Cover: Grounded in Service

Grounded in Service Hotels have been successful at making travelers feel good about brand loyalty

Bruce Schoenfeld
From the Print Edition:
Air Sick, Jul/Aug 02

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But, unlike the airlines, choices in the hotel industry are available. The bargain chains offer a clean room, cable television, a continental breakfast and sometimes much more for a fraction of the cost of more upscale lodgings. The catch is usually that you must be willing to forgo concierge service, a full lobby and a prime location.

In addition, the hotel industry seems to come up with innovative ways to increase revenues every year and pay for such services. It's true that some of those innovations, such as $10 minibar beers, $2.50 local calls and $40 parking fees, are as loathsome to consumers as a crammed overhead bin. Others, such as business centers, spa treatments and gourmet restaurants, are à la carte amenities that a hotel guest can choose to use or not.

But all of them provide a way for a property to gain incremental income from customers, and not always the customers staying in the hotel. "We have day spas in commercial locations that rely heavily on locals," says Tom O'Toole, a Hyatt senior vice president.

Like airlines, hotels are selling a perishable product that vanishes at the end of each day. And hotels can't simply cut flights when travel slackens. Those buildings are there, waiting to be filled even as the loan payments are due.

Yet hotels have done a far better job than airlines of making travelers feel good about giving a brand their business. "Rational management and customer sensitivity don't need to be mutually exclusive," O'Toole said.

As a result, airlines live from hand to mouth while hotels can take a longer view. "We don't retire a hotel after 20 years," says Hyatt chief operating officer Ed Rabin. "It's a fixed asset, around almost forever. You have to look down the road."

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