Originally Posted by
Jon Maiman
This assumes that the TAM (Total Available Market) is large enough that churning customers will work. In some markets, that is probably true. In other markets, I am sure it isn't. For the latter, small gestures to keep repeat customers is good business. I would argue it is good business for all markets. Happier customers are more likely to do incremental spend at a property (Food, etc.). Granted there is a small amount of incremental spend to be made at limited service properties, but even it can be significant versus room rate. E.g. soft drinks, snacks, drink at the bar, etc. My two cents....
--Jon
I think that's a very good point. I think that's another reason why airport properties often don't try hard. If you're just there for a night or two, the opportunity for incremental spending diminshes
Originally Posted by
Jon Maiman
It depends. First, you're also making a mistake assuming all business travelers are road warriors that rarely return to the same location twice. Currently, my business travel is focused on two locations. Both of them have lots of both Marriott and non-Marriott properties available. So I have lots of choice. If I am treated poorly by a property, I can and will move my business to a different property.
Next, even for the road warrior who almost never returns to the same location, a property typically won't know that for their first stay. So they should treat them well, including honoring elite benefits, to encourage them to return. Same is true minus the elite benefits for non-elite customers. An exception where a property may know in advance that someone is likely to be a repeat customer is when they have a special rate for a nearby company. Folks booking with that special rate are more likely to be repeat guests. Even if the individual won't be a repeat guest, the nearby company as a whole has the potential to steer a lot of business to them. So I can see treating those folks booked with that rate especially well.
Putting that exception aside, treating an elite road warrior well still makes sense. While it may not help the individual property, it will help Marriott at a macro level. So indirectly all Marriott hotels should benefit by getting higher occupancy rates overtime.
TL;DR Elites should be treated well even when it is unlikely they will be a repeat customer. It is reasonable for a property to prioritize giving better treatment to known repeat customers or high likelihood repeat customers. Unless that consumes all of the better rooms for a night, the elite customer should still be given a good room or upgrade. Other elite benefits, like late checkout, should always be honored.
--Jon
I don't think you can make the assumption either way. I think the point was that just because someone is a very frequent guest of the chain, that does not necessarily translate into that person becoming a frequent guest of the hotel. I don't disagree though that as a result, the property should treat everyone well. However, since I don't run a hotel, I'll demur as to what's in their best interest
I seriously doubt that most Marriott hotels care about Marriott Corporation at a macro, mini, micro or any level except insofar as it affects their own occupancy level and room rates, i.e. if Marriott has a good reputation perhaps that will drive business to that hotel. And that's the problem. What many elite guests fail to realize is that their relationship with Marriott is purely transactional. If a hotel believes that treating a particular guest well will benefit the hotel, then that guest will be treated well.