Hotels Go to Extra Lengths for the Repeat Customer

By: Harriet Edleson (NY Times) October 2013

When Leslie Ciminello arrives at the Hotel 1000 in Seattle, she knows milk and cereal will be waiting in her room’s refrigerator. Lactose-free milk and gluten-free cereal, that is.

It’s one of the small but significant ways the hotel has kept her coming back. Ms. Ciminello, 33, is on the road almost half the time as part of a sales team for a Boston-based technology company.

How far will a hotel go to attract and keep a business traveler like Ms. Ciminello? Pretty far, say industry experts and business travelers who reap the benefits of the competition.

As hotel occupancy rebounds from the depths of the recession and room rates increase, hotels across the country are increasingly emphasizing personalized services that do not show up on any list of amenities.

The goal is to win the battle for the repeat customer.

“The loyal, engaged guest is driving large amounts of revenue,” said Casey Ueberroth, senior vice president for marketing at Preferred Hotel Group. “If you take care of that guest, he keeps coming back.”

Ten percent to 15 percent of companies make up as much as 60 percent of the revenue, he said. The repeat customer is the one who stays at the same hotel 15 to 20 times a year. “That’s family,” he said. As a result, he said, hotels now must “do more, more, more to engage those travelers.”

Ms. Ciminello, for example, has stayed at Hotel 1000 in Seattle, a member of Preferred Hotel Group, 130 times in six years.

It took some effort to win her repeat business. After 25 visits, the hotel rewarded her, and it was not with loyalty points. “You’ve been here 25 times, here’s a free massage,” she recalled being told. “You’ve been here 60 times, here’s a facial or a spa pedicure. Sometimes they’ll let me choose what I want. You could never get that kind of attention anywhere else.”

A Deloitte survey released in January showed that only 8 percent of respondents said they always stayed at the same brand of hotel. “People want to get things that are important to them,” said Adam F. Weissenberg, vice chairman for the hospitality and leisure practice at Deloitte.

For hotels, the target customers are business travelers who are on the road up to 50 percent of the time because they can keep rooms full. They typically pay more because their dates are not flexible. “It is about capturing that guest who is going to be loyal to your hotel,” said Scott D. Berman, a principal at the accounting and consulting firm PricewaterhouseCoopers. “Hotels are expanding loyalty programs, expanding product offerings to satisfy what the most loyal guests want.”

Despite the growth of social media sites like Facebook and Instagram, hoteliers realize that they must use technology without losing track of the personal interactions and amenities needed to attract travelers.

“It’s a very competitive landscape,” said Paige Francis, vice president for global marketing at Aloft Hotels, which is owned by Starwood Hotels and Resorts. “There are a lot of options for travelers to choose from.”

Before, hotels were competing “on some of the basics — a great bed, free Wi-Fi, a great shower,” she said. Now, they are competing on amenities and services that are far beyond the basics — live music from emerging artists, interior design, personalized service based on knowing the individual guest — essentially differentiating the product and the service.

“In a hotel, you’re only as good as your last guest,” said Tawny Paperd, director of sales and marketing for Hotel 1000 in Seattle.

Hoteliers say marketing dollars tend to be a relatively small percentage of total revenue or total spending, typically 6 percent to 9 percent, and what falls into marketing varies.

In short, the intangibles — including human interaction — are a large part of what makes one hotel different from another.

To win repeat customers, hotels aim to create environments that will substitute for family or home for business travelers. “We create social engagement: taking care of people one-on-one,” said Eric Jellson, area director for sales and marketing at Kimpton Hotels/Epic Hotel in Florida. “We believe that there is still room for that personal engagement and personal relationships.”

For example, he said: “When you are not feeling good, someone sends up some soup. They may be missing their family so the hotel becomes their family.”
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