There has been a lot of discussion about the Choice Hotels/Expedia issue, and I’d like to lend some rational thoughts toward what has happened thus far, and what the future implications might be.

In an effort to be fair and balanced, let’s first remember that Expedia exists for the sole purpose of making decisions that increase shareholder value. Expedia profits rose 23% in the last quarter as a result of cutting fees and introducing promotions, so somebody over there is doing something right, at least for the short term.

Let’s also not forget that Expedia is popular with consumers because of what it does for them: it makes it easier to shop for and compare flights, hotels, and rental cars. Most consumers aren’t familiar with the term “OTA”, let alone the relationship between OTAs and hotels. As long as their hotel room is ready for them when they arrive, they don’t care who it was booked through. OTAs are a convenience, if you’re a consumer. A lot of people aren’t hotel snobs—they just want a nice/affordable/conveniently-located/etc. room, depending on the particular circumstance of a particular trip.

So, while the hotel industry might want to consider Expedia to be Goliath and Choice Hotels the David during this skirmish, that perspective really depends on whose side of the fence you’ve invested in. The Expedia/Choice negotiations had reportedly been taking place since 2007, and finally broke down. As I understand it, Choice Hotels wanted franchisees to control their inventory, while Expedia wanted more control than Choice was willing to give.

You can’t blame Expedia for asking for whatever it was they asked for. If you were on the other side of the fence, you might have done the same. As much as hoteliers want to paint it as such, this wasn’t about stealing profits or putting hotels out of business. There is certainly evidence of OTAs having a negative effect on ADR and hotel profits on the whole, due to the way they’ve changed the hotel shopping habits of now price-centered consumers, but remember: nothing made hotels participate in OTAs, other than the pressure they felt to do so by their own industry. We might consider OTAs as “necessary evils”, kind of like unions and lawsuits and other things that might annoy us during a given moment.

I have a tremendous amount of respect for Choice sticking up for themselves in the negotiations, but it’s not as if they had much of a choice; the alternative would have been making franchisees upset or ultimately harming their own business if the costs ended up greater than the benefits. Does this mean other hotels should end their relationships with OTAs? Not out of principle, unless they too determine it’s no longer in their interest to continue the relationship. Expedia better be careful out there, since their value as an OTA decreases when they no longer have as diverse of a selection of services to offer. There is life after OTAs, but there’s life after each individual hotel as well–nobody is completely safe.

Frankly, I’m surprised we’re all so surprised by this. It is (and was) unrealistic to think a static relationship would remain between hotels and OTAs. Something had to break eventually. While OTAs and hotels have enjoyed a mostly symbiotic relationship, it’s been shown to have the potential to turn antagonistic in the past, and this is no different. It’ll be interesting to see how this plays out over the long-term in terms of the effects on brands as a whole, and the short-term in terms of profits. For now, Choice might need Expedia more than Expedia needs Choice, but it’s not impossible for the tables to eventually turn.

What do you think?

Tomorrow I’ll talk about the study that came out of Cornell last week about the effect of being listed on Expedia on reservations coming directly to the hotel. There was an interesting result.

Remember, in your business, “everything speaks”.

This is what a resort guest saw when first arriving at their room at a highly-regarded vacation resort, whose name it would be ungracious of me to mention here:

(The guests' room was the one on the left.)

It seems unnecessary to ask “what’s wrong with this picture?” The more important question is, “What does this say to a newly-arrived guest?”

Remember, all across your business, as speaker and author Dennis Snow is fond of reminding his audiences, “Everything speaks”. This concept is a good one, and it means that every part of your business—your facilities, your employees, your processes, your website—all “speak” to your guests.

• Garbage and dirty towels outside a room says “We didn’t expect your arrival yet”, or even worse, “We didn’t care that you were arriving.”
• Staff unable to answer a guest’s question, or find an answer, says “I don’t care if you get an answer or not.”

