The document summarizes the performance of different subsectors in the hospitality industry based on a benchmarking study. Some key findings: - All subsectors performed below targets in areas like welcome, warmth, personality, skills and creating a sense of value. Too much emphasis on training systems over guest experience. - Accommodation businesses only achieved a 77.68% welcome score. Being welcome requires exhibiting behaviors that make people feel welcome, not just saying hello. - Drink-led sectors offered the best perceived value while food-led teams appeared over-trained in the wrong things and lacked personality. - Only 5-star hotels achieved 90% in reflections, benefiting more from reputation than behaviors. Different

1. The Customer Experience in the
Hospitality Industry
Part 2
The Sub Sector & Competitive Set Performance
Sponsored by
© Customer Service Benchmarking Ltd June 2012
1

2. ARE YOU
BEING SERVED?
Why is it that we recognise the increasing demands of Using a first-class legal team combined with a unique
customers in the hospitality sector, but so often fail to apply technology platform, we can deliver fixed priced legal
the same measures to the legal profession? How often do you services in a more flexible, tailored way whether you are a
hear lawyers talking about customer service? small business, mid-sized company, or a large organisation
balancing your internal legal capabilities with an external
We believe all businesses, small or large, should expect the panel of experts.
same level of service from their legal partners as they do from
their hospitality providers. We’ve built our business model We know how important it is to meet both the changing
around the needs of our clients, providing price certainty and needs of our clients and their expectation for a quality
service choice. service at a fair price.
Learn more at www.RiverviewLaw.com or call 0844 257 6000
LEGAL MATTERS
2

3. Forward
“A vital piece of intelligence for all hospitality leaders.
Whether in preparation to welcome the world as hosts of the Olympic Games 2012 or
simply to grow sales and profit in the most competitive economic conditions for a
generation, this report, based on robust “actual” visit data identifies the challenges and
opportunities ahead.
The report presents compelling evidence for a shift in focus - to engage existing guests
and leave them with a desire to return and tell their friends. Peer to peer recommendation
has always been the most powerful marketing vehicle and in a social media-rich
environment the opportunities and risks are even greater.
Such customer centric intelligence, vital for competitive advantage, was not previously
available but Customer Service Benchmark now provides an accessible tool for all leaders
to assess where they are currently and to identify the scale of their opportunity-gap by
measuring and benchmarking performance in areas that matter.
The report raises some important questions and challenges.”
Bob Cotton
“A vital piece of intelligence”
3

4. Introduction
“When the majority are average, focus on and deliver
excellent experiences for competitive advantage”
In Part 1 we illustrated the performance of the hospitality industry. In Part 2 we drill down to consider the relative
performance of the sub sectors of the Hospitality Industry and each of their constituent competitive sets. We aim to
challenge. We aim to identify average and offer guidance for those who aspire for more by highlighting the performance
gaps and identifying opportunities.
Sub Sector Accommodation Food Led Drink Led
Competitive Sets B&Bs Casual Dining Community Pubs
Budget Hotels Fast Food High Street
3-4* Hotels Coffee + Destination Pubs
5* Hotels Fine Dining
Boutique Hotels Gastro Pubs
Ancillary
4

5. Every Sub Sector, Every Question Below Target
Each sub sector performs below target in all areas. Too much emphasis on training systems and process. Too little
welcome, warmth, interest and knowledge.
Accommodation businesses only manage a welcome score of 77.68% even with a receptionist.
Being welcome is not defined by saying hello, it is exhibiting behaviours that make people feel welcome!
The Drink-led Sector offers the best perceived value.
Food-led team appear to be trained - but in what? It appears the wrong things.
Restaurant teams are perceived to be better trained - they know how to take orders, serve goods and transact guests yet
lack personality. What is the purpose of your training? Provide systems and processes to aid the team but train knowledge
to instil confidence and release personality. Recognise behaviours that matter!
80
Accommodation
Drink
Food 78
Personality 76
Welcome, Warmth,
Interest, Confidence
Skills
Pace, Training,
74
Knowledge
Reflections
Perceived Value, 72
Willingness to
Recommend Welcome Warmth Interest Confidence Pace Training
70
Knowledge Value Recommend
WANTED: Places that excite and satisfy guest emotional needs!
10

