I SAY, I SAY BY PETER GRAY
SERVICE WITH – OR WITHOUT – A SMILE
Australian businesses seem to have decided that if they’re going to cut back on anything during the present economic situation it’s service! Banks used to have the monopoly on a laissez-faire attitude to customers – and many still do as they impose or hike charges for just about anything and everything that was once considered ‘part of the service’.
Hotels, too, are obviously feeling the pinch as the services they once provided as a matter of course are now the exception rather than the rule. Back in 1992 (the recession we had to have) 5-star hotels were offering rooms at ridiculously low rates just to get bums in beds – that’s what their owners decreed. But the services that a guest could normally expect from a 5-star property were sadly lacking: turn-down, butler service (now that’s a term you don’t hear these days), free pressing of one item on arrival and so on.
It’s getting a bit like that today as hotels are again claiming that they’re forced to cut rates to attract customers. I read yesterday that the Hilton Hotel in Sydney was charging only $30 a room more than the local YHA (and from my experience the room at the Hilton was probably smaller). According to the same source some five-star hotels in Sydney are apparently charging less than four-star properties.
By comparison, our neighbours in Asia and the Pacific are increasing the services they offer guests rather than cutting hotel rates. Certainly there are some good deals to be done for those of us who manage groups but these almost certainly contain increased benefits rather than drastic cuts in prices. Hotels in Asia are learning the meaning of loyalty too. Book a conference in one year and you’ll get the same rates again the following year if you use the same venue. It’s being tried here too – the Hyatt Regency Sanctuary Cove, which my company recently used for a conference, is offering the same deal for their established customers.
Some Starwood Hotels in Hawaii are also offering to guarantee the exchange rate. If the Aussie dollar plunges against the US dollar they will make good the difference. If it goes the other way they’ll honour the rate in Australian dollars. With the two currencies converging and diverging, as they have been recently, this is a good deal. And it doesn’t affect the excellent services the hotels offer their guests or groups.
Conferences – particularly association conferences – often need the lure of cheaper accommodation rates to attract delegates. Association event attendees also tend to spend less time in their rooms, their attention taken up by social and networking functions and exhibitions as well as the conference itself. Corporate meetings, on the other hand, whilst still being budget conscious tend to use hotels based on other factors – some as diverse as whether the CEO has stayed there before and enjoyed the experience.
Incentive rewards, however, are not so easily satisfied. Accommodation for a high achiever group is usually determined anything up to eighteen months out from the date of travel (assuming a year-long incentive program) and so, unless it’s a closed program, the precise number and nature of rooms cannot be precisely determined. Previous year’s figures will help, of course. But experienced hotel sales staff will know all about materialisation and will know that the final numbers can’t be confirmed until almost the end of the program, which could be a year or more away. The benefits they propose to attract your business have to be valid when the group travels and so they are likely to be less than the desperate measures that some hoteliers are offering now. But business that comes in the form a substantial group doesn’t eventuate every day, so additional benefits should still be substantial.
The simply message is that we should be looking at value not price. A low price may represent very poor value if all you get is a room. Take the example of low-cost airlines where the name says it all. They’re low cost. You’re simply transported from one place to another. Luggage, food and beverages, special seating, airport lounges all cost extra. But at the end of it if you’re getting greater value - say, by being where you want to be when you want to be there which another airline can’t provide - then you’re getting great value. Value, after all, is what something is worth; it’s importance to you and only you can determine that.
Providing extra services at no extra cost is adding value providing those services are those that people appreciate. Providing something at a low price but stripping it of everything one should, by virtue of its status in the market, have a right to expect is the very antithesis of value. Hotels – and banks – please note.
Peter Gray is the Managing Partner of Motivating People www.motivatingpeople.net
For Speaking availability, Quotes and information email peter.gray@motivatingpeople.netcopyright Peter J Gray Motivating People 2009
