Scott Mayerowitz interviews Hilton’s CEO Chris Nassetta and offers fascinating insight into how they think about what they want to offer their guests.
And I’m reminded throughout of the idea earlier in Nassetta’s tenure when they were talking about building new Embassy Suites hotels where the rooms weren’t all suites.
Let’s get rid of bellmen, robes, slippers, and turndown service.
Rolling suitcases have eliminated the need for bellmen and Nassetta questions if guests truly desire robes, slippers or nightly turndown service. Or at least are willing to pay the higher room rates they require.
“Do you get turndown service at home? If you do, let me know because I’d like to ask my family,” Nassetta jokes.
Lots of guests get annoyed by tip-seeking bellman wanting to carry your small rollaboard, though help with big suitcases on large trips is a different matter and this is also something that varies a great deal by market. The amount of luggage between North and South America is different than you’ll see at a business hotel in most major cities in the U.S..
Robes may not matter at hotels where there’s just a single guest for a single night, but resorts could be different. And if you’re getting dressed and ordering room service? But, oops, Hilton wants to get rid of room service too.
He made headlines last year with a decision to eliminate traditional room service in big city hotels.
The labor costs involved with delivering food to rooms makes it a money-loser for the hotel. But guests aren’t happy either with often overpriced, mediocre food. So Hilton and other hotels are testing a “grab-and-go” food outlets, particularly for breakfast.
“The customer gets a better price, better service and ultimately, in their minds, a better product,” Nassetta says.
It’s no secret why Hilton would start with a New York property to trial this: labor costs and union contracts. You can’t just renegotiate your employee costs, unless you eliminate the service. Then if you need to bring it back that’s ok you can do it from scratch with new costs.
Major Northeastern cities have high labor costs (and so do some California cities) and those are the places where I’d expect to see room service disappear first.
Then there is Wi-Fi. Most hotels — especially at the higher end — charge for it. Nassetta believes in three to five years a basic level of Internet access will be free across the industry, with hotels only charging for faster service.
The big problem hotels face is rationing limited bandwidth, when a small percentage of guests use most of it to stream
But don’t expect free bottled water soon, unless you’re an elite member of the loyalty program.
“Bottled water has a cost, has an environmental impact,” Nassetta says. “I don’t really want to encourage it. People pay for bottled water at their house, so I’m not sure why they can’t pay for it at our hotels.”
Good to know that Hilton Gold will be useful for something in the future.
What I found most striking about the interview was that there wasn’t much lip service, even, paid to customers as guests or a mindset of being in the hospitality industry.
Fair as far as it goes, but says much that can help us understand the value proposition being offered.
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