New Research Exposes Hidden Service Risks for Hoteliers

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October 21, 2019

Hoteliers Left in Dark with 75% of Guests Not Reporting Problems

Jason Hekl

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In the age of experience, service is more important than it’s ever been. In hospitality, operators are working overtime to uplevel the service they provide to keep their guests happy and coming back for more. And while most operators know they have an incomplete picture when it comes to the end-to-end guest experience, the extent to which issues are going unreported might be surprising for all.  

Only 25% of hotel guests say they will report any issue that affects their stay. Let’s think about this for a second: Three out of four guests are saying they don’t report every issue that impacts their guest experience. That’s concerning.

That data comes from the recent research study Zingle commissioned to more than 1,100 respondents, weighted for the US consumer population by age and region (download our Guest Service Report here to see the full survey results).

It’s troublesome that hotels have limited visibility into service issues, particularly with guest satisfaction known to be correlated to effective guest service and successful service recovery. Limited visibility means limited opportunities for hotel staff  to course correct the guest’s perception of the property. Worse yet, there is a risk those issues remain unresolved for future guests, compounding what may have been a simple problem to solve.

Think about the inverse of this: 75% say they don’t report issues that affect their guest experience.

But that blind spot also provides an incredible opportunity for hoteliers. With better visibility into what guests are experiencing in the moment, hotels have an opportunity to recover goodwill with those guests nearly immediately, and improve the overall experience for the next guest by resolving issues that may have otherwise gone unnoticed.

As our study confirms, guests whose expectations are surpassed will share their positive experiences online. And with TripAdvisor recently reporting that 81% of travelers always or frequently read reviews before booking a place to stay, those positive reviews are critical to not only gaining more business, but also to driving higher room rates. In fact, more than 86% of our survey respondents say they are willing to pay extra to stay at a hotel with superior service than nearby alternatives.

Let’s take a closer look at the survey results that stood out the most and dive deeper:

Nearly 50% of Guests Don’t Report Problems Because There’s No Easy Way or They Don’t Like Confrontation

So what’s the number one reason that’s keeping these issues from being reported? It turns out there’s a tie. The biggest reasons guests aren’t reporting issues are because there’s “Not an easy or quick way to do so” and because “Businesses make mistakes too” —  both of which came in as the top response (28%). 

Coming in at a close second is the fact that guests don’t like confrontation (21%), with Gen Z and Millenials the most likely generation to choose this option (28% & 25% respectively). Baby Boomers were far more likely than other generations to say that the top reason they don’t report issues is because there’s not an easy way to do so (36%).

Why are these generational highlights important? Across industries today, but particularly in travel, it’s all about the millennial. And for good reason. There are more than 70 million millennials in the United States alone, and this generation is poised to outnumber Baby Boomers this year. The United Nations has also reported that 20% of all international travelers are millennials, which amounts to around 200 million people.

In light of the barriers keeping guests from reporting issues, perhaps it’s not surprising that 46% of respondents said that they would prefer reporting an issue through SMS (text) or a messaging application versus phone, email, and in person. An additional 36% said they would “Maybe” prefer the alternative.

Not surprisingly, digitally native Gen Z & Millennials were the most likely to say they would prefer to report an issue via SMS or a messaging app over phone or in person (58% & 56% respectively). 

More Than 86% of Travelers are Willing to Pay More for Better Service 

In an age where stellar customer service has become an expectation and a brand differentiator, we wanted to see how much guests were willing to pay for good service. When asked “How much more are you willing to pay for a hotel at a destination that has similar amenities to other hotels nearby, but far superior service?” the top response was $10-$25 (36%), followed closely by $25-$50 (35%). This is big news, and follows inline with other recent studies that show consumers are willing to pay more for a better experience. One such study from PwC found 42% of consumers said they would pay more for a friendly, welcoming experience, and 52% would pay more for a speedy and efficient customer experience. 

Of the 86% willing to pay more, 35% said they’d be willing to pay $25-$50 more for superior service.

All in all, 86% of travelers are willing to pay more for better service — music to all service manager’s ears.