In fact, so many businesses send the “I don’t care” message to guests; it’s the rule rather than the exception. As I’ve written before, a sure-fire way to get people to talk about your business with their friends is to give them a bad experience. If you give them a so-so experience, they’ll forget about it. If you do something to “wow” your customers, you’ve increased the chance they’ll talk about you again.

Just as easily as everything in your business can speak in a negative way, the positives speak too:

• When your staff treats each guest as an individual, respects their children, is knowledgeable, and looks for deeper meaning in questions, that speaks.
• When your facility is “opening-day” (or “company-executive-visiting-day”) clean, your facility speaks.

I could go on with other examples, but your time would be better spent reminding your team of this concept and spending some time listening to what your business is saying. Leaders–this is best done working alongside your employees and experiencing your business as a guest. When we become familiar with what happens in our operations, we don’t often let them speak to us, but be assured your entire operation is speaking to your guests every minute of every day.

Just remember, everything speaks, and your guests can hear it all loud and clear.

The eye of the storm.

There has already been a lot of discussion surrounding the Erin Andrews hotel peephole incident, but I wanted to pull together a few thoughts on what this means for the hotel business in a larger sense.

Earlier today, Adam Kirby wrote about a “hidden camera” news-tainment program that put two hotels to the test to see if there was any resistance from hotel staff when a guest asked for a room next to a specific guest. The short story is that it was easy to request a room next to another guest, and the guest wasn’t notified of the request.

My guess is that viewers watching the program were appalled by what they saw, unable to understand why there wasn’t some policy in place to prevent the request from going through so easily. I’ll give you two  possible reasons: 1) friction in the system, which delayed orders coming from the management or, 2) general apathy caused by the frontline employee thinking to himself “There won’t be a problem this time, right here, right now.” Having been in a frontline position, I couldn’t blame him. Some policies take a greater toll on the frontline staff who have to execute each day them than on the guests themselves. It becomes tiring.

Let me first say that the safety of guests (and staff) should be a #1 priority in both how staff are trained and how facilities are maintained. “Safety is the most important thing we do,” a manager of mine told me once. We all need to learn some lessons from this peephole incident.

For example:

• Frontline staff should be trained in how they are permitted to grant specific room-location requests. There should be consequences for not following the proper processes. Consequences have a way of turning new policies into habits very quickly.
• Leaders should consider whether or not “peephole covers” might be installed in rooms in the near future. Certainly the United States should learn from Europe in this respect.

That being said, there’s another side to this, too. Like the millions of flights that take-off and land without incident for every one that has trouble, millions of people around the world stay in hotels each day without incident. Ultimately, there are probably other safety priorities in many hotels equally or more important than anything to do with peepholes. But, popular opinion moves boulders, and here we are.

As they say, “Behind every regulation is a dead soldier.” Likewise, behind every customer service policy is dishonesty, a complaint, a security issue, or something else.  Guests hate new policies because now, suddenly, when they want a room next to their friend they need to go through a hassle, er I mean, process. As Karl Prohaska wrote earlier this week, the phrase “That’s our policy” is “rapidly becoming the ‘up yours’ of a new generation.” There’s always a policy, and there are more of them all the time.

Am I the only one who can see how this will play out?

Guest: “I’d like a room next to my brother, John Smith. He arrived last night.”
Front Desk:  ”Sure, let me call his room and check to make sure he knows you.”

- 15 seconds later -

Front Desk: “He’s not answering his room phone, but we can wait to assign a room until he is able to come down to the desk, if you’d like.”
Guest: “All I want is a room near my brother.”
Front Desk: “I’m sorry Sir, that’s our policy’

So here we are; a new policy that will frustrate 100,000 guests for every 1 it helps. But, the same thing happens every time we take off our shoe in the airport. Safety trumps all, and we have a “like-it-or-not” responsibility to uphold what is ultimately the right thing to do, for the sake of our guests.

None of us want to look back on a tragic accident and know we could have done something to prevent it.

One of the biggest challenges for frontline employees is constantly remembering to treat each guest as a very important, very individual person. One of the greatest responsibilities of frontline leaders is to make sure this happens.

