The Truth About Hilton’s Future, and What They’re Getting Rid of Next

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 porn multimedia.

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.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I’m not a Hilton person, haven’t really stayed at any of their properties, but I gotta admit that I agree with pretty much everything he brought.

    Room Service is crazy overpriced and usually awful. With advent of Seamless and GrubHub, it’s also completely obsolete. You get better food to your door for less.

    Bellmen aren’t really useful at your typical Hampton Inn, but I’ve seen what people have packed up when departing their hotel in Knightsbridge and those bellman must have been worth their weight in gold.

    I don’t know anyone who stays at hotels who regularly uses the robe and slippers and, personally, I’ve turned down the turn down service every single time when I stay.

    Basic wifi should be free just simply to handle simple communication tasks (such as email, printing boarding passes, directions, etc) and premium wifi can be reserved who want to stream netflix. I prefer hotels that tier their internet actually, as it is usually much faster than ones that completely give it away.

    Bottled water, who cares, drink tap if you’re really thirsty.

  2. Interesting…. it seems to me that opinions on this will be ALL OVER the place.

    If there is no robe I’m OK with it; but if my wife is traveling there better be a robe! And I think bottled water ought to be included and complimentary; it certainly isn’t more expensive in bulk than a high-speed connection into the hotel and is certainly safe than drinking from the tap (my assumption).

    Anyway, some will win and some will lose but there will be a lot noise in between! 😉

  3. I wouldn’t mind drinking tap water if I could trust drinking glasses to be sealed/clean. There have been some really gross examples over the years; I now bring dish soap minis with me. I believe they just “swish” glassware. Uggh.

    When it’s clear that the glasses have gone through a dishwasher (delivered by the minibar person), I’m good with it.

  4. We tend to travel for work at upscale hotels–on paid stays–and for pleasure at luxury hotels–on paid and award stays. I am 44 and my husband is 56.

    Room service for me is an absolute must–whether I’m traveling for work or pleasure. Yes, it is more expensive. Yes, it isn’t always as good as at the hotel restaurant or nearby restaurants. But when traveling alone on business I love the ease and convenience, and when traveling for pleasure sometimes I prefer to have a morning to sleep in and have room service. I select hotels specifically knowing whether they offer 24 hr room service or limited hours in this regard. For budget/midscale hotels, I can understand limiting or eliminating room service, but for upscale and luxury hotels that would be a bad move based on my travel habits. (Fortunately, I stick mostly to SPG and Hyatt, and their room service has always been better than that of Hilton in my experience.)

    I agree that we never use bellmen, often even when at luxury hotels–as we tend to carry on almost everywhere unless we must adhere to a restaurant jacket requirement (which we despise). Even then, we never use bellmen. So we can see budget/moderate hotels doing away with bellmen, while upscale may in some markets and not others, but it is tough to imagine most luxury properties risking this.

    Turndown is something I enjoy when on holiday–but don’t always care. It’s nice to come back from dinner and the bed is made up and shades drawn, especially in some properties where there are many shades or in suites with many windows. For pleasure, it matters more. For luxury hotels, turndown is likely not going anywhere. For more business focused hotels, this could be fine, perhaps. For budget and midscale, I doubt anyone cares.

    We will start to see the different brands differentiate more along some of these lines. If Hilton eliminates room service from its Northeast and California properties, that likely drives many to Starwood and Hyatt. Millenials, in particular, are more likely to want room service and in-hotel dining options.

  5. @Bill – actually, millenials are more likely to use the Yelp app to look up an awesome local restaurant, cross reference it to Eater to make sure it’s legit, call Uber to take them there or Seamless to bring it to them, and be enjoying their higher-quality food at half the price while the grumpy old guys down at the Hyatt are still waiting for the room service cart to come bumping along with the $25 burger and 30% service fee. So speak for your own generation!

  6. For me, it’s a mixed bag.

    Bellman run the gamut from annoying to necessary, depending on how much luggage I have, or if I am traveling with my wife (who is often tired at the end of a long day of travel, and appreciates someone else taking over the little things when we get to our destination.)

    Turndown service sets a welcoming and luxurious tone, and is especially wanted when I’m with my wife; it creates a romantic tone, and makes us feel like we’re being taken care of. Good hotels should provide something that’s better than being at home. Otherwise, why not stay someplace inexpensive…or just stay home?

