Hotel Real Estate News

Hotel Real Estate News

As hotel guests increasingly come to expect amenities that used to be special perks, such as free Wi-Fi, complimentary breakfasts and premium bed linens, the industry may be reaching a customer satisfaction plateau, according to the J.D. Power 2016 North America Hotel Guest Satisfaction Index Study,SM released today.

The study, now in its 20th year, measures overall guest satisfaction across eight hotel segments: luxury; upper upscale; upscale; upper midscale; midscale; economy/budget; upper extended stay; and extended stay. Seven key measures are examined in each segment to determine overall satisfaction: reservation; check-in/check-out; guest room; food & beverage; hotel services; hotel facilities; and cost & fees. Satisfaction is calculated on a 1,000-point scale.

Although overall satisfaction has improved for a fourth consecutive year, increasing by 2 points from 2015 to average 806, this represents a much smaller increase than in recent years. In past years, strong improvements in cost & fees played a key role in improving satisfaction overall. While satisfaction with cost & fees improved by 25 points between 2014 and 2015, this year it has improved by only 1 point.

“Customers have responded well to the enhanced offerings provided by some hotel brands to create value, but as those perks become standard, customers are quick to ask, ‘What have you done for me lately?'” said Rick Garlick, global travel and hospitality practice lead at J.D. Power. “When guests no longer see added value in the quality of amenities they receive, the only option to truly differentiate a brand is to develop a strong service culture that makes guests feel special and appreciated.”

Interestingly, while satisfaction in most segments has remained flat, the luxury segment has improved by 12 points overall. Much of this improvement is attributed to a 20-point improvement in cost & fees.

“Despite luxury hotels typically being the most expensive, this segment has been able to show guests that they’re providing additional value, which is clearly resonating,” said Garlick.

The study also finds that while satisfaction is higher among members of hotel rewards programs than among non-members, younger guests are less likely to be members than older guests. Only 39% of Gen Y guests belong to a rewards program, compared with 56% of Gen X and 66% of Boomer guests.1 In every generational group, customer satisfaction is significantly higher among guests who are rewards program members.

“We’re finding that every succeeding generation seems to be less likely to be a member of a hotel rewards program than the one before,” said Garlick. “As we’ve seen across numerous industries that J.D. Power tracks, younger guests in particular are especially driven by the value proposition, underscoring the importance for hotel brands to make a stronger case for the benefits of loyalty to these travellers.”

Following are some of the key findings of the study:

  • Online/Mobile check-in: Only 3% of guests take advantage of online or mobile check-in, though check-in/check-out satisfaction is highest among these guests than among those who used any other method.
  • Most important amenities: The three most important amenities cited by guests are free Wi-Fi, breakfast and parking. In terms of hotels providing these amenities, 71% of guests say they received complimentary Wi-Fi; 56% received complimentary breakfast; and 61% received free parking. Luxurious bedding and linens, the fourth-most important amenity, is becoming increasingly important; however, only 37% of guests say this was offered in their room.
  • Social media feedback: Among guests who posted something about their stay on social media, 75% of the posts were positive, compared with 13% that were negative. Overall satisfaction is 40 points higher among guests who post comments to social media.

Hotel Segment Rankings

The following hotel brands rank highest in guest satisfaction in their respective segments:

  • Luxury: The Ritz-Carlton (for a second consecutive year)
  • Upper Upscale: Omni Hotels & Resorts (for a second consecutive year)
  • Upscale: Hilton Garden Inn
  • Upper Midscale: Drury Hotels (for 11 consecutive years2)
  • Midscale: Wingate by Wyndham (for a second consecutive year)
  • Economy/Budget: Microtel Inn & Suites by Wyndham (for a fourth consecutive year)
  • Upper Extended Stay: Hyatt House
  • Extended Stay: Home2 Suites by Hilton

Notably, The Ritz-Carlton earns the highest score in the history of the study at 896.

The 2016 North America Hotel Guest Satisfaction Index Study is based on responses gathered between June 2015 and May 2016 from more than 63,000 guests in Canada and the United States who stayed at a hotel in North America between May 2015 and May 2016.

