tree line room reflecting the rise of experiential hospitality and how the best hotels deliver exceptional customer experience

Luxury hospitality begins with a signature property, but a well-situated, beautifully designed hotel is only a start. Stellar service, driven by devoted hotel staff, is what makes a great property come alive. As one general manager (GM) of a luxury hotel told us in an interview, “Our facility is our stage, and guests are paying for a performance.”

NB: This is an article from McKinsey & Co.

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Distinctive, superior service is more important now than ever. The luxury segment is projected to grow at 6 percent per year through 2025 – faster than any other chain-scale hotel class – and competition for customers is intensifying, as luxury hotels proliferate and alternative options (such as stylish rental villas equipped with chefs and staff) enter the marketplace. Nonluxury properties have also closed the gap on some of the physical details that indicate luxury, such as sumptuous mattress tops and rainfall showerheads.

Meanwhile, across the entire service landscape, the meaning of luxury is shifting. Affluent customers increasingly value unique experiences – not just the tangible product – and vibrant atmospheres over opulent formality. Data on consumer spending substantiates the notion that interest in recreational experiences is generally rising while interest in nonessential goods is generally subsiding (exhibit).


Consumers show increasing interest in experiences.

Today, the most powerful differentiator in the service sector is a culture of excellence – powered by staff that can anticipate customers’ needs, exceed expectations, create cherished memories, and make it all feel seamless. Luxury properties may potentially see more return from investing in this type of culture than from coating the hotel with marble and gold plating the bath fixtures.

To learn how the GMs of the world’s best hotels create healthy, supportive, and winning service cultures, McKinsey interviewed a dozen current and former GMs who have worked at iconic hotels across five continents (including properties from luxury and ultra-luxury brands such as Aman, Four Seasons, InterContinental, Jumeirah, Mandarin Oriental, Raffles, Shangri La, and Six Senses, as well as independent luxury properties). Their strategies were developed with luxury hospitality in mind, but the lessons they impart can be applied across many other service contexts and price points: McKinsey research shows that the primary reason consumers cite when asked how they’ll choose a travel brand in the future is not value, quality, or convenience but “positive past experiences with the brand.”

Create a culture of excellence

Great service flows from a culture that values quality and dedication. Establishing this culture begins with exemplary leadership. “Culture is not a sign on a wall or a saying in a textbook,” said one luxury hotel GM. “It has to be driven by a leader, 24/7, on good days and bad.”

Assume the role of chief culture officer

To build a winning culture, leaders should instill foundational principles on day one. “I attend every new-hire orientation and share my expectations,” said one GM. “I make it clear that I expect us to greet guests by name, anticipate their needs, constantly seek to learn more about who they are and why they’re here, and never let them leave an interaction feeling unhappy.”

Read the full article at McKinsey & Co.