Hotel & Motel Management - June 16, 2008 - (Page 50) News H&MM June 16, 2008 | HotelMotel.com Market Metrix hospitality index 2008 1Q YTD segment winners ic downturns and not specifically affected by rising interest rates and mortgage problems,” Barsky said. “They absorb the costs more easily.” Another factor is that international tourists who are taking advantage of the exchange rate are upgrading to higher-end luxury accommodations, he said. The ACSI found the hotel industry tied the all-time high in customer satisfaction after improving 6 percent to 75. The other years the industry reached this level were in 2006 and 1994, when the ACSI was started. Much of the gain can be attributed to the “all others” category, which includes smaller budget hotel chains and luxury resorts, which rose 9 percent to 76, Van Amburg said. “What it seems to suggest is that there is not something peculiar to budget hotels or luxury hotels—it’s that the industry across the board is doing something to improve,” he said. The study found that, to some extent, guests get what they pay for, Van Amburg said. He pointed to the high scorers—Marriott International, Hilton Hotels Corp. and Global Hyatt Corp.— to show that although the room cost is higher, the quality also is higher, which leads to a higher levSegment Luxury Upper-upscale Upscale Midscale w/F&B Midcale w/o F&B Economy Company/brand Grand Hyatt Kimpton Hotels Staybridge Best Western Drury Inns Microtel Inns & Suites Score 87.3 92.3 89.9 80.3 90.0 81.9 Source: Market Metrix Guest satisfaction Continued from page 1 for them to spend more, even if they want to, said David Van Amburg, managing director of the University of Michigan’s American Customer Satisfaction Index. “In times of recession, there are things that happen no matter what. In a downturn, you will cut staff and services,” said Jonathan Barsky, v.p. of research and co-founder of Market Metrix. “Those two things weigh heavily when you go to a hotel. A lot of the free services are no longer free. That’s an important element, in that, satisfaction is not going down overall.” Luxury leads The Market Metrix Hospitality Index for 2007 found a slight increase in guest satisfaction (+.4) over 2006. For Q1 2008, satisfaction is up slightly (+.2 to 82) compared to Q4 2007. Luxury hotels are leading, with customer satisfaction up almost a point in Q1 2008 over Q4 2007. Barsky said the 1-point jump is important in luxury. “Luxury is raising prices more than anyone else, and still there’s increased customer satisfaction,” he said. “An intuitive guess why luxury appears more recession-proof is that the well-off customers are typically less affected by econom- American customer satisfaction index Hotel company/brand Hotel Industry Marriott International Global Hyatt Corp. Hilton Hotels Corp. All others Starwood Hotels & Resorts Worldwide InterContinental Hotels Group Choice Hotels International Wyndham Worldwide Best Western International 2008 75 78 78 78 76 74 74 71 70 70 2007 71 79 77 76 70 76 72 N/A 69 N/A Source: ACSI el of satisfaction. Marriott, Hilton and Hyatt tied at the top of the industry at 78. Choice Hotels International and Best Western International were at the other end of the scale, scoring 71 and 70 respectively. “A 70 for Best Western, if they were another kind of company in another industry, might not be a bad score,” Van Amburg said. “Within the hotel industry, since hotels are doing much better than that at an industry average of 75, that’s not the position you want to be in.” Best Western actually was the winner for the midscale-withfood-and-beverage segment in MMHI’s Q1 2008 results (see chart). Starwood Hotels & Resorts Worldwide saw a drop on the ASCI scale, down 3 percent from a year ago. Guest expectations In the MMHI, Kimpton Hotels posted the highest score (92.3) in Q1 2008 and also was the winner for 2007. The boutique hotel company outscored Ritz-Carlton, Fairmont Hotels & Resorts and other luxury brands. How is it that a boutique collection outscored the Ritz? “The well-accepted model of customer satisfaction is how well a company meets or doesn’t meet a customer’s expectations,” Barsky said. “Kimpton, given a more modest level, perhaps, of expectations, is meeting and exceeding guest expectations at a higher rate proportionally than the Ritz-Carlton.” This ties to the aspect of managing guest expectations, he said. “Ritz-Carlton is at the untenable position of