The Myth of Service Recovery

For the past several years, there has been a widely circulated notion among many hotel executives that the key to enhancing customer loyalty is a strong problem recovery process. Some claim to possess statistics showing a higher intent to return among guests who experienced a problem followed by excellent resolution, compared to guests who had a problem-free stay. The dangerous conclusion drawn from this belief is that guests don't expect perfection as long as problems are professionally addressed and resolved to the guest's satisfaction. As a result, hotel managers may relax their concerns regarding problem incidence, believing that an effective problem resolution system will redeem guest loyalty.

Maritz has studied thousands of hotel satisfaction surveys, both on the guest and meeting planner sides of the business. As a result of this extensive research, Maritz has found only one circumstance in which guests who experienced a problem showed greater affinity for the hotel than if no problem had occurred in the first place. In all but a select few cases, guests who experience a problem are significantly less satisfied with their experience, less likely to return and less likely to recommend the property, even when service recovery exceeds their expectations.

When guests check into a hotel, especially one that is upscale, they expect a hassle-free stay. Anything other than that represents a negative violation of a positive expectation. Despite this “no-hassle” expectancy, the data shows that one in five guests experience some type of problem during their stay. This percentage is usually significantly higher in large city center-hotels and convention properties.

Generally, on the meeting planner side, one in three planners experience some type of a problem during event planning and execution. Since problems occur at a greater incidence than hotel managers would prefer, it's not surprising they would adopt a focus on fixing problems effectively.

As mentioned earlier, some hotel executives who study customer satisfaction data report seeing higher scores among guests who experienced excellent problem resolution compared to guests who had a problem-free stay. A more typical result is that guests who experience excellent problem resolution provide scores similar to guests who had a hassle-free stay. In either case, the difficulty and cost in providing the type of resolution that produces this result should be enough to convince a hotel executive that a focus on problem resolution isn't the most effective strategy to drive guest loyalty.

Putting all of these issues aside, there's another problem with drawing this type of conclusion from the data. Much of the time, service recovery efforts are not examined in the context of the larger service experience.

Maritz frequently studies items that gauge the proactive elements of service. These represent areas that assess the degree to which the staff has made a positive connection with guests regardless of whether or not a problem has occurred. Such items include:

  • The front desk staff really cared about the quality of my stay

  • The staff treated me as a valued customer throughout my stay

  • The staff anticipated my needs

Maritz has examined the various combinations of strong/weak proactive service along with strong/weak service recovery efforts. Guest satisfaction and loyalty is strongest when there is both strong proactive service and strong service recovery following a problem. This is the one instance in which guests who experienced a problem gave higher ratings of the hotels than guests who had a problem-free stay. However, this combination of strong service on the front end, along with strong recovery efforts on the back end, rarely occurs. Approximately one in 20 guests who experience a problem report this type of service experience. (In the vast majority of problem situations, there is neither good front end service nor strong recovery efforts.)

Several key points should be remembered:

  • It's very difficult to exceed guest expectations in service recovery. Hotels typically exceed guest expectations in problem situations in only one out of ten problem occurrences. Hotels are at least four times more likely to fail to satisfy a guest in recovery efforts than they are to exceed expectations.

  • When hotels resolve problems in a manner that meets, but does not exceed, expectations, satisfaction scores are significantly lower than when an experience is problem-free.

  • The only time satisfaction and loyalty are improved after a problem is when service has been outstanding throughout the entire experience. Outstanding problem resolution is seen as a part of a larger service culture within the hotel, not as a standalone reaction.

  • There is arguably a much greater cost to recovery efforts compared to the type of service that initially bonds a guest or meeting planner to a property.

The purpose of this article is to debunk the conventional wisdom that hotel customers don't really care about problems as long as you effectively resolve them. Except in the rare cases in which a problem occurs in the context of an existing stellar service experience, there is no arguable upside to problem incidence. There are far more effective ways to generate loyalty than after-the-fact heroics in response to a problem occurrence.

Wise hoteliers focus on proactive rather than reactive service strategies as a means to drive guest and meeting planner loyalty to their properties.

Rick Garlick, Ph.D, is director of consulting and strategic implementation for Maritz Research.

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