Modern hospitality consumer preferences and expectations

¶ … Hospitality Consumer

What Does the Modern Hospitality Consumer Want?

Technological advances over the past decade have had a big impact on business in the hospitality industry. A more global economy and the increasing prominence of the Internet as a business tool have fueled the trend towards commoditisation in virtually every industry. This had led to a decline in prices in many goods and services, with a similar decline in profit margins. The modern hospitality consumer has rebelled against this trend by increasingly demanding an experience as a fundamental part of the transaction.

In many industries, the rise to prominence of information technology has facilitated this trend toward commodisation. This refers to an increasing similarity in goods provided that are selected by the consumer based on value for money. "Differentiation disappears, margins fall through the floor, and customers buy solely on the basis of price, price, price." (Pine & Gilmore, 1999). Interestingly, in the hospitality industry, this same technology is used to increase the differentiation for the consumer.

The exponential increase in information available to a hospitality goods or service provider allows the product to be tailored to the individual. More and more, modern hospitality consumers are demanding this individual attention, whether in the tourism, hotel, or food service sector. Olsen and Connolly (2000) refer to this phenomenon as the market segment of one:

As a result of the segment-of-one thinking, hospitality firms will shift away from competing via traditional methods such as pricing, location, and amenities to a knowledge-based mode. The most successful competitors will collect and synthesize information about their customers' buying patterns and convert this knowledge to a highly personal level of service.

This is what the modern hospitality consumer wants: a level of service that rises to the definition of experience, where the transaction is not only fulfilling to the consumer, it is memorable.

Pine and Gilmore (1999) talk about a goods-service-experience continuum. Whereas a good provides a very tangible offering, services offer intangibles. Experiences go beyond intangible to provide memories.

An example of this move toward a consumer experience is the rise in popularity of specialty coffee houses. International companies such as Starbucks have built their success on selling the experience of the coffee to the consumer. The Starbucks patron pays for more than simply the cost of beans, grinding and brewing when he purchases a coffee from Starbucks. The rather hefty value-added in the price of the cappuccino is the ambiance that accompanies the purchase. Customers are paying for the smell of the coffee, the worldbeat music, the look of the glass-filled containers of espresso beans.