reaching that high bar all the time for all guests.” The MMHI is based on 35,000 customer interviews conducted each quarter. The hotel portion of the ACSI is based on a little over 2,000 interviews. hgunter@questex.com Hanson Continued from page 1 to NYU, Hanson has served as an adjunct professor at the school and has been on its executive committee and advisory board. He has also been a visiting assistant professor at Cornell School of Hotel Administration, his alma mater; and is a Distinguished Conti Professor (named for an endowment) at Penn State. “I always have had an interest in academic hospitality programs,” Hanson said. “And I have always enjoyed working with students. I also enjoy the research elements of academia.” Starting in the fall, Hanson will be a fulltime faculty member, teaching managerial finance, a course on hospitality consulting, and a freshman-level class called “Introduction to the Lodging Industry.” He said when he turned 55 last year and became fully invested in the firm’s pension plan, he began thinking about what he should do next. “There was an opening for a faculty position at NYU and I decided to build on my affiliation with that school,” Hanson said. As a professor, Hanson will have tremen- dous professional experience to draw on. & Lybrand did. “That’s how we were able to He was with consultants Laventhol & Hor- build the other practices,” Hanson said. wath for 17 years and with Coopers & Ly“Our average fee at Coopers & Lybrand brand and PricewaterhouseCoopers for an- was 10 times that at Laventhol & Horwath,” other 17 (PWC is the result of a 1998 merger Hanson said of the repositioning. between Coopers& Lybrand and Price Wa“Now we look across the consulting proterhouse). His primary services for clients at fession and we see a much more valuable PWC, Hanson said, included strategic re- scope of services provided by many consultsearch; litigation and arbitration; due dili- ing firms,” he said. gence on transactions; and profit-improveAnd there have been commensurate ment studies. changes to the indusHanson said “I can’t imagine anyone try itself. Hanson rethere have been dracalled that, “In the having enjoyed a career as matic changes in the late 1980s and early arena of hospitality much as I’ve enjoyed my 1990s, due to changconsulting during policies first career—and I’m looking es in tax War, theand his career. When he the Gulf instarted, “feasibility forward to the next one.” dustry was forced to –BJORN HANSON studies and appraisredefine itself and als for to-be-built become more prohotels were 90 perfessional. It started to cent of what hotel consulting was,” he said. employ customer and operations research; “For my first two years at Coopers & Ly- also, an increasing number of hospitalibrand, we had a policy not to do feasibili- ty companies became public and were folty studies because we were looking for other lowed by independent research analysts, consulting tasks.” who also called for more discipline.” If a client called during those two years “In 1990, when we were in the midst of looking for feasibility studies, Hanson said this transformation, the industry lost $5.7 they would inquire about what else Coopers billion,” Hanson said. “In 2003, with the same industry-wide occupancy, we made $14 billion. That showed that the industry learned how to structure itself financially so it could generate returns for investors.” Hanson said he will continue to conduct and report on research—for quotation—as an individual and as a faculty member, and will continue to be involved in consulting “to the extent that I’m not competing with PricewaterhouseCoopers. My goal is not to become an independent consultant.” Hanson said even under the worst case economic scenario, the lodging industry will be profitable. “And looking ahead, the demographics of GenXers and Millennials present a very positive outlook,” he said. “We should always keep in mind that we are a cyclical industry.” Hanson said he has a lot to be thankful for. “Through all the many hours of overtime and extensive travel, I have been very fortunate to have the support of my wife Cathy and daughter Sabrina,” he said. “I can’t imagine,” Hanson concluded, “anyone having enjoyed a career as much as I’ve enjoyed my first career—and I’m looking forward to the next one.” And you can quote him on that. hmm@questex.com http://HotelMotel.com
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