Independents Gain Seats in Mobil Ratings Race

This may be less important than last week's mid-term elections...maybe not. Mobil recently released its star ratings for 2007. Like last year, I've added some analysis which is summarized in the table below. Notably,

  • Independents  have widened their margin over the chains in the combined category...now 10 (up from 7 last year)
  • Independents now have 13 more 4 star properties than the chains (up from 9 ast year)
  • St. Regis has added three 5 star properties (moved from 4 star last year)
  • Among chains, Ritz Carlton continues to dominate the combined category with 29 properties (40%)
  • Four Seasons has the edge in the 5 star rating with 8 properties, but slipped in percentage from 47% in 2006 to 40% in 2007

(Click on the image to make it look better)

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Sometimes, people actually ask me how independents can be successful? Of course they can.  But, don't take my word for it...call one of the 82 hotels on the list.

Link to the Mobil lists

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Raw Talent

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I recently read this quote in a WSJ article..."A good employee or a good sales associate might be worth five or 10 times an average one.". It's a very good article about the value of service...definitely worth the read. But, it's this quote that really garnered my attention. I think a great employee is worth far more than five or ten times that of an average associate...probably a hundred times more, maybe higher. Here's just part of my basis...based on my short twenty-two years in the biz:

Great Employees

  • don't need to be managed
  • don't break important rules...and break the less important ones for the right reasons
  • think and create
  • are accountable and responsible
  • have passion
  • don't need to be motivated by you...they're self-propelled
  • make you look good
  • are trustworthy
  • have fun
  • think first about the team, then of themselves
  • seem to get it that the customer and their co-workers are more important than they are
  • leave when they know the time is right...for a better experience
  • they smile a lot...and get others to do the same

They play to win

Average Employees

  • spend an inordinately long time in training
  • work for pay, not for the experience or the ride on the bus
  • break rules for selfish reasons
  • hang-on to the job because it's owed to them
  • blame everyone else for things that go wrong, especially the customer
  • need constant motivation and incentive to do a good job
  • are afraid to fail
  • do just enough to get by
  • take risks to benfit only themselves
  • are late a lot
  • often seem troubled about things
  • they frown alot...and get others to do the same

They play not to lose

You've noticed that my list is based on personality, traits and character...not on job skills. My list is based on raw talent...what a person comes equipped with before you get your hands on them. Raw talent  is based on how people see themselves and what they want to accomplish in life...it's the seed for passion and remarkability. And, unfortunately, it can be the foundation for average. Your job is to sniff out what's underneath...before they get on board.

Average people need jobs. Extraordinary people want them.

Mine is just a partial list. I would love to see yours. I'll be spending more time on this subject in an upcoming podcast...and will be happy to highlight your add-ons.

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Traffic and Coat Tails

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Traffic
Just how important is traffic? In some cases, it's real important. I heard it was extremely important to John Q Hammonds...for years (maybe he still does) he developed hotels by following interstate highways and building where traffic peaked...or was about to. A pretty good strategy judging by his portfolio.

In the end, the importance of existing traffic depends on the type of experience you create and whether you're trying to reach the masses, or a niche. An average product relies more on chance to be successful. Hence adding a flag affiliation to improve your odds...but, that's a subject for another post. So, the more traffic that comes by your front door, the greater the chance someone stops in to buy. Most fruit stands survive on this premise. Now, choose a location with lots of traffic and a place that people actually want to be...then you dramatically increase your odds. I think that's what JQH does so well. And, that's what most of the chains work so hard to do...find cheap land in a location with lots and lots of traffic...bingo, they collect 5%-10% of every room sold.

There are generally two paths to development. You create the reason people come...and your own stream of traffic. Or, you ride the coat tails of another...whether it's an interstate, Mt. Rushmore or a beach. The more "reasons" you create for yourself, the more insulated you are from someone else's peaks and valleys. Biltmore Estate is the primary reason people visit Asheville, North Carolina. And, as long as they remain interesting, they'll generate visitation...and the town benefits. On the other hand, you probably don't need to look very far to see examples of the opposite end of the coat tails spectrum. Most roadside hotels and convention center properties fit into this category...relying on the destination someone else has created and their location to be exposed to the most traffic. Of course, there are hybrids...unique and interesting properties that also rely on some outside factors. Some of the JQH propeties are. In fact, you could argue that a remarkable hybrid is the best of all scenarios...a good strategy, but it does require some luck.