6. I've learned
that people
will forget
what you said,
people will
forget what
you did, but
people will
never forget
how you made
them feel.
Maya Angelou
photo credit: Ben Sutherland
11

7. Accommodation fails to deliver Home from
Home Experiences
Disappointing performance from the Accommodation-led Sector, only 5* Hotels achieve 90% and only for
reflections. Under-performing overall, 5* Hotels benefit from kudos and association rather than the team
behaviours and the experience afforded guests. Guests want to tell people they stayed there despite the
experience rather than because of it.
Boutique Hotels demonstrate how differentiation on design rather than actual guest experience fails to deliver.
3-4* Hotel performance demonstrates why it has shrunk in a sector revolutionised by the development of budget
hotels. While net growth in rooms has been nominal over the last 30 years, the growth in Budget hotels that offer
a better price and a better experience has hastened the demise of the undifferentiated and squeezed mid market
offers.
100
3-4 Star
5 Star
B&B 90
Boutique
Budget
80
Differentiate or die!
Experience is the only
competitive advantage
opportunity for mid 70
market as budget
hotels grow and
improve.
Personality
Skills
Reflections
60
Average Score
Ensure you deliver on experience not just design and kudos!
12

8. “We brought prices down, down, down so they are now
essentially commodities. So if we want to succeed in this
business, we have to move in a direction of adding other
value to the relationship with our clients. And so where I
might have said 15 years ago, 'We want to be the best
discount brokerage,' today I want to be the best
'relationship company' in financial services.”
Charles Schwab
“We have the best customer satisfaction record, based on
Transportation Dept. statistics, of any airline in America, the
fewest complaints filed per 100,000 passengers carried. So
you’re not just getting low fares, you’re also getting
wonderful customer service.”
Herb Kelleher
Price isn’t enough!
Even for successful low-cost operators!
13

9. 5* Hotels Reliant on Kudos and Maslow
5 Star willingness to recommend is excellent but clearly driven by kudos rather than the quality of the experience.
High price provides status and high personal brand value but experiences are formal and often inhospitable.
B&B personality performance eclipses all. Boutique Hotels are welcoming but often disappoint on every other level.
Warmth is the most concerning aspect - reserved, formal, slightly distant or just don’t care prevails.
Guests want warmth & personality - a home from home experience is sadly lacking across the accommodation sector.
Stop processing people and start welcoming guests to your home!
Budget hotels are growing, booking is easy, they are developing the experience and offering far more than a cheap bed.
100
3-4 Star
5 Star 90
B&B
Boutique
Budget
80
What are the
doormen and
receptionists 70
doing?
60
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
Formality is the enemy of warmth and hospitality!
14

10. Be welcoming - AND MEAN IT!
• Let your personality and welcome reach out from beyond the counter.
• Acknowledge queuing guests - let them see you are there and have seen
them
• Make eye contact and Smile - with your eyes as well as your mouth.
• Be first, Be there & Mean it
• Ensure all team members recognise their responsibility to welcome
guests
• Make the section closest to the entrance smaller, providing that team
member the capacity to welcome guests
• Only one host - are you sure?
• Good Afternoon, Hello, Hi, Evening Madam or Howday Dooday - it’s less
about what you say and more about how you say it
Recognise team members that mean it!
15

11. Food-Led Businesses lack personality
Unlike the hotel sector the restaurant industry has “enjoyed” phenomenal growth in guest choice - the competitive
challenge has grown in tough economic times yet price rather than experience has been the approach adopted by
most. Each competitive set delivers experiences below the 90% target. Fine Dining best and only 6.34% adrift.
Over-supply and the challenging economic climate demands competitive advantage.
The consumer needs experiences, they want places to escape, socialise, explore and enjoy, yet the evidence shows
a bewildering choice that fails to excite and engage. In the face of rising prices, debt burdens, static or falling sales
and profit the answer is not to slash costs and cut prices but to engage guests and provide experiences worthy of
recommendation. Discounting is not a long term or strategic solution. The eating-out market fails to deliver and faces
increasing competition from supermarkets and entertainment sources that better meet their experience and value
requirements.
100
Ancillary
Casual Dining
Coffee +
Fast Food 90
Fine Dining
Gastro
80
Ancillary is 19.52%
adrift of earning
recommendations. 70
Personality
Skills
Reflections
60
Average Score
Price is an unsustainable battleground!
16