With every industry, including hospitality, looking to decode the expectations and purchase habits of younger generations, hotel operators should take note of how these results break down by generation. While Gen Z may be the youngest cohort, and naturally trailing behind older generation in terms of individual spending power, it’s interesting to note that they are the most willing to spend more for better service. 

In fact, 1-in-5 (19%) Gen Z respondents said they’d be willing to spend an extra $50+ for a hotel that provides superior guest service. Millennials weren’t far behind, with 18% reporting the same. This isn’t surprising given these generations preference for consuming experiences over material things.

More Than 50% of Consumers Say Online Reviews “Greatly” Impact Purchase Decisions

With virtually every aspect of the customer journey shifting online, it’s only natural that consumers — especially millennials who make up the largest generation of travelers today — continue to use the internet to seek information that can guide their purchase decisions. When it comes to the hospitality industry, sites like TripAdvisor have become a trusted resource for millions of travelers seeking information and recommendations on destinations. 

Even further, these online reviews have been shown to have a direct correlation with a business’s bottom line. In fact, a Harvard report found that every one star increase in a Yelp rating equates to a 5% to 9% increase in revenue. Our study reinforces the significance that online reviews have to a business’s success.

When asked, “How much do online reviews impact your decision to give a company (hotel or any other company) your business?” 51% respondents said “Greatly,” with an additional 45% saying online reviews impact their decisions “Somewhat/a little.”  It’s interesting to note that respondents were 12 times more likely to say that online reviews “Greatly” impact their decisions than those that said “Not at all” (4%).

Looking at things by generation, once again, Gen Z & Millennials were neck and neck in their responses. 58% of the former and 59% of the latter saying that online reviews greatly impact their decision to give a company their business. 

When it Comes to Driving Online Reviews, It’s Not Enough to Meet Guest Expectations

If online reviews are having such a direct impact on purchase decisions than what do hotels need to know about the type of experiences that are driving these reviews? Let’s start with good experiences. 

When asked “How good does an experience at a hotel need to be for you to share it (online/in a review)?,” respondents were most likely (37%) to say that the experience needs to “Surpass their expectations,” up one step from the minimum threshold of “Meets my expectations,” which only 1-in-5 respondents say is enough for them to share their experience online/in a review.

At this point the alarm bells should be ringing. With online reviews being a lifeblood for hotels and an obvious indicator of guest satisfaction, teams must find ways to wow their guests at every stage of their stay. 

When it comes to bad experiences, it looks like guests have a higher threshold in terms of reporting them, with 39% saying that an experience must fall “very short of my expectations” in order for them to share it online or in a review. That’s a good thing right? Well, not exactly.

From a reputation management standpoint it might keep frustrated customers from airing their grievances for the world to see, but this also ties into our findings that show issues are going unreported. How can operators rectify situations and ensure whatever caused an experience to go south doesn’t happen again? They can’t. 

This is where breaking down the barriers to reporting service issues become critical.

And 52% said they would consider returning.

Service Recovery Leads to Repeat Business & Emotionally Connected Customers

The fact is no matter how tight of a ship you run, issues are inevitable. It’s the recovery, or lack thereof, that matters most.

In fact, we found that 42% of our respondents would return to a hotel if they were able to turn a poor experience into a positive one by solving the problem immediately. An additional 52% reported that they “Would certainly consider it”

Even further, more than one-in-three (34%) of our respondents report feeling “More emotionally connected” to a brand when their customer service solves a problem for them. With 64% of leisure travelers and 52% of business travelers not showing loyalty to a specific hotel, and millennials being the worst offenders, it seems as though service teams have been overlooked as a powerful tool to drive loyalty.

So what are the main takeaways here? Let’s start with the good. Guests are willing to forgive hotels that fix service issues, will pay more for good service, and there’s also a clear tie between service recovery and brand affinity. However, it’s abundantly clear that operators are fighting an invisible enemy. The opportunities they have to safeguard the guest experiences they provide are being thwarted by the fact that guests are not empowered with an easy, frictionless way to communicate about their needs in real time. 

When an issue goes unreported by one guest, it’s likely to rear its head for the next and potentially cause a ripple effect. And one of those next guests might be the one who takes to an online review to put your hotel on blast and crosses your brand off their list permanently. 

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