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.

—-

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.

The Guest is always right; why it sometimes pays NOT to respond to guest reviews

HotelMarketing’s Daniel Craig (the blogger, not the filmstar) wrote this useful article about how best to respond to negative customer feedback online. Daniel suggests using a conversational, but professional tone and carefully proof-reading any comments to ensure that they are written in good English. Read on for the full article, or click here to view it on the HotelMarketing site.

—-

Negative or positive, private or public, hotels should be grateful whenever a guest takes the time to provide feedback. It’s time we took a more active role in the dialogue. The potential for generating awareness and driving business is far too great to ignore.

A few years ago at Opus Hotel Vancouver we relocated a couple who had driven up from Washington state to celebrate the husband’s fiftieth birthday. It was a nasty thing to do, but it happens in the hotel business, more frequently than most travelers think. Like the airlines, hotels overbook when demand is high, banking on a few no-shows, and occasionally we get caught with our pants down. Unlike the airlines, however, we don’t broadcast an oversold situation to a holding lounge full of travelers. We handle relocate situations discreetly, one-on-one with travelers, and typically no one is the wiser.

Or so that used to be the case. Social media networking has brought issues that used to be handled quietly between hotel and guest out into the open for the scrutiny of all. In this case, the couple retaliated by posting a bitter review on TripAdvisor and two other travel review sites. Their account of the incident was mostly accurate, something we hoteliers appreciate, although they declined to mention our many efforts to make amends. We would have preferred they hadn’t taken their grievance public, but we screwed up, so fair game.

Hotels have always worked hard to keep guests happy, in part because we depend on repeat business to fill our rooms, but also because it’s hammered into our brains early on that one unhappy guest will tell at least five others. Today, that number has compounded into hundreds and even thousands. With a few clicks of a mouse, an irate guest can broadcast his beef to entire online communities via Facebook, Twitter, TripAdvisor, Expedia, Yelp, or any other of the burgeoning group of social networking forums. Word of mouth has been usurped by word of mouse, a vastly more efficient—and potentially damaging—means of spreading the word.

As a traveler, I’m deeply grateful to the many people who find time to post reviews with no apparent motive other than to share their experience. We human beings love to have our opinions heard, and what better platform than social networking? Sure, some reviewers have an axe to grind, but according to TripAdvisor, the world’s largest online travel community, over 80% of its user reviews are positive. It follows, then, that if a hotel is well-run, its positive reviews will far outweigh its negative reviews.

Yet I often hear hotel managers complain that traveler review sites are the bane of their existence. Why? Part of the problem is that the voice of one hostile reviewer can drown out the voices of a dozen ecstatic reviewers. Hotel managers are perfectionists, and it’s hard to admit we’re infallible, especially when our shortfalls are broadcast to the world in perpetuity. Whereas a great review can engender the pride among staff the hospitality business thrives on, a bad review can be embarrassing, distressing, and simply bad for business.

Moreover, social networking is supposed to be all about two-way dialogue, but when it comes to online review sites the dialogue is taking place among consumers, not between consumers and businesses. Sure, some sites like TripAdvisor allow hotels to respond to reviews, but most hotels choose to remain silent, knowing that we can never be as frank as the reviewer, and that no matter what we say, we risk making things worse. If a reviewer accuses us of discrimination for refusing to check him in, we can’t post a response explaining that he arrived at 3:00 AM with no reservation, a wad of cash and three teenaged “nieces”.

Hotels have always taken the high road when dealing with guest complaints. “The guest is always right” is a cornerstone of hospitality, and social media hasn’t changed that. In the case of a false or exaggerated review, hotels are sometimes better off not to dignify the comments with a response. Travelers are smart enough to read between the lines, and there’s a good chance the hotel’s fans will spring to its defense.

This doesn’t mean that all negative reviews should be left uncontested. Social media provides unprecedented opportunities for hotels to engage travelers and is only gaining in influence. Sticking our heads in the sand has never been a prudent survival strategy. However, there’s a big difference between sites like Facebook and Twitter, where consumers opt in to receive communications, and traveler review sites, where consumers are seeking traveler testimonials, not hotel propaganda. If a hotel weighs in on the conversation, it better have some value to add.

