. Carving hardwood toys from a wind-powered workshop, the one-man band behind the venture plants trees to compensate for the raw materials he uses (which are native to the area), and even writes to his child customers to explain the origin of their new toy. A green business before it became fashionable, the enterprise is naturally limited by the number of hours devoted to the craft.

The story behind the product is an attractive feature for the new luxury consumer. We Love Jam in San Francisco, California, produces limited quantities of its Blenheim apricot preserve each year. The owners discovered that the Blenheim apricot is an endangered variety and the orchard they use is one of the last remaining in the region. Each batch of jam is meticulously prepared using the finest ingredients and is only available for purchase via their website. Customers join a waiting list to alert them when the new batch becomes available every August. We Love Jam has redefined luxury by successfully navigating the fine line between elitism and quality, turning something as humble as jam into a luxury product for food lovers around the country by limiting the supply and keeping standards high.

From Supplier to Buyer

Business opportunities are also available to those who provide a curated or immersive retail environment for customers. In Portland, Oregon, Craig Olson and Sean Igo own Canoe, which stocks an eclectic mix of office and homewares that are united by a commitment to provenance, craftsmanship and quality design. Each product is accompanied by a mini-history, which makes the link from supplier to buyer and reinforces the Canoe brand values of timeless design and functionality. Olson comments: “In many ways it is a very Scandinavian or Japanese approach – the idea that products are to be used and enjoyed every day, not placed on a shelf only to fulfill some status role.” Canoe represents the growing breed of retailer mindful that, in an increasingly homogeneous world of Main Streets, discerning luxury consumers are becoming more demanding in their search for authenticity and are rejecting the mundane – whatever the cost.

The fragile economy has given rise to a segment of consumers who are reassessing mass consumption and traditional status symbols in favor of authenticity. Whatever the product, the central tenet is that new luxury goods should have a story to tell and offer an experience that goes beyond the price tag. Small businesses that take pride in combining quality materials, highly skilled craftsmen and a made-to-measure service are naturally in the best position to leverage this trend. Many of them are already proving that adopting new luxury practices is the perfect way to retain existing clientele – and to find fresh customers too.

For more articles and profiles on the trends shaping today’s business landscape, download OPEN Book: A Practical Guide to Essential Trends.

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What do you think? This article is geared more towards retail, but VisitScotland statistics also seem to be telling us that tourists are looking for stories and to add authentic experiences to their trips; how can you offer this ‘new luxury’ to your customers? Share your ideas here!

St Andrews Skills Academy – New Course Calendar!

In response to employer demand, we have compiled a calendar of popular short courses to run in St Andrews over the next six months.  The flyer detailing this is below; to request a hard copy please contact Beth. All of these are available to book on our website, or you can email/phone us directly for more information.

Can’t load the pdf? Here’s a list of courses we’re running:

October 14th – REHIS Elementary Food Hygiene Certificate (9am-5pm, Golf Practice Centre) £80 (ex VAT)

October 27th – Scottish Certificate for the Responsible Sale of Alcohol (10am-1pm, Rufflets Hotel) £62.50 (ex VAT)

November 4th – Scottish Certificate for the Responsible Sale of Alcohol (10am-1pm, Rufflets Hotel) £62.50 (ex VAT)

November 19th – REHIS Elementary Food Hygiene Certificate (9am-5pm, Golf Practice Centre) £80 (ex VAT)

December 3rd – Emergency First Aid at Work (9am-5pm, Rufflets Hotel) £84 (ex VAT)

January 14th – St Andrews Standard (full-day, Rufflets Hotel) £tbc

January 15th – Emergency First Aid at Work (9am-5pm, Rufflets Hotel) £84 (ex VAT)

February 9th – Scottish Certificate for the Responsible Sale of Alcohol (10am-1pm, Rufflets Hotel) £62.50 (ex VAT)

February 25th – St Andrews Standard (full-day, Rufflets Hotel) £tbc

March 4th – REHIS Elementary Food Hygiene Certificate (9am-5pm, Golf Practice Centre) £80 (ex VAT)

March 9th – St Andrews Standard (full-day, Rufflets Hotel) £tbc

Can’t find a course you’re looking for? Search our website, or contact the Skills Academy, and we will try to source some quality training for you.

What is ‘World Class Service’?

At various free workshops and seminars we’ve helped run this year in St Andrews, we asked you to come up with your definitions of ‘world class service’.  Here is a graphic representation (courtesy of http://www.wordle.net) of what you said.  The bigger the word, the more often it was used.

What do you think? Are you surprised about which words came up most often? Are there any that you would add? Tell us about them by commenting below and we’ll make a new Wordle of your comments.

Course Feedback

Have you, or one of your members of staff, been on a St Andrews Skills Academy course recently?  If so, you’ll have already been offered a few feedback mechanisms, but if there is anything else that you’d like us to know, please comment below.

Perhaps we did a good job, but we could have changed one thing to make it a fantastic experience for you? Let us know.

Or maybe the course has motivated you to attend other training? Tell us what you’re interested in here.

Maybe, the course you attended was so good, you want to tell other people about it? That’s great news! Leave comments here too.

Thanks again for your responses – they’re what help us succeed.

Scotland features on popular Russian television travel programme

Russian television star Dmitry Krylov has been travelling around Scotland shooting for a popular Russian travel programme, according to Scotland on Sunday.  The show (Neputevye Zametki, or ‘Travel Notes’) will be broadcast to around 20-25 million viewers from around Russia, and could prove to spark a renewed interest in Scottish holidays.

According to VisitScotland spokesman James Lakie, the feedback received from Dmitry and his crew was “fantastic. They were particularly impressed by the friendliness of the people and the warmth of the hospitality that they experienced throughout Scotland.”

VisitScotland has already launched its first Russian-language website and so is well-placed to capitalise on the publicity that this broadcast will bring to Scotland.  What can you do to encourage this expanding market to visit you?