12. Unrivalled choice but lacking
experience and engagement
Welcome, Warmth, Interest and Knowledge are weakest!
Ancillary where the hospitality provision is secondary e.g. motorway services, theme parks, museums and
supermarkets are the worst performers in almost all areas.
Surprisingly(?) even those with formal host / maitre’d, the welcome is below 90% target level.
70%-89.9% just means ambivalence, it is not at the level (90%) required to develop advocacy!
Fast Food and Coffee+ ‘off the pace’ required by guests and lacking in personality.
Gastros: over-promising on design and marketing but failing to meet guest expectations.
90
75
60
Welcome Warmth Interest Confidence Pace Training Knowledge Value Recommend Average Score
Ancillary Casual Dining Coffee + Fast Food Fine Dining Gastro
In a competitive market - Differentiate on Experience!
17

13. Drink Competitive Sets Illustrate
why there are so many closures!
The Smoking ban effectively turned pubs into restaurants overnight and with the added competition from a rapidly
growing restaurant sector which has benefitted from fresh ideas and investment, pubs have largely lost their place
and their way. Despite an enviable heritage and fondness they have allowed others to steal a march on them and
clearly bring up the rear in the experience stakes.
Once the heart of the community - “the third place” - they now close at a double digit rate every week.
Pubs and Bars - venues for convivial socialising and escape, fail to deliver against all measures but particularly
disappointing and damaging is the lack of personality factors. Most even fail to acknowledge guests at the bar.
Destination pubs are the best performing set but still almost 10% below target.
90
80
70
Personality
Skills
Reflections
60
Average Score
Community Destination High Street
Return to what made pubs the social hub!
18

14. Experience Lite in Pubs and Bars
Destination Pubs perform best against all measures but are they restaurants in disguise developed by restauranteurs?
The drink-led sector looks much worse without the contribution of pubs in destination locations which serve food.
If only... there were only pubs? Competition has grown, needs have changed and a more discerning and affluent society
choose restaurants that fulfil multiple needs, excite and engage them while those pubs stuck in the past struggle on and
close.
A great pint is not enough! A proud heritage - the envy of many nations is diminishing fast. High Street pubs and bars are
being supported by capex fuelled fashionable design - an unsustainable strategy as volumes fall.
90
Community
Destination
High Street
80
Community
Pubs
Welcome @ 70
68.52% is
actually saying
go away!
Welcome Warmth Interest Confidence Pace Training Knowledge
60
Value Recommend Average Score
Pubs need to be the 3rd place again!
19

15. Experience Benchmarks
We have evolving experience metrics for each of the following segments of the Hospitality sector.
Sadly all below the 90% target - the level required for advocacy and recommendation. We are pleased to be helping
one client at a time.
Part 3 considers the performance of the basket of talent which makes up The Eclectic Benchmark. The report will
illustrate clearly the gaps between the average performers (the majority) and the best of the best!
90
85
80
5* Hotels
Fine Dining
Gastro Pubs
B&B’s
75
Destination
Accommodation
Hospitality Sector
Casual Dining
Coffee +
Food Led
Budget Hotels
Boutique
3-4* Hotels
Drink Led
Community
High Street
70
Fast Food
Ancillary
65
Focus teams on consumer metrics that matter!
You have to be better than the rest!
20

16. Insufficiently Welcoming across
the “experience” sector
Contract Catering, Motorway Services, Theme Parks and other ancillarys provide the worst welcome
followed by Community pubs
Only Boutique Hotels provide a level of welcome worthy of note and recommendation
90
85
80
Boutique
75
3-4* Hotels
5* Hotels
Fine Dining
Budget Hotels
B&B’s
Destination
Casual Dining
70
Gastro Pubs
Community
High Street
Fast Food
65
Coffee +
Ancillary
60
Welcome
You wouldn’t fail to greet guests to your home!
21

