ROI of investing in guest service delivery

GLOBAL REPORT – The tangible aspects of any lodging asset are easy to value—the real estate, physical structures, grounds, FF&E, and amenities—and make estimating return on these investments a fairly straight forward process. However, many owners and operators neglect to consider the incredible impact exceptional guest service can have on bottom-line profitability.

Over the years, I have worked with the world’s most respected organizations who audit, score, and award their coveted stars and diamonds to hotels and resorts around the globe. As you’re likely aware, all have stringent standards and expectations that properties must meet to pass and win these prestigious rankings and awards. While these are highly valuable to the asset, we all know that even possessing a slight percentage over the comp set’s ranking on travel booking and review sites can deliver meaningful competitive advantage in ADR and occupancy. As such, I find it interesting that owners will invest millions of dollars in upgrading their common areas and guest rooms, or adding new amenities, food and beverage offerings, or unique pop-up outlets, but do not make meaningful investments in the staff who deliver the all-important service to their guests.

Why do I find this interesting? Because most organizations that audit and score hotels and resorts only put an emphasis on 25% to 35% of the facilities. As such, even if these areas get top marks, you still won’t be eligible for those coveted top award ratings (usually 5-stars or diamonds). It will also be significantly more challenging to grow your online ratings.

Place a greater emphasis on your trainers. Decide how to select these individuals, how to compensate them for their time and efforts, and give them tools and resources to greatly influence the learning of each newly hired staff member.

Jason Raimondi

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If you’re an owner, I ask that you seriously consider making a significant investment in your staff in 2025. After all, you hold them accountable to consistently provide the best guest service possible. Perhaps you should give them the tools and training to win for you. I know that you firmly believe your service delivery levels are already better than your competitors. I’ve heard it a million times. But make no mistake, the 70% emphasis placed on service standards, not only by the auditors but also by your guest, is where the biggest potential impact lies on your P&L. “The service is terrible, but I really like the marble floors so I will definitely be back,” said no guest ever. Service is the single greatest opportunity to increase your ADR and occupancy, and can even affect your food and beverage prices.

In the simplest of terms, service is measured through quality and value, which is common knowledge. However, we still seem to assume that value is achieved through the tangible items and facility aspects of the asset. Without sounding like a broken record, as an industry we need to shift gears and start placing more focus, time, and money on our most important asset, our service professionals. I believe owners have a huge paradigm shift to make as to where they spend their yearly budgets. I can absolutely say that the vast majority of hotel executives are exceptional at building their annual budget with regard to their facilities; this cannot and should not change. But we absolutely must place more emphasis on the annual budget for developing and empowering the people delivering our service.

Two excellent places to provide continuous development within your hotel are with your line-level leaders and hourly service professionals. Each group needs the focus on service standards and expectations, but the approach and objectives are quite different.

For hourly staff, the most critical area lands with how much time and money is invested in their onboarding. We consistently demand that our staff offer exceptional levels of service to our guests such as name usage, thoughtful gestures, showing care and interest, and curating bespoke moments throughout their stay. This exact same approach should be used when welcoming and onboarding new team members. Gone are the days of a 90-day probationary period. Newly hired service professionals will leave in less than 14 days if they are not welcomed with extraordinary onboarding experiences. Hotels do an excellent job at teaching staff the technical skills of the role as well as brand policies and procedures. Unfortunately, this is not where guests find value.

Challenge these leaders to schedule daily time to observe their team’s engagement with guests, ensuring that immediate praise and feedback is provided. Require leaders to hold staff accountable for service standards, instead of focusing only on company policies.

Jason Raimondi

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The piece we need to invest much greater amounts of time, energy and money, is solely around service standards and expectations. In most cases, there are hundreds of steps-of-service required to provide the most memorable experiences for guests. But this is also where hotels spend the least amount of time training and continuously developing their staff.

A quick fix is to put service standards and knowledge at the forefront of onboarding. Teach this first and let the technical skills and policies fall into place naturally. Additionally, place a greater emphasis on your trainers. Decide how to select these individuals, how to compensate them for their time and efforts, and give them tools and resources to greatly influence the learning of each newly hired staff member.

For the front-line leaders in your hotel, challenge them to place much more emphasis on their knowledge of the service standards. I have never met a hotel leader who could not rattle off their financials. but rarely do they know the required steps-of-service that their team is expected to provide to guests.

The way to remedy this is to put those standards out front as often as possible. Challenge these leaders to schedule daily time to observe their team’s engagement with guests, ensuring that immediate praise and feedback is provided. Require leaders to hold staff accountable for service standards, instead of focusing only on company policies.

It would also be an incredible consideration to have a percentage of your leaders’ annual reviews tied directly to staff development or service standards knowledge. If you want the culture at your hotel to be that of exceptional service, then it has to be discussed constantly and consistently.

In my experience, the value of exceptional service truly has no ceiling. Ensuring that our service professionals are recruited with precision, welcomed and on board with warmth, provided with on-the-job training that is memorable and supportive, continuously developing their skillsets to show them how much we value their allegiance to the hotel, and ensuring that there are growth opportunities within the hotel (or brand) is paramount.

When done correctly, this approach will create some of the best top performers a company could ask for. The service that these individuals will offer and provide to guests is priceless, and in return, you will gain many more repeat guests, who are happy to pay top dollar for those service experiences again. They will also take the time to recommend them to others.

But to accomplish the above, I suggest you consider investing in your team and their ability to consistently deliver the best possible service experience to your guests. If Michelin, Forbes Travel Guide, LQA, AAA, CCA, and others have determined that service is the most important aspect of hospitality, then perhaps we need to take those concepts to heart and place that same level of emphasis on our individual hotels and resorts.

Contributed by Jason Raimondi, Managing Director, Horwath HTL, Orlando, Florida

The views and opinions expressed in this content do not necessarily reflect the opinions of Hotel Investment Today by Northstar or Northstar Travel Group and its affiliated companies.