Last summer, the wife of one of our park managers mentioned she had recently spoken with a staff member at our property. She felt she should be friendly and introduce herself, so mentioned that her husband was the park’s manager. The employee immediately responded, “Oh, if I had known that I would have been nicer to you.”

I wish I made that story up, but the truth is that behavior like that is really the rule rather than the exception. As Steve Curtin discussed in a recent article, frontline employees come into contact with customers frequently, but rarely come into contact with company executives or leaders. As a result, these “VIPs” are considered to be more important than ordinary customers, and service quality improves in their presence. When VIPs are around, you won’t see employees smoking, texting on their phones, or complaining about their jobs, as Curtin mentioned in a great article titled, “The Emporer is Naked!”

I really believe that the performance of employees in any business is a direct reflection of the company’s management and higher leadership. Any executive not visiting her businesses in casual clothing is not fulfilling her responsibility, and any manager not modeling and enforcing quality service isn’t doing his job. Both of these are leadership responsibilities. Let’s be honest: when your customer satisfaction scores are down, you can’t blame it on anyone but yourself if your job is to manage the operation. If you’re an executive and your scores are down, you’ve fallen short as well. (Dramatic leaps in service should, of course, be credited to frontline employees.  That is just how this works.)

As someone who has worked in frontline roles, I know how difficult this is to do day in and day out. It’s 100 times more difficult when you feel like people around you aren’t giving an effort either, and this is why leadership needs to create a culture in which anything other than exceptional service is considered a crime.

I’ll end by adding how surprised I am to meet people in frontline positions who “hate customers” or “hate people” or some variation on that theme. There are plenty of technical and support roles without any guest interaction, especially in the hospitality business. These roles are no less important than those on the frontline. It’s possible to work on the frontlines without liking it, but you must be able to at least pretend you like it. Why put yourself through that? Find the job that’s best for you and ultimately best for the company.

Developing employees is a never ending challenge, but guests won’t soon forget the  great experiences they have as they’re interacting with you. And, you won’t forget it either.

Starbucks released its instant coffee a few weeks ago, after nearly 20 years of research and development. There’s a lesson in there for all of us on the importance of working at things until they’re done correctly.

The launch of a Starbucks product into the $20 billon global instant coffee market was considered a success by company leaders, who claimed that even most baristas were unable to tell the difference between the instant and brew in taste tests. 20 years of careful development averted the potentially destructive fallout if the product had failed to meet expectations.

While most of us would like to see our new concepts launched sooner than 20 years from now, this example from Starbucks highlights the importance of taking the time to do things the right way. Remember, there are two kinds of decisions: reversible and non-reversible. Reversible decisions are easy to change if they don’t end up working-out, because the overall investment in them is negligible. Conversely, non-reversible decisions require substantial investment (of time and money) and really need to be executed correctly the first time around.

Are you involved with making non-reversible decisions in your business? If your business isn’t making enough of them, you’re probably leaving too much on the table. Like Starbucks—and Apple, and Microsoft—we should all be working on secret projects in the back room, thinking of ways to grow our businesses and improve our guests’ experiences. We need to execute these with discretion, making sure we’ve taken the time necessary to do things right. And remember: it all starts with an idea, and those ideas can come just as easily from a line cook in the kitchen or a housekeeper on the 10th floor. Depending on the magnitude of the idea, leaders need to determine if it is worthwhile, and how much planning it will require.

The business world is full of examples of companies that reached outside of their niches and failed.  Those that have succeeded have something in common: a commitment to investing the resources necessary to do things right.

Calorie counts on here?

The journal “Health Affairs” published the results of a recent study in which calorie counts were posted on the menu boards of McDonald’s, Wendy’s, Burger King and Kentucky Fried Chicken restaurants in a poor area of New York City. (The research was conducted before the July, 2008 law requiring quick-service chains in NYC to post this information.)

