Hospitalitys Sharpened Focus

Hospitality executives may not openly express it, but the bumpy U.S. economy has them on edge. Consumers are cutting back on vacation travel, more worried about putting food on the table or buying their children’s schoolbooks than enjoying a week or even weekend away.

Occupancy rates were down 2.6 percent during the first half of 2008, according to hospitality research firm Market Metrix in San Rafael, California. With their margins thinning and customers increasingly miserly, U.S.-based hotel chains are trying to boost service scores— and hence profits—by improving their employee training.

Hilton Hotels Corp., Ramada Worldwide Inc. and Best Western International are among major brands to unveil intensive service training that emphasizes the pivotal role that courteous, knowledgeable employees play in creating customer loyalty.

These efforts typically combine behavioral training and “on demand” technologies to motivate employees as advocates for guests, rather than merely working the front desk or changing the sheets. It’s too soon to tell whether the training can reverse the business slide, but industry observers say renewed zeal for contented customers has been quietly but steadily building, in lock step with declining economic conditions.

“Customer service is a huge focus of training now for hospitality companies. Customers are sick and tired of not being treated right” during hotel stays, says Deborah Curtis, director of the Hospitality Training and Research Center at Niagara University in upstate New York.

Curtis says her organization is fielding an increasing number of calls from hoteliers asking for help, prompted especially by the softening hospitality market. Their interest goes beyond training for staff that interacts with the public and includes back-office, support and maintenance people.

“When times are good, mistakes are easier to cover up. But when you lose even a few unhappy customers, the impact can be devastating,” Curtis says.

An annual study in July by J.D. Power and Associates determined that hotel visitors are more disenchanted than ever. Overall guest satisfaction with hotel stays fell notably across all segments in 2008, the first such dip in five years, according to J.D. Power.

Hilton is revamping service and quality training for its workforce of more than 100,000 people around the world. The move was spurred by a series of organizational changes. Hilton in 2005 acquired the lodging assets of Hilton International, a separate company consisting of Hilton properties outside the U.S. Just two years later, New York-based financial firm the Blackstone Group swooped in to acquire the newly merged Hilton companies for a record $26 billion.

Amid the upheaval, one of the biggest challenges is getting globally dispersed employees to read from the same playbook. The effort includes translating customized learning material into at least 16 and as many as 27 languages. The Beverly Hills, California-based chain is zeroing in on employee behaviors that provide guests with “hassle-free, personalized and informational service,” says Mark Keidash, Hilton’s director of brand education.

Hilton this year unveiled an online tool kit of learning content made accessible through a special intranet portal. The tool kit supplements the company’s formal orientation programs and periodic refresher courses offered on property.

Hilton employees at more than 500 hotels and resorts use it to quickly review quality and service standards, regardless of their job role, department or geographic location. Someone in room service, for instance, could click on interactive checklists to make sure they have fulfilled all required job duties, operating procedures and service standards. Managers likewise hand out “brand service cards” to their employees to reinforce the service standards.

“These global brand standards are our attempt to make sure there is some form of consistent interaction that happens with customers, no matter where in the world they are staying with us,” Keidash says.

Ramada Worldwide Inc., a midscale franchise based in Parsippany, New Jersey, is using the slowdown to capture new business from the hard-hit luxury segment, says senior vice president Mark F. Young. But Ramada isn’t alone in this approach. Competition for business has intensified. And since its competitors offer comparable amenities, Ramada hopes to distinguish itself on the basis of its people. (Midscale hotels are those priced between luxury and budget/economy properties. Some midscale properties offer full service like food and beverages, while other midscale chains offer limited services.)

“Customer service is the most important part of a stay,” Young says.

As part of the company’s “I Am Ramada” campaign, employees at Ramada’s 850 hotel properties around the globe sign pledge cards to exhibit “six pillars” of customer service. The idea is to create “caring experiences” for each guest, Young says.

The Ramada corporate name serves as an acronym: Employees are expected to be Ready, Anticipating, Making a Connection, Aware, Delightful and Appreciative (of customers). Training on the first three “commitments” was delivered during regional meetings in fall 2007. The final three were emphasized in a separate session earlier this year, Young says.

General managers reinforce the lessons with daily reminders, including posters and other printed material. Interactive tools also play a vital role. Employees learn at their own pace, using content that includes a streaming video game in which they must choose the best options for resolving any number of likely customer issues.

Since inception of the training in 2007, overall satisfaction rose 2.5 percent, based on 90,000 customer surveys. Customers gave high marks for overall service, knowledge and helpfulness of staffers who work with guests, Young says. Also, customer intent to return—a key measure of loyalty and satisfaction—climbed 4 percent.

Companies that fail to adequately prepare their people to serve customers put their reputations and revenue at risk, says Renie Cavallari, who runs Phoenix-based training company Aspire Marketing.

For every customer who complains, there are another 25 who remain silent but spread their dissatisfaction by word-of-mouth, Cavallari says, citing a study by the White House Office of Consumer Affairs.

Conversely, Cavallari points out that companies with solid training usually post gains in two key metrics: revenue per available room and gross operating profit per available room.

Best Western International’s five-year vision is to lead the midscale segment in customer care, says Ron Pohl, vice president of brand management for the Phoenix-based chain of 2,300 North American properties. By the close of 2008, Best Western expects to complete the initial rollout of its “I Care” program, which targets its roughly 50,000 employees across different groups. More than 70 percent of Best Western’s hotels are run by owners and operators.

“All our hotels are unique and there is no cookie-cutter approach. We wanted to create training that supports that,” Pohl says.

Rather than standardized behaviors across all properties, Pohl says employees are encouraged to tailor service that reflects their individual hotel’s regional flavor, giving it a “bed and breakfast feel.” One of the main goals is to get hotel staff thinking creatively by anticipating customer needs.

“It’s based on the golden rule: treating people as you would want to be treated,” Pohl says.

The economic slowdown was not directly responsible for the new program, although Pohl acknowledges it provides an opportunity for Best Western to shore up weak spots. The first phase involves implementing the practices at all hotels by the end of 2008, with the next rollout during the first quarter of 2009.

Hotel managers undergo “train the trainer” sessions to help them implement the “I Care” practices at their individual hotels.

Much of the training will be required, and its completion can be tracked online, Pohl says.

Finally, though, nifty slogans and one-time training programs aren’t enough, experts say. Hotels operators that mistakenly think of new service training as a special event will find that their efforts will fall flat in the long run. Instead, Cavallari says, a hotel company’s culture “is what delivers great customer service.”