When hotel managers do respond to negative reviews, they often come across as defensive or pompous, occasionally borderline illiterate, as if they banged out the response between check-ins. Considering that these websites receive far more traffic than hotel websites could ever hope for, hotels should be dedicating an appropriate amount of resources.

The key is to strike the right tone. The response should be conversational and professional, brief and factual, written in a voice that reflects the brand and by a manager with a solid command of the written word. The hotel should thank the reviewer for the comments, but should resist the temptation to kick into defense or promo mode with comments like, “We at Hotel X are proud of our sterling reputation for …” Corporate mumbo jumbo is simply not welcome in any social networking forum.

If the complaint is legitimate, the hotel should apologize and briefly explain the steps it has taken to ensure the issue does not reoccur or the reason why it cannot be changed, keeping in mind that the audience is not just the complainant but an entire online community. If there’s an inaccuracy, the hotel should set the record straight, albeit diplomatically. In some cases it may be more appropriate to contact the complainant directly rather than battle it out in a public forum.

When it comes to positive reviews, readers are not interested in gloating “thank you ever so much for recognizing our brilliance” responses from hotels. This is not to say that positive reviews should be left unacknowledged. Any guest who takes the time to post favourable comments is a brand advocate and should be treated with proper reverence. A private message of gratitude and a note on the guest profile to upgrade and send a welcome amenity on the next stay is entirely appropriate.

A link to TripAdvisor reviews can be posted on hotel websites, but after working so hard to attract visitors, why would a hotel encourage them to jump ship—to a website cluttered with ads for competitors and online travel agencies? Chances are, visitors won’t be back. As an alternative, TripAdvisor reviews can be posted directly on a hotel’s website. This may slow the exodus, but why would a hotel post raw, un-moderated, occasionally inaccurate third-party content on its own website? This is the one remaining place on the web where hotels have exercise full control over content. The hotel should be the voice of authority here, not a one-time Priceline guest who decides she hates everything because she was charged for internet access.

The obvious way for hotels to avoid negative reviews is to ensure that no guests leave unsatisfied. That’s easier said than done; even the best hotels get nailed from time to time. At Opus Hotels we work with Market Metrix, which emails comment forms to guests after departure, helping us to identify and resolve issues before they’re taken public. This is not to say that all negative reviews are bad. No one expects a hotel to be perfect. Online shoppers are a skeptical bunch, and if a hotel’s reviews are all glowing, it will raise eyebrows. Moreover, constructive feedback helps set traveler expectations.

Negative or positive, private or public, hotels should be grateful whenever a guest takes the time to provide feedback. It’s time we took a more active role in the dialogue. The potential for generating awareness and driving business is far too great to ignore.

As for that relocated couple from Washington, our invitation to come back to Opus Vancouver with our compliments is still open. Rest assured, we’ll do everything in our power to ensure a glowing review results.

Daniel Edward Craig is a hotel consultant and the author of the hotel-based Five-Star Mystery series. He is the former vice president and general manager of Opus Hotels in Vancouver and Montreal and the company’s current blogger-at-large. For more information visit http://www.danieledwardcraig.com or email // ‘;l[1]=’a’;l[2]=’/’;l[3]=”;l[21]=’\”‘;l[22]=’ 116′;l[23]=’ 101′;l[24]=’ 110′;l[25]=’ 46′;l[26]=’ 115′;l[27]=’ 117′;l[28]=’ 108′;l[29]=’ 101′;l[30]=’ 116′;l[31]=’ 64′;l[32]=’ 103′;l[33]=’ 105′;l[34]=’ 97′;l[35]=’ 114′;l[36]=’ 99′;l[37]=’ 100′;l[38]=’:’;l[39]=’o’;l[40]=’t’;l[41]=’l’;l[42]=’i’;l[43]=’a’;l[44]=’m’;l[45]=’\”‘;l[46]=’=’;l[47]=’f’;l[48]=’e’;l[49]=’r’;l[50]=’h’;l[51]=’a ‘;l[52]=’= 0; i=i-1){
if (l[i].substring(0, 1) == ‘ ‘) document.write(“&#”+unescape(l[i].substring(1))+”;”);
else document.write(unescape(l[i]));
}
// ]]>dcraig@telus.net.

—-

What do you think? Should you respond to all hotel reviews? Should you embed TripAdvisor ratings on your website? Share your opinions here!