This is a question often posed on stage at general meetings and in media interviews with hoteliers. Designed to help companies operating at the highest levels of their industry gain insight into how they can leverage personalized experiences to increase revenue.
Focusing on the essence of service emphasizes the distinction between luxury goods (high quality/high price) and luxury services (personalized/proactive). Hotel owners are typically willing to invest in luxury amenities and fixtures to increase property value, but attracting the next generation of luxury travelers requires even more investment. Amex found that 79% of Millennials and Gen Z value unique and one-of-a-kind travel experiences. This is the type of experience that can only be provided by a facility that truly understands the value of great service provided by a great team.
Are your services worth the price?
This resurgence of the experience economy is being felt across the industry, with global events such as Taylor Swift’s tour helping to support ADR growth as occupancy begins to level off. While this has helped support RevPar globally, STR reports that corporate confidence is trending downward. Because of this, many hoteliers question the value that guests get from a hotel stay due to inflationary pressures, and in many cases, the luxury “goods” part of a stay is not a true added value when compared. Because of this, they are concerned that the charges are not sustainable. For luxurious service. Like other luxury sectors, from fashion houses to jewelers, smart hoteliers are aware of this. They are beginning to understand the value of seamlessly combining digital and in-person service delivery.
This shift in thinking is already gaining momentum. While Bloomberg recently suggested that true luxury starts at £1,000 a night, Chris Fradin, vice president of Europe at Forbes magazine, pointed to a completely different shift away from property being the definition of luxury. Many standard bearers of luxury hospitality, including Forbes, are calling for a complete redefinition of the meaning of luxury, emphasizing authenticity, one-on-one relationships, and personalization at scale.
This assessment from one of the world’s leading validators of luxury services is extremely important, as consumers are already becoming desensitized to the luxury of luxury goods. Marble columns and beautiful reception lobbies are now key elements, and what separates the world’s truly great hotels from the rest is the quality of the experience and the relationship guests create that makes them want to come back. It depends on whether or not it can be constructed.
Technology that improves your experience
Traditional ROI metrics fail to account for the space that luxury hotels will occupy within the 2024 experience economy. This is independent of the potential increase in ancillary spending facilitated by technology. Providing an exceptional experience for everyone who enters a hotel is the raison d’être of luxury hoteliers. Whether you’re popping in for a coffee or spending more than £1,000 a night on a room, the world’s best hotels offer an incredibly personal level of service, regardless of the potential financial gain. . These hospitality gurus understand the strength of their reputation and the power of true proactive service to drive repeat business.
As the general manager of a luxury boutique hotel in Knightsbridge, London, I was acutely aware of this. Although the property and ‘luxury goods’ were finished to a very high standard, we lacked many of the amenities offered by our competitors. To overcome this shortcoming, my guest relations team and I needed to ensure that everyone who walked through the door was treated as if they were coming home. This way, as soon as people feel welcomed and understood, they will immediately open up to us and my team will be able to respond to their needs. , you will be able to start building a detailed profile of what kind of person they are. I ensured that my team had the right technology to store this information profile and the right tools to engage with guests according to their wishes, so we could customize the guest experience for them. The ability to do so has been greatly improved. This practice alone opened up far more high-converting upsell opportunities than any single pre-arrival direct-to-consumer marketing could accomplish.
While technology can be used to increase opportunities for personalization and give guests more choice about how much of their service experience is done digitally or in-person, in some cases availability and immediacy Sometimes the sex alone can be surprising. A few years ago, the hotel I owned received a WhatsApp message from the brother of a man who had stayed with his family the previous week. The brother who messaged us was staying at a nearby competitor and was very disillusioned with the experience. When he messaged us, he shared that he wanted to stay with us because we care so much about his brother’s family. Within 10 minutes we agreed on a suite for him and had the room ready just as he arrived from other properties, all within 30 minutes. Since this was London, there was no shortage of booking options. Still, our reputation for hospitality and significantly shortened booking cycles allowed us to act quickly to secure new loyal guests. Technology has made this booking easier, but it was our team’s service delivery that brought our guests to us and kept them with us.
Redefining success
The challenge for modern hoteliers is to effectively balance digital and in-person luxury experiences. Solutions often depend not on the technology itself, but on how performance is measured when using the technology.
As supply continues to expand dramatically, traditional financial metrics have long been seen as the determining factor for a hotel’s success, but as EHL Insights points out, traveler demand is driven by more than just products. We are returning to the experience. This is where the difference between luxury service and other services becomes clear.
While recognizing the importance of traditional performance metrics, luxury brands are increasingly using metrics like Net Promoter Score (NPS) and customer lifetime in conjunction with internal metrics that focus on staff wellbeing and their ability to build relationships with guests. We focus on other metrics such as value (CLV). Hoteliers can increase owner revenue by focusing on superior guest satisfaction as a competitive advantage in an oversaturated market.
Evolving your digital experience
Just as every hotel is unique, so too is every digital experience. There is no one-size-fits-all technology solution, not every hotel needs an AI chatbot, and not every property needs a digital key. It’s important to focus on what will truly benefit you, your team, and your guests. The points below provide a starting point to help you develop your own luxury digital experience.
Thorough digital and in-person journey mapping practices are essential to ensuring an exceptional digital experience. Understand which touch points overlap and ensure your digital experience matches your in-person experience. As preferences change, guests want options to interact with hotels in a way that works for them, whether in-person or digitally, and you need to deliver that experience. Online tools like Smartsheets, Monday.com, and LucidChart include templates to help you plan. Many of these apps have free or trial versions long enough to give you what you need. Focus on guest and staff interaction features. Instead of looking at every digital interaction as an upsell or cost-cutting opportunity, think about how you can leverage technology to improve the experience (NPS is a useful metric to track this). Part of the magic of luxury service is that everything happens at the right time and seamlessly. Ask yourself if your technology solution is helping your guests get what they want in that moment, and if your staff can easily deliver it. Update the criteria based on the first two points. Have you defined and reported on the digital standards you expect your team to meet? Has your brand tone documentation been updated to incorporate instant communication? Are emojis allowed? Leading luxury hotels Business owners are thinking about these things, and you should be too. Finally, be realistic. In a world where everything is a data point that can be captured and reported on, there can be too much data. Understand what data is important to reveal to specific teams during the guest journey setup stage to ensure the best way to deliver a personalized in-person experience and ensure it is operationally actionable. provide opportunities for the team.
About Allianz
Allianz has helped many of the world’s most respected brands deliver superior customer experiences. Founded in 2009, Alliants has built industry-changing technology solutions, including award-winning mobile and chat applications that transform the digital guest experience for millions of guests around the world. In 2022, Allianz secured a minority equity investment from Zendesk, Inc. (NYSE: ZEN), a global customer experience software company headquartered in San Francisco. In 2023, Allianz was recognized as a UK Tech™ Best Workplace, a recognition based solely on employee feedback.
www.alliants.com
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