17. A lack of Warmth across the Sector
Fast Food and Boutique join the underachievers Ancillary and Community.
Fine Dining and Gastro leading the way but all below 90% target.
Caring for, being attentive, listening to, demonstrating enthusiasm and affection or kindness towards guests delivers a
sense of warmth. A simple gift easily bestowed upon guests will provide significant competitive advantage.
Warmth is the key driver of recommendation : 29.7% of guests cited warmth as the key reason for their willingness to
recommend.
90
85
80
75
Fine Dining
B&B’s
Destination
5* Hotels
70
Gastro Pubs
Casual Dining
3-4* Hotels
Budget Hotels
Boutique
Community
65
Coffee +
High Street
Fast Food
Ancillary
60
Warmth
Turn up the heat on operators to demonstrate warmth!
22

18. Show Interest
The worst area : evidence of an inability to demonstrate an interest in the guests themselves and their needs.
An abject performance seriously limits sales and profitability.
Asking questions of the guest about their day, work, recent activities, holidays, shopping exploits etc, not only
demonstrates you are interested in them but it provides the essential sales fuel. Understanding guests facilitates the
best matching of goods, services and an experience to guests encouraging them to return, to bring their friends and
therefore maximise long term sales.
90
85
80
75
Fine Dining
B&B’s
5* Hotels
Gastro Pubs
Destination
70
Boutique
Budget Hotels
Casual Dining
Community
High Street
3-4* Hotels
Coffee +
65
Fast Food
Ancillary
60
Interest
Ask questions - show interest in their needs!
23

19. Emotions Matter
“Fill guests with a burning desire to return and
bring their friends”
24

20. Demonstrate Knowledge
Knowledge is the foundation for confidence and guest interaction. Without knowledge team members will actively
avoid engaging with guests. 5* Hotels are the only competitive set reaching target levels while fine dining is close.
These high-end experiences do not have the exclusive rights to demonstrating knowledge and staffing levels are not
an acceptable excuse. Every team member from every team should share their knowledge PROACTIVELY and build
the guests’ appreciation of your points of differentiation, values and substantiality.
90
85
80
5* Hotels
75
Fine Dining
B&B’s
Gastro Pubs
Destination
70
Casual Dining
3-4* Hotels
Budget Hotels
Community
High Street
Coffee +
65
Fast Food
Ancillary
Boutique
60
Knowledge
Stop training systems and processes!
Develop team member knowledge for competitive advantage!
25

21. Insufficient Perceived Value
The perceived value is insufficient to justify the price in all but the case of 5* Hotels providing competitive advantage
opportunities for alternate forms of entertainment, relaxation, socialising, exploration and emotional need fulfilment.
Price does not define value as demonstrated by 5* hotels.
Perceived value is judged emotionally, subjectively by the individual and on the whole experience - how well the
experience actually met or exceeded the experience they anticipated.
Boutique Hotels prices are clearly deemed unjustified by the experience and 67.5% means these guests are detractors.
High hopes destroyed by the reality are punished dramatically.
5* Hotels benefit from the desire of guests to tell people where they have been staying but trading on kudos alone is
fragile.
Budget and Fast Food offers may have lower initial expectations but this can be an opportunity or a curse.
90
Your marketing indicates a
promise and an expectation 85
which must be delivered!
80
5* Hotels
75
Fine Dining
B&B’s
Destination
Budget Hotels
3-4* Hotels
70
Casual Dining
Gastro Pubs
Fast Food
Coffee +
Community
Ancillary
High Street
65
Boutique
60
Value
The Experience is the justification for price elasticity!
26

22. Guests not inspired to Recommend
Willingness to recommend is a reflection of the whole experience, the emotional value added and the confidence
that it will be replicated if recommended to others.
The experiences being offered are not good enough - they fail to excite. Only 5* Hotels exceed the target level. High
price is not a barrier evidenced by 5*, Fine Dining and Gastros better-than-average performance.
Provide guests with the fuel and confidence to recommend. In the world of social media word spreads faster than
ever before. Every negative is heard by more people and damages not only the errant operator concerned. Trading
on price, design or kudos is fragile lasting only until a competitor who gets it all right comes along.
90
Budget brands have to work
harder to gain recommendation
- its not cool to declare your 85
allegiance to such brands from
5* Hotels
the rooftops.
80
75
Gastro Pubs
Fine Dining
B&B’s
Destination
3-4* Hotels
70
Casual Dining
Budget Hotels
Boutique
Coffee +
High Street
Community
65
Fast Food
Ancillary
60
Willingness to Recommend
87% of experiences fail to generate recommendations!
27

