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Increase Guest Value without Cutting Rates

Apr 28, 2013  By 

 We’ve long known that value for price is routinely a top driver for guest loyalty, but the question always gets asked – how can hotels raise value without lowering prices? We decided to look into it using our MMHI global database, and what we found is rather, well…illuminating.

Value for Price by Region

The first place hoteliers look to improve Value for Price is typically ‘room rate paid’. However, cutting price to boost value isn’t sustainable, and typically not very profitable. Brands are better served by using product and service offerings to impact Value for Price. Understanding how to adjust product and service offerings to satisfy and exceed guest expectation of value is critical to a successful strategy.

Every region, service level, and brand has its own profile. MMHI results show that Adequacy of Room Lighting and Internet Access were the top drivers of value across the globe. Meeting expectations of sufficient lighting and providing lights that actually work can sway value perceptions drastically.

Top 4 Global Drivers of Value by Region

Recently, Market Metrix performed a renovation analysis for a client who was updating some properties. Both Value for Price and Adequacy of Room Lighting satisfaction scores increased nearly 10% when compared to scores before the renovation.

Perhaps Tom Bodett and Motel 6 had it right by promising, “We’ll leave the light on for you”.

The second global Value for Price driver was Internet access. Improving Internet access scores can be a tricky business. Is the Internet on? Is it working? Is it working well? Is it free? All need to be answered.

Recently, InterContinental Hotel Group announced free Internet to all loyalty members worldwide! We can surmise how value will be perceived with this move. Will others follow?

When it comes to increasing guest value, cutting prices isn’t a long-term solution. However, analyzing product and service offerings to exceed guest expectations is. Using performance benchmarking data like the MMHI provides valuable insights into an aggregate view of the industry, and help hoteliers understand the key drivers of Value for Price that most affect satisfaction and loyalty.

Source: Market Metrix

About Market Metrix

Market Metrix

Market Metrix provides the only feedback management platform that maximizes every source of guest value: loyalty, referrals and reputation. 

 

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