    Slippers are a giant who cares. I’ve never used them. Robes, on the other hand, are indispensable. I won’t stay at a hotel a second time, if it doesn’t have them the first.

    Room service is something I look for, and miss when it’s not there. They set up the table and create a dining experience, which is more than just bringing food. They also take care of special requests (IE: champagne and chocolate covered strawberries waiting on the bed, when we arrive.) Seamless can’t provide that.

    Most importantly, why would I stay at a hotel that isn’t in the service business? Over the years, Hilton has made me feel unwelcome, and I’ve begun thinking of them as uninteresting and substandard. I’ve shifted my loyalty to Hyatt (for their consistently high level of service) and Marriott & SPG (because each of those chains are operating more and more interesting, and unique properties, in more and more places.)

  7. Totally agree with #Tom on level of service. I am Diamond at both Hyatt and Hilton. Hyatt consistently makes me feel more valued than Hilton does.

  8. I’m a “Millenial” and I disagree w/ CW. If I’m at a hotel w/ room-service, I typically use it at least once. I love the convenience and the feeling of being pampered, and like Tom said, RoomService “sets the table” & “creates a dining experience”.

    My time is too valuable to waste it calling Yelp, then Eater, then Uber or Seamless. Honestly I don’t want to deal with all the logistics. I just want food. At that point I’ve surely dealt enough w/ logistics already, just getting the desired hotel room and getting myself & my luggage transported there. Maybe CW enjoys making arrangements his whole trip, but I don’t.

    Sounds to me like the Hilton CEO is intent on changing his target customer. It makes sense, as there are more mid- & budget travelers. But in essence, he’s talking about re-defining the Hilton brand, changing it from classy to Motel6.

    Fine. But then he darn well better lower the Hilton prices. Because I’m not paying Hilton prices for a Motel6 experience.

  9. When I’m traveling for work I often have 11+ hour days. I just want to collapse and order room service. Saving $10 is not a priority. I don’t eat junk food, so it’s not like I can really save a whole lot going to a restaurant.

  10. I stayed 3 nights at a Doubletree in June and was appalled the hotel had no valet and no bellmen.

    This for a 14 story hotel with 300 rooms.

    I appreciate help with my bags and prefer not to walk through a distant outdoor parking lot to my car. Bellmen do not annoy me, I am happy to tip.

    “Complimentary Parking” is not a benefit when the parking lot is outdoors.

  11. Looks like this Hilton guy nailed it. I don’t use robes/slippers except at resort properties – most are lame anyway (haven’t found any that remotely compare to my uber thick Egyptian cotton robes). Turndown is a ridiculous concept. Stay out of my room unless you’re there to clean it. As for room service, I avoid like the plague, but do find it handy on rare occasions when arrive late at night and the lounge is closed. I’d rather see a well stocked and reasonably priced mini fridge to grab a quick snack and a beverage. Wifi should be ubiquitous at low speeds – it’s not a luxury but a necessity – like having sheets on your bed or lock on your door. Charge for higher speed – plenty will do it to get streaming access.

  12. It’s interesting to see the mix of responses. Here’s my thoughts as someone who travels about 75 days a year for work and a couple of family trips a year.

    Bellmen, if the hotel has a luggage cart I don’t need them as I prefer to self-serve.

    Room service, even after 12+ hours of work, I still prefer to dine out, usually stopping on my way back to the hotel.

    Turn down service? I really don’t need or want it.

    Robes and slippers are a joke, if I really wanted those I’d bring them.

    That said, I think the key to Nassetta’s statements is that customers are willing to pay more for those items, indicating a move towards a greater differentiation between the luxury brands like Waldorf and say a DoubleTree.

  13. If they could just eliminate those pesky guests, that would solve all their problems.

    -David

  14. @Lindy

    You nailed my exact thoughts.

    I USED to think of Hilton as a luxury brand, now not so much. I only retain gold with them because of my play Amex and stay there when I have to.

    Since the gutting of their program, I shifted all of my personal and business stays to SPG and haven’t looked back. Their experiences are almost always positive and I find even their Alofts markedly more upscale than Hiltons.

