Hotel customer satisfaction improves in first half 2008

August 18, 2008 | Hospitality Industry

Despite the current downturn in the U.S. economy, the hotel industry continues to satisfy customers at near-record levels, according to the most recent results of the Market Metrix Hospitality Index for the second quarter of 2008.

Customer satisfaction among all hotels is up (+1.0 to 82.7) compared to 2007. This is the highest score for the industry in nearly five years and close to the all time high score of 83 recorded in 2001, just before 9/11. The American Customer Satisfaction IndexTM (ACSI) also reports improved customer satisfaction for hotels for 2008 with the industry reaching record high scores.

Customer satisfaction up in a down economy

�The increase in customer satisfaction with hotels is certainly good news and surprising given the current economic pressures to reduce staff and services,� said Jonathan Barsky, Ph.D., vice president of research for Market Metrix. �But in this economy hotels are focusing more on their current customers. And with occupancy rates down 2.6 % in the first half of 2008, guest staffing ratios have remained stable. Other factors helping to maintain or improve customer satisfaction include recent investments in customer technology, facilities and new services; expanded satisfaction measurement programs and pay-for-performance compensation; and the growth of online customer reviews which help to manage guest expectations and deliver more pleasing hotel experiences.�

Comparing performance across the hospitality industry

For the first half of 2008, luxury hotels and midscale w/o food & beverage hotels showed the most improvement. Luxury brands showing the biggest gains include Intercontinental (+ 3.3), Taj Hotels (+ 2.8), and Ritz-Carlton (+ 2.8). The most improved midscale w/o food & beverage brands are Howard Johnson (+ 2.7), Ramada (+ 2.2), and Red Lion Hotels (+ 1.9). The only down-trending segment was Casinos with Flamingo Las Vegas (- 6.1), Excalibur Hotel & Casino (- 1.4), and Rio (- 0.8) posting the biggest declines.

Customer satisfaction with airlines rebounded slightly (+.5 to 73.8) from last quarter�s all-time record low score. But due to higher fuel prices there is no real improvement in sight. �Airlines continue to reduce flights and staff while raising fares and adding fees,� said Dr. Barsky. �That is not a formula to win consumer sentiment.� Further, according to the MMHI, three-quarters of all airlines have seen their satisfaction scores drop in the first half of 2008. Among the large carriers, United and Southwest show the biggest declines. Midwest is one bright spot, earning the award for most-improved airline, as well as top score in customer satisfaction for the first half of 2008.