23. Competitive Advantage Quotes
• “An organisation's ability to learn, and translate that learning into action rapidly, is the ultimate
competitive advantage.” - Jack Welch
• “Customer service isn’t just a department” - Tony Hsieh
• “When you’ve got only single-digit market share — and you’re competing with the big boys —
you either differentiate or die.” – Michael Dell
• “Arsenal have won that advantage, nobody gave it to them. By playing fantastic football and by
winning matches and by winning trophies, they won that respect that the opponent has for
them.” - Jose Mourinho
• “Good enough never is. Set your standards so high that even the flaws are considered
excellent.” – Debbi Fields
• “It’s one thing to read about your company, but when a customer can associate it with an
actual person, it creates a deeper, more meaningful connection to the brand.” Tony Hsieh
• “Information is power, particularly when the competition ignores the opportunity to do the
same.” – Mark Cuban
• “A society's competitive advantage will come not from how well its’ schools teach the
multiplication and periodic tables, but from how well they stimulate imagination and creativity.”
- Albert Einstein
• “You do not merely want to be the best of the best. You want to be considered the only ones
who do what you do.” — Jerry Garcia
Make your Customer’s Experiences your Competitive Advantage
28

24. PACE + PERSONALITY = Competitive Advantage
Are you in the business of providing experiences at pace? Ensure your pace meets the expectations of guests - long
queues, no personality - disaster. Fast Food is expected to be just that and queues are detractors unless you
manage the guests’ queue experience. Engage people in the queue: show them you care.
Demonstrate you recognise their pain. Don’t stroll through peak times.
Acknowledge people - Apologise - Give them confidence that you know they are there and that you understand they
have little time to stand in a queue. Perfect solution pace and personality!
90% 90
GAP > 10%
Target
GAP 20% 85
Get faster 80
With personality! 75
70
65
60
Pace Personality
Coffee + Fast Food
Fast Food & Coffee + Be personable at pace!
29

25. Useful Reading
“Those spending the most money are the worst brands.”
“Good is the enemy of great.”
•Drive - Daniel H. Pink “Management is efficiency in climbing the ladder of success;
•The Service Profit Chain - Heskett, Sasser & leadership determines whether the ladder is leaning against the
Schlesinger right wall.”
•The One thing you need to know - Marcus
Buckingham
•The Seven Habits of Highly Effective People
- Stephen R. Covey
•Maverick - Ricardo Semler
•Made in America - Sam Walton
•Purple Cow - Seth Godin
•The Experience Economy - B. Joseph Pine II,
James H. Gilmore
•Gung Ho - Ken Blanchard
•Whale Done - Ken Blanchard
•Funky Business - Kjell Nordstrom & Jonas
Ridderstrale
•Fundamentals - Jim Sullivan
•The Nordstrom Way - Spencer McCarthy
•Good to Great - Jim Collins
•First Break all the Rules - Marcus
Buckingham
•Emotional Branding - Marcus Gobe
You have all the time in the world - make space to read!
30

26. Guests Migrate Faster than Ever
Social Media means that word of mouth now happens at 100
lightning speeds, disgruntled guests no longer tell 8-10 but
potentially thousands direct from their mobile phone.
78.35 74 75
70.33
The bottom 10% demonstrate a Net Promoter Score of -92
meaning almost every guest is a detractor and looking for 50
somewhere better to go or staying in.
Those providing experiences worthy of recommendations 25
must be active on Social Media.
Those failing to grow competitive advantage and advocacy 12.4
must focus on what matters and on delivering experiences. -96
0
Social Media means consumers find new opportunities to Guest -25
satisfy their needs faster than ever before. Migration
Pattern -50
-75
Looking to buy a business?
Why believe the arbitrarily generated goodwill valuation? -100
The P&L a/c accurately describes history not the likelihood of
Net Promoter Score
future sales and profits. Amazon
Apple
Eclectic Benchmark Contributor
Hospitality Sector
Bottom 10%
Deliver experiences and embrace Social Media!
31