Overall Customer Satisfaction Index Scores

J.D. Power.com Power Circle Ratings

(Based on a 1,000-point scale)

For Consumers

Luxury Segment

   The Ritz-Carlton

896

5

   Four Seasons Hotels and Resorts

882

4

   JW Marriott

874

4

   Waldorf Astoria Hotels & Resorts

869

3

   Luxury Average

869

3

   Loews Hotels & Resorts

865

3

   Fairmont Hotels & Resorts

860

2

   InterContinental Hotels & Resorts

856

2

   W Hotels

852

2

   Grand Hyatt

851

2

Included in this segment but not ranked due to small sample size are Andaz, Belmond, Mandarin Oriental, Park Hyatt, Sofitel, St. Regis Hotels & Resorts, The Luxury Collection, Thompson Hotels, Trump Hotel Collection and Viceroy Hotels & Resorts

Upper Upscale Segment

   Omni Hotels & Resorts

856

5

   Kimpton Hotels

855

5

   Hyatt

852

5

   Renaissance Hotels

849

4

   Marriott Hotels & Resorts

845

4

   Embassy Suites Hotels

844

4

   Hilton Hotels & Resorts

840

3

   Hyatt Regency

840

3

   Wyndham Hotels and Resorts

839

3

   Upper Upscale Average

838

3

   Westin Hotels & Resorts

832

3

   Delta Hotels and Resorts

817

2

   Sheraton Hotels & Resorts

810

2

Upscale Segment

   Hilton Garden Inn

844

5

   SpringHill Suites

843

5

   Hyatt Place

839

4

   Courtyard

836

3

   Upscale Average

833

3

   DoubleTree by Hilton

831

3

   Coast Hotels & Resorts

823

2

   Hotel Indigo

820

2

   Crowne Plaza Hotels & Resorts

818

2

   Radisson

818

2

   Aloft

812

2

   Four Points by Sheraton

809

2

Upper Midscale Segment

   Drury Hotels

871

5

   Hampton Inn/Suites

849

4

   Fairfield Inn & Suites

834

4

   Holiday Inn Express

828

3

   Upper Midscale Average

824

3

   Holiday Inn

820

3

   Comfort Suites

817

3

   Best Western Plus

814

3

   Country Inns & Suites

814

3

   Wyndham Garden

799

2

   Comfort Inn

791

2

   Ramada Plaza

787

2

   Clarion

784

2

Midscale Segment

   Wingate by Wyndham

834

5

   AmericInn

819

4

   Baymont Inn & Suites

815

4

   Best Western

804

4

   La Quinta Inns & Suites

804

4

   Sleep Inn

799

4

   Midscale Average

792

3

   Red Lion

773

2

   Quality

769

2

   Ramada

765

2

Economy/Budget Segment

   Microtel Inn & Suites by Wyndham

779

5

   Americas Best Value Inn

756

4

   Days Inn

744

4

   Super 8

736

3

   Red Roof Inn

732

3

   Econo Lodge

730

3

   Economy/Budget Average

727

3

   Howard Johnson

720

3

   Travelodge

719

3

   Motel 6

694

2

   Knights Inn

689

2

   Rodeway Inn

674

2

Upper Extended Stay Segment

   Hyatt House

856

5

   Residence Inn

844

3

   Staybridge Suites

844

3

   Upper Extended Stay Average

844

3

   Homewood Suites by Hilton

843

3

Extended Stay Segment

   Home2 Suites by Hilton

863

5

   TownePlace Suites

836

4

   Candlewood Suites

824

4

   Hawthorn Suites by Wyndham

808

4

   Extended Stay Average

775

3

   Extended StayAmerica

730

3

Included in this segment but not ranked due to small sample size are InTown Suites, Studio 6 Extended Stay, Suburban Extended Stay and Value Place/WoodSpring Suites

For more information about the 2016 North America Hotel Guest Satisfaction Index Study, visit http://www.jdpower.com/resource/jd-power-north-america-hotel-guest-satisfaction-index-study.

See the online press release at
http://www.jdpower.com/press-releases/jd-power-2016-north-america-hotel-guest-satisfaction-index-study

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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