The customer comes first for the hotel industry

The customer is king in the hotel arena, according to a panel at today’s No Vacancy conference in Sydney.

Karin Sheppard, chief operating officer for Australasia, Japan, Korea & AMEA, said that as hotels get brave enough to charge what they think they can get away with, the quality of the product needs to back this.

“Brand consistency, renovations, and spending money where customers will appreciate it is becoming more and more important,” Sheppard said.

“There should be more room for rate growth, and things such as revenue distribution systems and the technology to maximise this need attention.”

But according to Mantra Group’s CEO Bob East, booking patterns aren’t changing as much as the industry is saying.

“Our lead time has dropped from 35.6 days to 35.2 days,” East said.

“So the lead time is not decreasing that much. If it kept decreasing like everyone says, people would be booking an hour before arriving.”

“I’d actually contend that online travel agents may well be the catalyst to drive room rates.”

And looking to the issue of brand marketing and driving room rates upwards, East says its important to give customers an understanding of what the property is offering.

“The customer is king, and if they understand the property offering at Peppers in Noosa is going to be different, but still similar, to the new Peppers in Melbourne, they can get behind that,” East said.

“In the noisy marketplace we’re operating in, we’d rather run less brands with more money, and this simple approach seems to be working for us so far.”

Starwood Hotels and Resorts’ regional director of development Andrew Taylor agreed, commenting that they look to building in the CBD first, and move out from there, as a way of bringing customers into their central properties before leading them outward.

“If someone comes to Sydney, sees the loft experience and likes it, then they’re more inclined to look to Parramatta and metro locations from there,” Taylor said.

In that vein, Taylor added that Starwood has three new hotels coming, one in Sydney in particular, however wouldn’t comment any further on the expansion.

Quest’s chairman Paul Constantinou added that the challenge for the industry is how hotels can offer the best price to customers, an imperative way to build customer loyalty and satisfaction.

“I think the technology today, and online travel agents like Expedia, who’ve got 80-85% of market, is great in boosting room rate and best price,” he said.

“But if our business relied just on that distribution, the bottom line is going to fail pretty quickly.”

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