So, on the surface, it seems easier to go the coat tails route. It's cheaper, quicker and requires far less imagination to get started. But, in the end, your destiny relies heavily on another...that's risky.

Consider some additional thoughts...

  • Making something average is easier and cheaper than building something extraordinary, interesting and different...that's why there's so much of it.
  • Making something just good enough and getting a lot of traffic feels safe.
  • People pay less...far less, for average stuff.
  • It's likely, very likely, you can't make yours the cheapest...someone else is already doing it. And, it's extremely difficult to be better...and cheaper.       
  • Making something different is hard.
  • Being the best at something is really hard.
  • More and more people want remarkably different things.
  • People pay more for what they want...a lot more.

So, I ask myself everyday....what category do I want to be in? And, what am I doing to get there?

The Power of People We Know

For a while now, I've been receiving about one e-mail per week from Marriott. My guess is that I forgot to uncheck the "opt-out" box when using their on-line booking system a couple of months ago. I don't read the e-mails, just dump them like most other people do. I don't even take the time to unsubscribe because it's just easier to hit delete.

I tend to pay attention to e-mails I receive from people I know, especially my friends.  Why can't companies, especially those with a lot of smart people like Marriott, figure this out?

Consider this...people make friends with people, not with companies. And the bigger the company, the worse it gets. And, if you buy into the idea that your goal as a hotelier is to turn strangers into friends, and then those friends into customers (build relationships), I recommend you let people do that...not the company. Seems logical and obvious. But, judging by my in-box, it's not.

Granted, I wouldn't be any more inclined to read or answer an e-mail from the front desk agent who I spent only two minutes with. But, what if I had received a message, e-mail or phone call, from the general manager who greeted me in the lobby?  Or, from the housekeeping manager who helped me with a TV problem? In fact, anyone who made enough of an impression so I could remember them has a good chance of getting through. No, they're not my friends. But, I probably trust them just enough to let them get to the next step.

And, with regard to promoting specials, packages, etc., why not let a "person" use a blog, podcast or send out personal notes to help spread the word? Again, I'm more likely to listen if it's someone I know.

Of course, the problem with this personalized approach is that most companies don't want to do it....or, more likely, are too afraid to do it. They worry about controlling the message so that it's consistent. They worry about what a junior manager or line staff member might say or do that could somehow backfire. So, they play it safe and trick people into getting corporate e-mails, hoping 1%-2% will read and act. And, they will...for a little while.

Friends are far more effective in spreading the word than any other method. So, rather than wasting time and money shouting at people who aren't paying attention, why not figure out ways to leverage the relationships which have already begun, and make some new friends?

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Hospitality.Sweet.

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Thanks to Patti Shock, I just read a great Fast Company article highlighting Danny Meyer's approach to running successful restaurants (He can do that. He has 4 of the top 20 in NY according to Zagat). Oddly enough, he doesn't focus so much on the food. Here are some key takeaways...

Surround yourself with people whose emotional quotient is as high as, or higher than, their IQ.

For us, it's vitally important because we're in the business of delivering an experience that's supposed to make you feel good, not in the business of crunching numbers.

Service is how well something is done technically; hospitality is how good something feels emotionally. I think we're at the dawn of the hospitality economy, and the companies that prevail are the ones that realize it's the quality of the emotional experience that sets them apart.

To learn to embrace mistakes and find a way to distinguish yourself based on how you handle them is a huge opportunity.

Good rules to serve by.

The point I keep trying to drive home with clients, friends and anyone else that will listen....how does your product and service make people feel? Do you greet people at the door, or make them stand in line? If they do end up in a line, do you do anything to make them feel better about it?

Advertising ROI

This article, Preferred Hotel Group’s 5:1 ROI Guarantee Yields 100% Success Ratio for 2006 Co-op Marketing Programs, illustrates the illusion I continue to see put forth about the effectiveness of traditional advertising programs. Essentially, Preferred is guaranteeing a 5:1 return on your advertising investment. But, are they? The example in the article refers to revenue dollars as the "return". Conversely, most ROI measurements are based on profit or net income, not top line revenue. And, that's how I suggest we look at advertising, or any marketing investment for that matter. So, the 5:1 probably returns a break-even scenario if you consider a 20% profitablity margin. That's not necessarily bad....but not as healthy as it may seem on the surface.

I've seen the effectiveness of many ad campaigns measured solely via revenue, incremental roomnights generated, etc.  Unfortunately, that's a bit short-sighted. While more business is the obvious goal, don't lose sight of the real objective...to put more money in the bank? 