27. Going out of business in
blissful ignorance?
In 2012 the speed to extinction of Bottom 10% operations is faster than ever before - thanks to social media, high
debt burdens, poor guest experiences and world class competitors - hastening the inevitable.
Unwelcoming, cold, inhospitable and a perfect recipe for declining sales, profits and closure.
“If you always do what you always did then you will always get what you always got”
If you have a business that delivers against your system and process requirements and yet is suffering declining
sales do not assume its because of current economic conditions. Many businesses are growing.
Measure what guests feel!
60
45
30
15
Welcome
0
Warmth Interest Confidence Pace Training Knowledge Value
Recommend Average Score
P&L a/c’s do not measure future sales potential!
32

28. Conclusions
The average performance of the sector and its sub sets is not made up of
polarised highs and lows. The vast majority of venues are gathered around
the mean. In such markets the opportunity for those who differentiate is
great. Added to this, differentiation in highly competitive markets is crucial
and offers huge rewards to experience-starved consumers.
Hospitality businesses must focus on
experience, not the goods they offer or the
service they provide - rather focus on the
experience they afford time-poor, discerning
guests who long for escape, socialisation and
exploration.
Measure what guests think about you!
33

29. Boutique hotels market a differentiated position promising an experience that is in
demand. Excellent! In many cases the experience fails to live up to the
expectations and aspirations of the guests.
5* hotels are differentiated and appeal to high level emotional needs but kudos
alone is not sustainable - formal is not hospitable.
Budget hotels have developed a successful differentiated offer led by price but are
adding more experience than 3-4* and are winning, squeezing the mid-market
while challenging the old order.
Differentiate on Experience!
34

30. B&Bs owner-led warmth threatens to provide a recipe for success but lacking
follow though across other question areas and the marketing clout of budget
operators
Pace is a basic expectation in the fast food and Coffee + market - work more
efficiently with personality for competitive advantage
Simple requirements such as welcome are missing even from those with host
doormen and receptionists
Measure what matters!
35

31. The restaurant market is highly competitive though very few operators recognise
and take advantage of the experience opportunity
Pubs and bars have a fine history and heritage, they are fondly considered but
have failed to react to the competitive charge that has taken place around them
- they were the 3rd place now they are in 3rd place.
While the goods must meet expectations and the service must be professional
and efficient it is the experience that will attract loyal guests and advocacy
Emotions drive value, engage guests to drive advocacy!
36

32. Its not the burger, pizza, draught ale, bed or spa that develop competitive
advantage, these are replicable by the next new market entrant - it’s the emotions
you develop that define the brand and issues forth advocates, ambivalents,
backbenchers or assassins.
Focus on and consistently deliver the things that matter and are in short supply to
ensure your business stands out in a cluttered and pressurised market
37

33. Be Better!
The current environment is made for standout hospitality
operators who deliver excellent experiences!
38

34. What can we
t 3
a r learn from the
P coming soon....
best of the best?
Why some businesses prosper and others fail
Which businesses are setting the pace - the
Eclectic Benchmark Contributors
Case 1: Knowledge = confidence and growth
Case 2: The power of personality and pace
Case 3: Engaging guests drives promotion
Case 4: Budget Hotels - Better than you
imagined?
Differentiated, better and prospering
39

35. Improve your
Competitive Advantage
Our clients outperform the sector, their sub
sectors and the appropriate competitive set
If you would like to:
Focus the team on what matters
Benchmark your current performance
Improve your guests experiences
Grow advocacy and competitive advantage
We would be delighted to support your guest experience
development.
In our hands the right questions + independent professional mystery
guests enables us to produce pragmatic, operator centric intelligence
reports that drive focus, improved customer service and guest advocacy
david@customerservicebenchmark.com
@davidmchattie | @CSBenchmark
07795813097
40