Hotel guest satisfaction with costs, fees up, overall satisfaction tanks

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WESTLAKE VILLAGE, Calif. – Hotel guest satisfaction with costs and fees has improved despite higher room rates, while satisfaction with other service and product-related aspects has declined amid increasing occupancy rates, according to the J.D. Power and Associates 2011 North America Hotel Guest Satisfaction Index Study(SM) released today.

Now in its 15th year, the study measures overall hotel guest satisfaction across seven hotel segments: luxury; upper upscale; upscale; mid-scale full service; mid-scale limited service; economy/budget; and extended stay. Seven key measures are examined within each segment to determine overall satisfaction: reservations; check-in/check-out; guest room; food and beverage; hotel services; hotel facilities; and costs and fees.

The study finds that satisfaction with costs and fees has increased to an average of 739 (on a 1,000-point scale) in 2011—20 points higher than 2010. Meanwhile, occupancy and average daily rate in the U.S. hotel industry have been steadily increasing during the past year. According to Smith Travel Research, Inc., occupancy is up to an average of 65.1 percent as of May 2011, an increase of 4.6 percent compared with May 2010. During the same time frame, average daily rate has increased to an average of $101.54, up by 4 percent from last year.

The improvement in hotel guest cost and fee satisfaction, despite higher room rates, runs counter to the general pattern of customers being less satisfied with higher prices. For example, in the J.D. Power and Associates 2011 North America Airline Satisfaction Study,(SM) each airline that implemented price increases experienced a decline in satisfaction with fare costs.

“Unlike the airline industry, in which prices were raised aggressively amid limited seat supply and high demand, the hotel industry has enacted more modest price increases and has had spare room capacity,” said Stuart Greif, vice president and general manager of the global hospitality and travel practice at J.D. Power and Associates. “The benefits of higher occupancy have outweighed taking a more aggressive posture on average daily rates, as putting ‘heads in beds’ has taken priority.”

“The bright spot for hotel guests is that costs and fees remain relatively low, so the value received for the price paid is still quite high,” said Greif. “The bright spot for hoteliers is that there appears to be more upward opportunity on rates.”

While satisfaction with cost and fees is higher in 2011, compared with 2010, satisfaction with other areas of the guest experience—ranging from facilities and operations to services—has decreased. As a result, overall satisfaction averages 764 in 2011, down from 771 in 2010.

According to Greif, many chains are now making investments that were delayed due to the downturn in the economy, but which will take time to complete. Hoteliers are also being careful not to add more staff until they believe higher levels of demand will be sustained. At the same time, guests are returning to hotels in greater numbers, reversing satisfaction gains realized when hotels were less busy during the downturn. The decline in overall satisfaction in 2011 reflects that hotel improvement efforts and investments are lagging behind rising customer expectations.

The following hotel brands rank highest in guest satisfaction within their respective segments:

Luxury: The Ritz-Carlton (for a second consecutive year)
Upper Upscale: Embassy Suites Hotels
Upscale: Hotel Indigo
Mid-Scale Full Service: Holiday Inn
Mid-Scale Limited Service: Drury Inn & Suites (for a sixth consecutive year)
Economy/Budget: Microtel Inns & Suites (for a 10th consecutive year)
Extended Stay: Homewood Suites (for a second consecutive year)

The study finds that 18 percent of hotel guests in 2011 report having experienced a problem during their stay. However, the rate at which guests report a problem to hotel staff varies widely by the type of problem experienced. For example, noise is the problem most commonly experienced by guests, with 16 percent indicating experiencing the issue. However, only 43 percent of these guests indicate they reported the noise to hotel staff. In contrast, just 13 percent of guests say they experienced a problem with the Internet connection or speed at their hotel, but 60 percent reported the problem.

Despite the difference in the rate at which these problems were reported, resolution rates were similar. Among guests who reported noise problems to hotel staff, 35 percent say their problem was resolved. Among guests who reported Internet usage problems, the resolution rate averages 39 percent.

Problem occurrence has a strong negative impact on overall hotel guest satisfaction. Satisfaction among guests who experience a problem during their hotel stay averages more than 100 points lower than satisfaction among guests with a problem-free experience.