 

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Pods Instead of Front Desks

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Insideembsuites

According to this recent article in USA Today, it looks like some hotel chains are replacing the standard front desk with something more service friendly...pods. While it's definitely a step in the right direction, I think there's still room to remove them altogether, especially with the technology now available. I admit, that's a bit challenging in larger properties. But, in the end, it's what people want...to shake your hand, look you in the eye and be welcomed.

Bravo to those companies referenced in the article who are embracing this trend.

Crayon...A New Marketing Company

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Joseph Jaffe launched Crayon yesterday...in Second Life. While I wasn't able to attend due to my traveling schedule, I see it was pretty neat...

Fearless_leader

Here's the header from the press release....

World's First New Marketing Company, crayon, Launches Simultaneously in Real and Virtual Worlds crayon talks, walks and lives New Marketing (for a New Consumer) with clients including The Coca-Cola Company and GSD&M

Here are some more links:

Crayon website
crayonville blog
Joseph's launch video

Most of you know, I've followed Joseph via his blog, Jaffe Juice, and podcast, Across The Sound for quite some time. Needless to say...I like the way he thinks. I look forward to a heavy dose of "new marketing" from Joseph and his colleagues. Good Luck!

Marketing Trends

Picked this up from Jaffe Juice...Drew Neisser, CEO of Renegade Marketing wrote this piece in The Wise Marketer. In it he outlines the following trends:    

1. Corporate honesty at all costs    
2. Transparent customer satisfaction       
3. Net Promoter Scores    
4. Blog monitors       
5. Niche market mining    
6. Eco-everything    
7. More user-generated content    
8. No more lines    
9. Daring to be digital  
10. Innovation triumphs

A good list...especially for those seeking to be different.

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Technology and Conversations

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I recently ran across these conversation starters while skimming ehotelier forums:

"Dear Hospitality Professionals, Can anybody provide me with information what it is like to work for the Concorde El Salaam hotel in Cairo, Egypt?"

"Currently Negotiating salary for a GM role in Asia. Can you please advise what the salaries are like or I should expect for a 61 room 5 star resort/hotel with 2 F&B outlets?"

This got me thinking about how technology has changed the way conversations occur, and more importantly, how fast information is exchanged. Consider the amount of time it takes for a stranger (prospective guest, employee, vendor, etc.) to know almost everything about your company. Consider who these people are talking to, who they're listening to and how they're doing it. Whether the information they gather is true, half true, or completely false doesn't matter. What matters is that now more than ever, they're basing their decision to buy, donate or sell based on outsider information...the stuff you don't initiate. You might call this process a reality check...information they gather from others is stacked up against what you say. If it jives, you're okay. If not, well...you might not get the call.

Here's the point...You no longer have control of the information or the conversations about you. Your website, advertising and PR plan are quickly becoming a sideshow as people find new ways of learning the truth. Customer evangelism is no longer limited to backyard BBQ's and to the office watercooler. Rants and raves are now being amplified to all corners of the planet...and at lightening speed. As a result, you only have two choices...do nothing and hope things go in your favor...or, become an active participant, learn and educate.

So, are you part of the "new" conversation? Have you conducted a Google search on your firm or hotel to see who's linking to you? Better yet, do you have one automatically delivered to your in-box each morning? Do you regularly monitor sites like epinions and trip advisor? Do you watch the blogosphere via Technorati? Does your website have an RSS feed? If some of this sounds like a a foreign language, I understand. Most people don't read blogs, let alone write one. And, most people don't check multiple on-line forums before deciding to talk with you. But...some people do. And, those people talk to other people. And, as each day passes, the minority gets closer to being the majority. You get the picture. I'm not suggesting you become a computer hack. I'm challenging you to embrace the fact that conversations happen...with or without you, and now, in places you may never have imagined. Your task is to somehow get tuned-in, jump-in when it's appropriate, or better yet, start a new discussion altogether.

The bad news is that technology has made the conversation game much more complicated. The good news is that technology has leveled the playing field, giving everyone an equal opportunity to spread the word about their product, and engage their audience...it's cheaper and easier than ever. Now, you just need to acknowledge the power, and make use of the tools available.

No Keys Required

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Here's a story from Contactless News about a new system which eliminates room keys and the need to stop by the front desk for check-in. Room keys are replaced by an access code transmitted to your cell phone which is then used at the guest room door to gain entry. Apparently, a few hotels in Europe are trying it out with some success.

