Practical is the New Luxury
Major companies are canceling meetings worth hundreds of thousands of dollars — not because of costs but because of appearances. James Tisch, CEO of Loews Corp., says Congress is “killing the resort hotel business” as companies cancel meetings and conferences to avoid any whiff of extravagance that may trigger the government’s ire. Also called "the AIG Effect" (named for the insurance company that made headlines last fall for spending on a...
Major companies are canceling meetings worth hundreds of thousands of dollars — not because of costs but because of appearances. James Tisch, CEO of Loews Corp., says Congress is "killing the resort hotel business" as companies cancel meetings and conferences to avoid any whiff of extravagance that may trigger the government’s ire. Also called "the AIG Effect" (named for the insurance company that made headlines last fall for spending on a lavish spa retreat after receiving federal bailout funds), companies are shifting travel down-market or eliminating it altogether.
But now hotels are challenging the impression that business meetings are wasteful. In their support we found that hotels are in fact more "practical" than ever before. The latest MMHI results offer evidence that hotels are not piling on excesses, but are providing a good value and are responding to the economy with reasonableness and practicality.
Over the past year hotels have improved their "Practical" scores. Here are some comments from guests about how a hotel made them feel practical:
The Hilton Garden Inn made me feel practical because I wasn't paying much more than other hotel options in Effingham, but I feel I was getting much more for my money. The value proposition offered by the hotel was excellent.
It is very practical because everything you really need is provided, but nothing extravagant is available. This is not a hotel to 'pamper' yourself at all. You do your own cooking, wash your own dishes, and make your own beds. Room service is not an option. There is a television with cable, but no DVD or dirty movies for hire. There is not even a land line phone in the room, much less WiFi for your laptop. But overall, a very practical room to 'get away' in!
Price included the cold buffet, which was practical.
While the hotel is clean, modern, and fairly spacious by urban standards, it is not a luxury hotel, thus more on the practical side. Hotel parking is available but not included in the price.
We stayed at Home Suites, so it had a kitchen, and refrigerator, glasses, pots & pans. Having those amenities is a practical means for a hotel stay.
Bellagio was just that: practical. Not much more than other hotels I have stayed at.
Good value, so I was happy. I'm practical when I get a good value. Thanks.
The cost included breakfast, pool & fitness room - a good value making it a sound, practical vacation
The price on the back of the door said that the room could go for as much as $500 per night and we paid $79. In my book that's a bargain [read practical].
The kids enjoy much of the entertainment facilities available and so it's practical for us to stay at the Orleans so that we can all enjoy the stay.
Across all properties the top score for "Practical" was earned by Treasure Island, Las Vegas. According to Treasure Island management, this score is likely due to room discounts without significant reductions in service. Special promotions (e.g., "Welcome Home Soldier" – 3 nights for price of 2) have also boosted the sense of practical and helped keep their occupancy rates higher than other properties.
In 2008 Hotels were able to maintain service and reduce expenses without impacting the guest experience (e.g., Ritz-Carlton hotels are substituting potted plants for the fresh flower arrangements in its public areas). But with business falling off a cliff, some hotels are making reductions in service, some obvious and some subtle, that can affect the hotel experience. From reducing housekeeping staff (longer wait to get your room serviced) to simpler room-service menus and lower cost bathroom amenities, hotels are cutting deeper into their operating budgets.
To remain competitive hotels need to cut costs without losing customers. This can be achieved by understanding what matters most to guests and making cuts that have less guest impact. Inevitably, however, most hotels will also need to discount. Innovative and effective promotions, demonstrating value and reasonableness, can help maintain rates, drive occupancy and send the right message in this hostile environment.
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