28 percent of those who noticed calorie counts on the menu board said the information had influenced their ordering, with 90% of those saying they had made healthier choices as a result. However, the most shocking result was that, after checking receipts, researchers found that people ordered food containing more calories when the calorie counts were posted on menu boards than they did without the calories posted. In other words, knowing calories did not result in healthier food choices.

Let’s hope requiring calorie counts on menu boards isn’t an upcoming trend. I know that 1/3 of Americans are obese, with negative consequences on the quality of life for millions of people, not to speak of the additional health care costs. (Speaking of health care, research has shown that, for example, reducing sodium consumption could help save millions of lives every year.) This being said, I believe there are several reasons why calorie counts have no place on menu boards and inside table menus. Restaurants like Wendy’s have pulled together their perspective on this too.

Consider these points.

• Aesthetically speaking, menu boards are crowded for space as it is. Adding hundreds of new numerical digits to the boards will only make this worse and make them harder to read.
• Calorie counts paint an incomplete picture of the food item’s health value. Are sodium, saturated fats, or fiber content next to go onto the menu board? Where do we draw the line?
• This isn’t necessarily a negative and may even be a positive, but having calorie counts could have an impact on menu pricing. Do we start charging more for the higher-calorie items, because we can? Do we charge less for the lower-calorie items to keep supply and demand in equilibrium? Will this just compound the problem?
• Most restaurant guests know when they’re eating something healthy and when they’re not. Most just don’t care. In fact, anytime I step into a McDonald’s, whether I get the 6-piece nuggets or the Big Mac, I know I’m not on a low-calorie diet. Does it matter if the count is 457 or 321 calories?
• What if I skip the mayo? What if I add catsup, and what if I don’t? If  a base salad is 150 calories, but adding a certain dressing and/or topping can bring it up to 700 calories, how is that denoted on the menu board? There are too many variables to make this accurate.
• Restaurants—especially those at vacation destinations—are escapes from the real world. Do we want our guests to be bombarded with calorie information every time they visit a quick-service restaurant?
• Finally, this has been shown to be just plain ineffective, at least in one study. More research is needed before this is implemented globally.

Anybody curious about nutritional information on food items at fast food restaurants can go online or ask the restaurant, and it will be given to them. Let’s continue to provide our customers will menu options that will allow them to consume a healthy diet, but let’s not go over the top with ridiculous mandates.

It's not yet "too late" for a lot of employees in your business.

The Substance Abuse and Mental Health Services Administration recently conducted a study which found that approximately 44 percent of full-time workers aged 18 to 64 in the food preparation and serving-related occupations had smoked during the past month. Nation’s Restaurant News put together a nice summary of the study here. I encourage you to read it.

We’re all well-aware of the dangers of smoking, and I’m sure many of you, like me, have watched loved ones suffer a slow and painful death as a result of their smoking habits. My grandma quit smoking the day she learned how it had seriously compromised her health, but it was too late.

Studies like this should remind us all of the opportunity–if not the responsibility–hospitality leaders have in promoting healthy lifestyles.  It’s not yet “too late” for a lot of employees in your business.

Take some time, and ask yourself:

1. Does my business regularly provide support and programs for employees looking to quit smoking?
2. Does my business provide opportunities for employees to exercise on the property (if the property is large enough) or provide discounted access to a local health club?
3. Does my property’s work environment allow for employees to breathe clean air, both while they work and while they’re on breaks?
4. Does the business’ leadership team set a positive example by living a healthy lifestyle themselves?
5. Do you use memos, newsletters, and pre-shift meetings to remind your employees the benefits of a healthy lifestyle, both in terms of work satisfaction and satisfaction at home?
6. Do you remind your team that if they’re not going to live a healthy and responsible lifestyle for themselves, they should live one for those in their lives that care about them?

This is truly one of those areas where you can make a difference, and where people will come back to you in 5, 10, 20, or 40 years and thank you for what you did for them.

If you hire the right people, they’ll bring you ideas to improve your business.

During the middle of the 19th century, British observers noticed a stark contrast between the American and British workforces. The British, learning through trade apprenticeships, were less likely to experiment with new manufacturing methods than Americans, who were spending increasing amounts of time in school. As a result, remarked John Saywer, “every American workman seemed to be continually devising some new thing to assist him in his work.”

