A rat race for short-term profits

Written by Anders Johansson | 28 September 2023

Let's start with the purpose of a business. According to Peter Drucker, the purpose of business is to create a customer. You have to provide value for customers that they are willing to pay so much that you become successful and profitable. The profit is a test of the business' validity. The key to success is deeply understanding what the customer is willing to pay for. That requires research, data collection, understanding travel reasons, and customer needs, and communicating with the customer. Guest and customer focus does not pay off immediately. It takes time to attract the right audience, build trust and relationships, and produce happy guests who will recommend the hotel and write positive reviews. Let's dive deeper into becoming guest-centric.

Diving Deeper into Customer-Centric Hotel Management

Shifting the Paradigm: From Asset Management to Customer Management

The hospitality industry needs a philosophical shift to move away from the rat race for short-term profits. Instead of solely maximizing the return on every square foot, hotels should aim to maximize the satisfaction of every guest. This might sound idealistic, but happier guests generally lead to more recommendations, longer stays, and, often, increased spending.

The Real ROI: Measuring Customer Satisfaction

Return on Investment (ROI) isn't just about money. The most successful hotels understand that the true ROI is gauged by customer loyalty, word of mouth, and repeat visits. Platforms like TripAdvisor and Google Reviews have highlighted the importance of maintaining an excellent reputation among customers.

Implementing Guest-Centric Strategies

Personalized Experiences: With technology, hotels can tailor experiences for guests, from room preferences to customized activities based on their interests.
Engaging Loyalty Programs: Beyond accumulating points, loyalty programs can offer exclusive experiences, early check-ins, and other perks that enhance a guest's stay.
Feedback Mechanisms: Hotels should make it easy for guests to provide feedback during and after their stay. By actively seeking and acting upon feedback, hotels demonstrate a commitment to continuous improvement.

Investing in Training and Employee Welfare

A happy and well-trained staff is the backbone of a customer-centric hotel. Investing in employee training ensures guests have memorable experiences. Moreover, staff welfare directly affects their interactions with guests. Happy employees lead to happy customers.

Innovation: Keeping Pace with Changing Consumer Behavior

The expectations of hotel guests are constantly evolving. Whether the rise in eco-tourism, the demand for localized experiences, or the growth of health and wellness tourism, hotels must innovate and adapt to cater to these changing demands.

Building Long-Term Relationships

Instead of hotels looking at guests as short-term revenue sources, they should see them as long-term partners. By building strong relationships, hotels can tap into a network of loyal customers who revisit and act as ambassadors for the brand.

Conclusion

The shift from asset management to customer management in hotels isn't just a moral choice but a strategic one. While the immediate gains might not be visible, the long-term benefits of a satisfied, loyal customer base are undeniable. As Peter Drucker rightly said, the key is deeply understanding the customer. Hotels that pivot in this direction are bound to see lasting success.

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