“Hotel guests should feel justified in reporting any problem that negatively impacts their satisfaction with a hotel,” said Mark Schwartz, director of the global hospitality and travel practice at J.D. Power and Associates. “Hotel staff and management will usually try their best to resolve these issues, particularly since they understand that solving a problem can result in a happier, more loyal customer.”

The 2011 North America Hotel Guest Satisfaction Index Study is based on responses gathered between June 2010 and May 2011 from more than 61,300 guests from Canada and the United States who stayed in a hotel in North America between May 2010 and May 2011.

(1) The upper upscale segment has been added to the study in 2011 to reflect standard segmentation used by the hotel industry.

Customer Satisfaction Index Ranking

J.D. Power.com Power Circle Ratings

(Based on a 1,000-point scale)

For Consumers

Luxury Segment

The Ritz-Carlton
858
5

Four Seasons Hotels and Resorts
852
4

W Hotels
833
3

JW Marriott Hotels & Resorts
832
3

Luxury Segment Average
829
3

Fairmont Hotels & Resorts
822
3

Loews Hotels & Resorts
815
2

InterContinental Hotels & Resorts
809
2

Included in the segment, but not ranked due to small sample size are: Park Hyatt Hotels, Sofitel, St. Regis Hotels & Resorts and The Luxury Collection.

Upper Upscale Segment

Embassy Suites Hotels
817
5

Omni Hotels & Resorts
811
5

Marriott Hotels & Resorts
808
3

Westin Hotels & Resorts
801
3

Renaissance Hotels
799
3

Hilton Hotels & Resorts
796
3

Upper Upscale Segment Average
795
3

Hyatt Hotels & Resorts
788
3

DoubleTree by Hilton
786
3

Sheraton Hotels & Resorts
768
2

Millennium Hotels and Resorts
713
2

NOTE: Le Meridien is included in the segment, but not ranked due to small sample size.

Upscale Segment

Hotel Indigo
838
5

Hyatt Place
819
4

Hilton Garden Inn
817
4

SpringHill Suites
814
4

Aloft
800
3

Courtyard
798
3

Upscale Segment Average
794
3

Delta Hotels and Resorts
792
3

Wyndham Hotels & Resorts
791
3

Four Points by Sheraton
772
2

Radisson
761
2

Crowne Plaza Hotels & Resorts
760
2

NOTE: Cambria Suites is included in the segment, but not ranked due to small sample size.

Mid-Scale Full Service Segment

Holiday Inn
775
5

Best Western
765
4

Mid-Scale Full Service Segment Average
752
3

Ramada Inn/Plaza
725
2

Clarion
721
2

Quality
719
2

Howard Johnson Hotels/Plaza
691
2

NOTE: Wyndham Garden Hotels is Included in the segment, but not ranked due to small sample size.

Mid-Scale Limited Service Segment

Drury Inn & Suites
836
5

Hampton Inn/Suites
824
5

Wingate by Wyndham
817
4

Holiday Inn Express
797
3

Fairfield Inn & Suites
793
3

Country Inns & Suites
788
3

Mid-Scale Limited Service Segment Average
787
3

Comfort Suites
778
3

La Quinta
771
3

Sleep Inn
766
3

Comfort Inn
752
2

AmericInn
751
2

Baymont Inn & Suites
746
2

Ramada Limited
700
2

Economy/Budget Segment

Microtel Inns & Suites
740
5

Howard Johnson Express/Inns
704
4

Days Inn
701
4

Red Roof Inn
700
4

Super 8
685
3

Travelodge
679
3

Economy/Budget Segment Average
679
3

Econo Lodge
664
3

Motel 6
662
3

Americas Best Value Inn
643
2

Rodeway Inn
629
2

Knights Inn
615
2

Included in the segment, but not ranked due to small sample size are: America’s Best Inns & Suites, Budget Host Inn and Country Hearth Inn & Suites.

Extended Stay Segment

Homewood Suites
821
5

Residence Inn
819
4

Staybridge Suites
817
4

TownePlace Suites
806
4

Hawthorn Suites by Wyndham
792
3

Candlewood Suites
787
3

Extended Stay Segment Average
782
3

Extended StayAmerica
709
2

Homestead Studio Suites Hotels
703
2

Included in the segment, but not ranked due to small sample size are: Hyatt Summerfield Suites, MainStay Suites and Studio 6 Extended Stay.

Power Circle Ratings Legend:

5 – Among the best

4 – Better than most

3 – About average

2 – The rest