As the old saying goes, “The more things change, the more they stay the same.” Businesses—and the hospitality industry is no exception—have a lot to gain when recruiting employees with differing educational backgrounds and experiences.

Recruiting employees from different talent pools is the first step. The second is giving them the freedom to make suggestions and do things in different ways. During any recession, including the most recent, hospitality businesses have asked employees for ideas on how to cut down on costs without sacrificing guest experiences. Any hospitality leader could provide a list of 20 (or more) things that her business has done in the past year or two to cut costs. Chances are, some of these ideas came from employees because they were asked.

Do you have processes in place for gathering feedback from employees? Some possible methods include:

• Boxes for anonymous suggestions to be dropped into.
• Confidential email submission forms and confidential phone numbers for leaders, which employees can use to provide feedback anonymously.
• Regular meetings with frontline staff.
• Working alongside frontline employees as they do their jobs.

You’re paying your employees part of their salary for their opinions, so go ahead and ask them using one or all of the methods above. In return you’ll get an increase in loyalty, commitment, and performance.

I was reading recently in USA Today how, in light of recent economic challenges, NFL teams have abandoned their “take it or leave it” attitude toward fans and are instead making an effort to recruit new ticket buyers by running promotions, allowing fans to purchase tickets on layaway, and offering all-you-can-eat seating sections in their stadiums.

Even the country’s most popular sports league has recognized that they need to go the extra mile to give their fans better experiences. NFL Comissioner Roger Goodell noted that teams are trying to be as “accommodating as possible” and “work harder, be more creative and more responsive, understand what our customers are going through, and work harder to sell those tickets, sell our sponsorships, and sell our products.”

Andy Dolich, 49ers chief operating officer, added, “I’m not saying teams didn’t listen in years past. I just think they’re listening a heck of a lot more. The worst thing anybody can do in business is to lose sight of their customer — in our case, the fan. You can never, ever take those people for granted.”

Has your business gone through this wake-up call? Some companies have always been great at putting the customer first. The Walt Disney World Resort has a long-standing world-class reputation. When you go with brands like BMW and Waldorf Astoria, you know you’re in for something great. How do your customers feel about you?

• Do you make them feel special every time they visit you?
• Do you give them great experiences, and tell them that you hope they’ll come again?
• Have you implemented new programs based on their suggestions?
• Have you found ways to reward loyal customers?
• Are you keeping up with industry trends so you’re not falling behind? (Yes, two kids can eat free with one adult meal purchase at Boston Market.)

Business improvement and development is a process, not a destination. Remember: you’re never as good as you think you are.

In an article this week, USA Today interviewed Kraft Foods CEO Irene Rosenfeld. When asked which of the company’s new core values had the most drastic effect on the improvement of her business, she said that “encouraging all employees to act like owners” had been the most successful.

“Everyone understands what it means to own a business. You spend money like it is your own, you make sure you’re getting a return on your investment, you treat people like you would like to be treated…”

Getting employees to behave like owners is a great goal for any business. It’ll influence not only the way they spend money, but also the way they interact with your guests. As Seth Godin pointed out this week:

Given the choice between acknowledging that your customer is upset or proving to her that she is wrong, which will you choose?
You can be right or you can have empathy.
You can’t do both.

If you’re acting like it’s your business, you have no interest in being right sake for the sake of being right. Your interest is in treating each customer like a cherished friend.

This is one reason I’m interested to see what comes of the plans for privatization of operations traditionally run by the government; New Orleans Armstrong International Airport and Milwaukee County Zoo are both on the track toward privatization. Is it possible that we will see privately-owned airports being run with higher standards than those operated by the government? Will investors turn up the heat, install the best leaders, and get the entire team to begin thinking like owners? There is a lot of money at stake, there is no doubt.

Of course, getting your team to think like owners begins with treating them like owners. Show plenty of respect and appreciation, and you’re more likely to get it back.