The select-service business model must deliver a quality product at an affordable cost so La Quinta listens closely to give customers exactly what they want, without going one step - or dollar - beyond.
Editor’s Note: This interview is part of Skift’s CEO interview series. This particular series is with hospitality CEOs talking about the Future of the Guest Experience and the evolving expectations and demands of hotel guests. Check out all the interviews as they come out here. Also, enjoy the previous series on the Future of Travel Booking, with online travel CEOs.
La Quinta Inns & Suites has had a busy year. After raising $650 million in its initial U.S. share sale in April, the hotel brand rolled out new products that allow guests to select their arrival time and receive a text when their room is ready, introduced a new prototype that incorporates smart design and smaller spaces, and refocused its marketing efforts to attract business travelers.
La Quinta’s few-frills business model is also becoming increasingly attractive to U.S. lodging investors who are drawn to the lower operating costs and high returns at select-service brands.
La Quinta CEO Wayne Goldberg, who has been in his position since 2006, started his hospitality career at Red Roof Inns and has an astute view of the select-service market and hotel industry. An edited version of our interview with Goldberg is below.
Skift: What are the biggest challenges you are facing to improve the guest experience today?
Wayne Goldberg: I think, for anyone, the biggest challenge in meeting the guest expectation and experience is to really understand what your consumer wants from you. For any company or brand to make decisions, I think you really need to make sure that you’re getting the right insight directly from the consumer. People ask me all the time, “What does your consumer want from you? What does La Quinta stand for?”
I know exactly what my consumer wants from me. We speak to our consumers all the time. We’ve done an awful lot of work on the brand and we have been very strategic in making sure that the things we are doing delivers exactly what our consumers told us they want.
There’s three words that describe what our consumer wants from us, that we focus on every day. I know that our consumer wants to be assured. They want to know the moment they pull in the parking lot that they made the right decision. These are their words, not mine. They want to be able to get into their room and they want to settle in. They want it to be their space, not mine, and they don’t want it cluttered with our propaganda.
We’ve taken these learnings and these lessons from what the consumer wants from us and we implemented changes in the way we execute. For example, the way we market to the guest today in the guest room is dramatically different than the way we did many years ago.
We no longer put large amounts of marketing material in the room. Today, all we put in the guest room is a little card called “Ready for You,” which is our branded customer experience, and it’s signed by the housekeeper so you know that your room is ready for you. There’s also one very small marketing piece for guests to enroll in the frequency program if they choose.
The last thing that we learned was that while our consumers make it very clear that travel is hectic, they are generally optimistic about the unknown day approaching. We took those learnings and launched our marketing campaign “Wake Up on the Bright Side.” We decided that we were going to be the brand that owned optimism. Our goal is to be the bright spot at the end of that traveler’s hectic experience. Wake up on the bright side has become a real powerful way to engage our consumer and drive loyalty and engagement through differentiation.
Skift: Are there any unexpected shifts you’ve seen in guest expectations over the past couple of years?
Goldberg: I think the biggest thing that’s changed is that it used to be about giving technology to the consumer. There was a time where hotels were putting DVD players and fax machines in guest rooms and figuring out how to give all this technology to the guest. What’s really changed is that today it isn’t about giving the guest the technology. Today it’s about giving the guest the capability of leveraging all of the technology that they’re traveling with.
For example, we’ve created a platform by which our guest can use our television as a plug-and-play capability. You can plug in your laptop or iPad and use the television as a monitor. You’ve got to make sure you have enough outlets for your guests to be able to plug everything they need to plug in to and charge.
Wi-Fi is another great example. We changed our minimum bandwidth standards from a minimum of six megs of bandwidth to a minimum of 50 and then up to 100 megs of bandwidth. The guest have told us, and they have made it very clear, that they want to stream video and use multiple devices. In our segment, in our space, bandwidth and high-speed are always free and we have found a way to do this in a way that gives the guest what they expect, what they have mandated, and still being able to afford to deliver it free.
Skift: Technology is clearly playing a role in improving the guest experience. Do you see consumer-facing or back-end technology as more important or effective at improving the guest experience?
Goldberg: They’re both very important. What I will tell you is that, to me, it’s all about differentiation and figuring out how to do things differently from our competitors. A room is a room is a room and our segment has become more of a commoditized type business.
For example, on the back-end, we no longer put phone switches at the hotels and we haven’t put a phone switch in a hotel in over five years. We started experimenting with technology way ahead of our industry and our space and learned that you don’t lose any functionality. We put the service on the voice in the cloud, so to speak. Customers have absolutely no idea that there’s not a phone switch because it doesn’t impact them.
On the front-end, there’s our mobile platform. Guests told us that when they’re on a mobile device that they want it to be easy. They want to be able to engage in a very quick, simple manner. We designed our mobile platform with that in mind so LQ.com on a smartphone or tablet will bring users directly to the platform.
We’ve also done it with ‘Ready for You,’ a platform by which customers on desktop can choose their own arrival time and whether they want to be alerted that the room is ready via email or text. We’ve seen a very, very high success rate of folks opting into this program in a very short period of time. It’s about, again, continuing to listen to the customer.
Skift: How has the hiring experience changed or evolved to match these changes, both in guest demand and how your trying to respond to that?
Goldberg: We’ve embarked on a little bit of a different strategy over the last few years in which we have really leveraged outsourced partners for a lot of our functionality and capabilities from a technology standpoint. We are not the technology experts. We went away from building the technology and having proprietary code to really managing outsourced relationships today.
Rather than building something that’s big and clunky and expensive, we outsource things to the right partners, manage those relationships, and now have a more scalable business than beforehand. We can grow and double and triple the size of the company without having to add large amounts of infrastructure. We have technology on tap.
We have also created a whole new security function here and recently hired a Chief Security Officer to make certain that we’re doing all of the right things to combat cyber security and protect our guests and their information from these folks that are out there. We have engaged a number of outsourced partners and created a whole organization to make sure that we’re doing everything in our power to be ahead of the cyber thieves. From a cyber security standpoint, we’re trying to make sure we’re at the forefront and cutting edge of doing everything and more to be ahead of the game.
I think it’s even bigger than we realize, particularly when we start talking about things like accessing a guest room with a credit card. We don’t store guest data on a key card for a guest room, but if you’re using a credit card then there is guest information on that credit card. As technology evolves and these processes become more commonplace, there’s a lot more security ramifications that need to be thought through and what they mean for guests’ security and safety.
Skift: What are your views on the increase in fees levied against guests in the hospitality industry?
Goldberg: My views are very simple. I’ve been in this business for a long time. We are in the select-serve space and I believe that if I have to start looking for ancillary ways to drive revenue and profitability because I can’t do it through the room, the price of the room, then I am, in some respects, in the wrong business. Ninety eight percent of all our revenue comes from the sale of a room. It is a very simple business model. We will continue to keep it a very simple business model. I do not believe that fees are the right ways to drive revenue. I think that they are problematic when it comes to guest experience.
There is a reason that the airline industry gets the kind of guest satisfaction scores they get and I think that it’s a shame if we start seeing the hotel industry start embark on the same types of experiences. But I don’t see that taking place in our industry. I’ve actually seen the full-service guys even looking at the select-service models in the mid-scale space and say, “If they can deliver it to the guest then we’ve got to figure out how to do the same thing.”
It’s always amazing to me that the select-serve, mid-scale market that we give it away. Whether it’s breakfast or high-speed Internet, our full-service competitors are still nickel-and-diming guests for every different service.
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Photo credit: La Quinta Inn & Suites Wayne Goldberg. Ernst & Young