Why I Dislike Big Hotel Chains . . .

A business that makes nothing but money is a poor kind of business.  -Henry Ford

I happen to be a big fan of standardized processes and consistency as a way of controlling costs and delivering consistent products and services.  McDonalds and KFC are prime examples.  But when policies seem to be designed by accountants to maximize revenue and reduce cost at the expense of building long-term customer loyalty (and repeat business), then I can get pretty irate.

So last week I was in Pune, India, a delightful technology center southeast of Mumbai.  The residents like to think of it as the “Oxford of India” since it is India’s center of education and high technology.

After many great Indian meals during the week I decided to have a semi-western meal and wandered into the brand new Hyatt Regency Hotel just across from one of the technology parks where I had been working all week.  I was looking forward to some quiet music, a friendly barman, a dry martini and a buffet I could graze on.  I was also looking forward to catching up on my emails through the hotel’s wifi system.

I was not a freeloader coming in to sponge off the organization, and although not a registered guest of the hotel, I was going to have a drink and dinner, which should qualify me as a profit-center and not a cost-center.

I opened my iPad2, quickly found a strong hotel wifi signal and tried to check my emails, only to be told by a pop-up window that I either had to be a hotel guest (name and room number required) or I could “easily” purchase a 1-hour or 24-hour access using my credit card.

Knowing my email work would only take a few minutes I called over the bar manager, after ordering the equivalent of a £10 martini, and asked politely that since I would be having a drink and dinner here in the hotel, could I have quick complementary access to the wifi to check my emails.  He smiled and went off to find a senior manager.

The bar manager came back quickly with another smile (well-trained) and a reply that since I was not a hotel guest I could “easily” purchase wifi access for 1-hour or 24-hours ………. (you get the picture). I tried a second time with a different manager.  Again, I could easily purchase . . .

The Hyatt rules and policies of profit maximization just created a significant negative experience for me with the Hyatt brand.  My expectations of a brand that tries hard to cater to the every need of the business traveler were definitely not fulfilled.

And that night I was definitely a profit center since my drinks and buffet dinner, totaled close to £60 ($100).  Definitely not an inexpensive hotel! They made a very good profit off of me that evening, but they also angered me with their rigid and short-sighted policies. Not only will I no longer choose Hyatt if given a choice, but this blog will spread the message far and wide (as most dissatisfied customers do among their circle of friends).

My recurring question to CEOs and senior leaders is:  Are you in business for the short-term, grab all the profit you can?  Or are you in business to build a strong, raving fan base of loyal customers who tell their friends they must frequent your establishment?

Customer loyalty doesn’t have a line item on the balance sheet or the P&L, but it does have a significant impact on your business, positively or negatively.

I can clearly see the business model of the Hyatt Regency in Pune.  It’s evident in their policies.  I doubt if executive management has taken the time to understand how their policies impact customer loyalty and repeat business.  That evening they had the opportunity to make me a repeat customer and reap a continuing stream of profits from a global business traveler.  But the policies said no!

PS:  If you have a similar example of short-term profit maximization at the expense of customer loyalty, send me an email or attach it to this blog posting.

Tight Lines . . .

John R Childress

E | john@johnrchildress.com      T | +44 207 584 3774      M | +44 7833 493 999

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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3 Responses to Why I Dislike Big Hotel Chains . . .

  1. Bill Collins says:

    I hope you forward this to Hyatt. I hope that they would hire your company to look at policies that could be detrimental to Hyatts’ long term success. 100 dollars of business for free wifi access seems like a good trade off in my book! Too much time and thought are put into no-brainers these days as I think most workers are scared for their jobs and will not make simple no-brainer decisions lest they put themselves in harms way.

    Like

  2. You are right Bill. When Gordon Bethune helped turn around Continental Airlines, in just one year, he threw away the rule book and told the desk agents to use their best judgement! Modern businesses are long on management and short on judgement.

    Like

  3. Pingback: Just what is a Luxury Hotel? | John R Childress . . . rethinking leadership

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