Hilton is considering ways that revenue management techniques could be used to improve customer satisfaction, and there are opportunities for airlines too.
Many service-focused organisations identify opportunities to ‘surprise and delight’ customers as a key vehicle for driving increased customer satisfaction and loyalty.
Revenue management and pricing in both hotels and airlines, however, sometimes seems to go in the opposite direction ie. ‘Surprise… by charging a new fee!’
Resort fees, bag fees, cancellation fees, seat fees – travel companies are now, unfortunately, better known for ‘hidden fees’ than their ability to ‘surprise and delight’.
With the move to fees for ancillary services, travel companies must communicate more and more clearly their value proposition, rather than contemplating how to increase customer loyalty.
Questions they could be asking include:
- What exactly does this hotel rate or airfare entail?
- What does this extra $25 offer?
Indeed, with such a focus on ‘pay for what you use’ there is little room for surprises that come without a fee. In this world, choice is supposed to be a customer benefit but is often regarded as confusing or ‘nickel and diming’ or a race to the bottom in customer service and product quality.
How Hilton is doing it
It doesn’t have to be this way. At a recent Eyefortravel conference, Jeff Borman of Hilton Hotels talked of various initiatives that Hilton RM has pursued. Using some of the same RM forecasting and optimisation techniques that are used to drive revenue, instead it focused on increased customer satisfaction and proved that yes, RM can support ‘surprise and delight’!
Borman explained how, as one example, Hilton leverages the installation of exercise equipment in a subset of its rooms at some locations. RM is therefore helping to maximise the value of that investment by forecasting how many rooms are optimal, which customers value that new feature and, finally, by properly allocating the equipped rooms.