  15. Hilton is a worldwide brand. I assume these proposed changes are only for the US. Slippers are a must in Asia. Hilton will also find it hard to eliminate robes, room service and bottled water in their properties abroad. Even though I travel with a carry-on bag, at some properties a bellman’s explanation of room features and general property lowdown is worth a small tip.

  16. I don’t really care about other stuff, but slippers are a must to me…

    I really hate US properties that don’t have slippers. I love asian hotels where I don’t need to carry my own slippers when travelling…

  17. Perhaps my view is skewed as I only stay at 5 star properties, but I like bellmen, I use room service, I appreciate turndown service, and I enjoy robes (slippers, not so much). I rarely stay at any Hilton anyway and when I do I’m not impressed.

  18. What he seems to not understand is the difference between a full service hotel at which guests expect the things he is saying they want to get rid of and limited service hotels. Sure I don’t have turndown service at home but when I’m paying a premium for a room I sort of expect it. If I’m staying at a Hampton then I don’t expect it…because I don’t feel like I am paying for it. I just don’t get stuff like this! Sure cost savings are what he is looking for but then you might as well limit your hotels to all being limited service hotels.

  19. Being a single traveler for the most part AND female, I only stay at hotels/resorts that offer GOOD room service. This allows me to relax and rest after a hard day or while getting ready for a hard day. It also prevents “unwelcome” attention and conversations (people can really be aggressive!). I research my travel quite thoroughly and it irks me to no end when I have to find out necessary info on sites other than the hotel’s to see what services they offer (Tripadvisor). I often have contacted hotels about services/menus and the staff seem clueless! Robes, slippers and turndown service are not necessary. This struck a nerve, glad to know this about Hilton – I won’t be staying there!

  20. You can’t really bring robes, a good fluffy robe is larger than my entire bag. The rest of the stuff, yeah, who needs it.

    @dee Wow, it just goes to show the different opinions. I’m a female and frequent solo traveler as well, and I NEVER use room service. I don’t travel to be shut up in my room. Anyway where am I more likely to get aggressed on? Alone in a room with some random tip hustler or out in public? Yeah, sometimes there’s a chatty lonely heart at the bar but oh well.

  21. I think most of this is essential. Do I get turndown service at home? No but I don’t pay an extra $200 a night to sleep at home. Also, I travel often with my Grandma. Have you ever tried to push a wheelchair and carry 5 pieces of luggage? A bellman is essential in that case. I have to have help, want it or not. The is true when traveling with children. Room Service is another most. I love traveling for work alone and ordering room service. Finally, I don’t have to cook or clean and I can sit in my PJ’s, lay in bed and watch TV and eat! It’s an awesome luxury to have for somebody that is usually very busy. Hotels are in the service business. If you get rid of all the services then what are you providing. I will stay someplace else where I can get the service I am paying for.

  22. One more comment. It would be the same as going to a full-service restaurant and being expected to cook you own meal and do the dishes. I will not be paying a premium price if the only thing I get to do is eat in your restaurant (or sleep in your hotel room).

  23. I want robes, at least on request, preferably in the rooms. Also bottled water and an in-room coffee maker.

    I couldn’t care less about bellmen and room service.

  24. Turn down service are for kids

    Bellmen want the price of what to carry the same bag that I just dragged around LHR and birch because the airline wants $25 to carry it on a domestic flight

    Robes and slippers I do not wear other people’s used clothes from salvation army stores why would I wear a used robe

    Bottled water.. how much more can we be less green? Get a reusable cup and bring it with you. Hotels should provide filtered taps for their guest to refill their OWN bottles with

  25. “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.”
    =============================================

    Well, Mr. Nassetta of Hilton, I’ll just check in which my pet water tank, okay?

    Thanks

  26. I’m a loyal Hilton person and feel guilty when I roll my own bag around the lobby, but I do it anyway. On a road trip or after travelling by rental car, I appreciate the help getting everything up to the room. I order room service all the time, but would prefer to trot down to the lobby and pick up food myself. I always pack a robe … the hotel is wasting money and resources laundering them. I’ve never liked turndown service, in fact I hardly ever give housekeeping access to my room, I don’t like them messing with my stuff. I hate to see good people lose their jobs, tho.

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