The story of the hotel that turns away money (and why it matters)

On a recent business trip, I saw something which really opened my eyes, and I couldn’t wait to share it with you.

 

Imagine the scene:  It’s 8pm on a Sunday evening in the foyer of a central London hotel.  The hotel is part of a mid-size national chain, and they offer discounts for booking online.  It’s not a particularly grand hotel, but it’s functional, and it’s in a great location.   I’d checked in and I was wandering up to my room when something caught my attention.  I paused and looked back at reception, and in doing so, I overheard a rather intriguing dialogue.

 

It all started when an animated and happy couple of Australian tourists bounced up to reception:

 

“Hi, we’re visiting London for 2 nights whilst we travel around the UK. We’d like to stay here. Do you have any vacancies today?”

 

The receptionist replied with a short, sharp “Yes” – much to the delight of the visitors.

 

“OK, great.  We don’t have a reservation — so can we book a room please?”

 

The receptionist responded, without missing a beat.

 

“Well… yes.  But…. And I’m really, really sorry about this sir, you’ll have to call through to our centralised booking phone line.  Here’s the number.  You’re welcome to stay in the foyer while you do this.”

 

The (potential) customer paused and looked shocked. He replied “I only have my Australian mobile phone – with roaming charges it’ll cost me a fortune to call through to that number.  Can’t you do anything else to help?”

 

“No, sorry sir, I can’t. It’s a centralised procedure, and I don’t have access to the booking system.   You can use our CyberCafe computers to book a room via our website (Although, I’m afraid you’ll be charged £1 for 10 minutes to do that)”.  The receptionist seemed downright embarrassed – and I can understand why.

 

I was pretty shocked too – here we had a situation where a hotel had vacancies.  A customer wanted to buy a room.  But the receptionist wasn’t empowered to sell the room!  Crazy.

 

In situations like this often people will blame the receptionist.  And yes, there is probably more the receptionist could have done – she could have called the centralised reservation line for the customer.  However, the root cause of this anomaly was the underlying process.  Clearly, this organisation had decided to centralise their entire booking facility – presumably to save money – but in doing so had disempowered their front-line staff who have to come face-to-face with customers on a daily basis.  I wonder how many people simply walk out – how many hotel rooms they don’t sell because of this decision?

 

There’s a perennial debate over the benefits of centralisation vs decentralisation – and clearly there are advantages and disadvantages of both approaches.  However, one aspect that should be kept in mind when making these decisions is customer experience.   Organisations that are considering centralisation (particularly growing mid-size businesses) should ensure that this aspect is taken into account and forms part of their decision making process.   Problems like this can be resolved with forethought and by providing the systems and processes that empower front-line staff to help customers – even if the process is actually orchestrated from a centralised back-office facility.    In addition, it can be extremely useful to regularly collate feedback – from customers and staff – on where problems are occurring and use analytics and insight to “tweak” and iterate your processes.

 

In summary: Pursuing lower costs is understandable – but it is ill-advised to throw out customer experience in the process!

 

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This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.