I think the benefits are obvious, especially for business travelers. The majority of the road warrior class has always wanted maximum efficiency with minimum contact...to be more productive. Bypassing the check-in line has been goal number one for years with the development of check-in kiosks, express check-in envelopes, etc. But, until now, bypassing the registration step has never really been achieved...you still had to stop somewhere before going to your room.

Obviously, there are a variety of issues to contend with including security, data theft, room changes, etc. But, one of the biggest considerations is to be careful not to push this system onto people who don't want it. Luxury, most leisure and even some business travelers don't necessarily want to cut-out the personal welcome. They just want to eliminate the process...standing in a line to talk to the top of a clerk's head.  The challenge is to somehow find a means which accomplishes a personalized arrival without all of the "processes". Try eliminating the front desk as a first step. I know that sounds a bit radical, but so did issuing keys through cell phones not that long ago. I believe the vast majority of people don't want to wait in line, go to a counter or watch people enter information into a computer...no matter if it's business or pleasure. The cell phone idea is a big step in the right direction. But, it still leaves us with a problem...handling all the arriving guests who enjoy talking with someone, shaking hands and being greeted with a smile.

Room Service Tray Myth

From Rayna Katz over at Meetings Industry Soap Box...one of her two peeves about luxury hotels and how a new hotel in North Carolina plans to solve it.

Peeve #1: guest corridors serving as the eternal resting place of used room-service trays. Nothing welcomes a meeting attendee back to the guest room at the end of a long day quite like discarded food and dirty plates in the hall. The solution: A micro chip in the trays that will alert the private dining department when the tray has been put in the hall and is ready for of the exact time and location of a tray’s migration from holder of a meal being eaten to unsightly remnant in need of collection. Genius, right?

Well, not so fast on the genius part. Might I suggest that the problem with those nasty room service trays is not so much knowing that they're there as it is making it a priority to go pick them up. This tech solution proposes that someone will go up each time the tray is pushed out the door...not practical, especially when you're busy.  Or, maybe they'll go fetch them when there's critical mass (not much better than the current situation). The root cause of the problem is motivating the staff (not just room service, but all staff) to care...care about unsightly and sometimes hazardous junk in the corridor. Get people to make this a priority...and I think you can live without the micro chip...although, I must admit, it's a cool idea.

People Like Process

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People are intrigued by process...really attracted to it. "Behind the scenes" has tremendous value in getting people to spread the word about you.

Found this neat experiment (courtesy of Jaffe Juice) going on through Sunday. I can envision a similar application in the development of a hotel, a renovation, a special event or even an ongoing operation. Not necessarily sitting behind a glass window for 72 hours...but, giving people a behind the scenes look at what makes you tick.

Use technology to amplify your message, and to make it more interesting.

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Transparency Via Blogs

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I just read an interesting article in the October issue of Inc. which  describes how some companies are using blogs to  allow employees to "out" themselves when they make a mistake.  Employees are guaranteed "protection" if they offer-up the errors of their ways. The point being that more good comes from learning about errors and correcting them, than never knowing or finding out after it's too late.

This got me thinking about the real power of blogs, especially as it relates to hotels engaging with their guests. What if you set-up a blog as your customer feedback mechanism, giving guests the opportunity to post both good and bad for all the world to see. I bet you can think of a bunch of reasons not to do this...like the potential for lost business because someone finds out room service is too slow. But, consider the flip-side. In today's world of corporate deceit and trickery with the likes of Enron, Worldcom, Tyco, to name just a few, it might be more important to show a few warts and gain someone's trust than to worry about whether they find out what they know already anyway...that you're not perfect. Plus, all the positive comments will have that much more credibility.

And, here's a bonus...it forces you to deal with customer problems...first.

Transparency leads to trust...which leads to long lasting relationships. So, why wouldn't you do it? Two reasons, the same reasons I might not...fear and chance. Fear of people knowing my issues and judging me only by those issues. And, the chance they may never find about my problems, so why tell. Of course, neither is likely to happen. Most people are willing to overlook problems to get to the good parts (to a certain point). And, murphy's law almost always prevails...just ask Dell (remember Dell Hell?).

The idea still seems risky doesn't it. That's because it is. You're not likely to achieve extraordinary status by playing it safe. So, go ahead, take a chance...be different.

I'd like to know if any hotel has tried this yet...please chime in.