Behind the Scenes Insights from J.D. Power's Hotel Satisfaction Study - Andrea Stokes, JD Power

Josiah: 0:00

What are guests asking for today and how might trends and guest satisfaction affect the way that you provide hospitality? Stick around to learn more, because our guest today is the author of one of the most comprehensive studies done this year on this topic. Andrea Stokes is the practice lead for hospitality at JD Power and in this episode, you'll learn about her career journey and research and why this matters, how JD Power has evolved its research methodologies and then what they learned in their recent study and its implications for you. The reason we wanted to connect is to talk through the results of the JD Power 2023 North America Hotel Guest Satisfaction Index study and maybe just to set the stage. I wonder if we could talk for a few moments about your own background, because you have focused on research and customer experience throughout your career. How did you get started in this and take us through that journey of your career in this space?

Andrea: 1:18

Sure, thank you for having me. So I've worked in consumer research for many years, starting out at a very small company in Minnesota where I'm originally from, and started out really doing more CPG work. So companies like Procter & Gamble and the Campbell Soup Company really had a good experience in the industry. Market research is fascinating. I did not start out thinking this would be my career. Of course not many people do kind of start out thinking their first job is their only job. But it was a great experience and I was there for several years and I went to business school and after I left business school I did find a great position at the US Travel Association. So I had done some travel work at my previous job but when I joined the US Travel Association as director of research really really got to learn the travel industry and the tourism industry in and out, worked with airlines, the big hospitality and hotel companies, tourism providers, destination marketing organizations so it was a great role. I really learned a lot. I credit everyone I worked with at the USTA at the time with sort of really giving me a love of the industry. And after that, I went over to a company called Cinevate which ended up being purchased by Ipsos, but I was the vice president of the travel and leisure practice there for many, many years and, of course, working directly with companies across the travel industry airlines, cruise lines, you know hotel companies, et cetera to help them understand the consumer, help them understand their target markets, help them not only improve their messaging and branding but also improve the customer experience. So that's really where I started doing more in-depth customer experience work at Ipsos. So then I went to Marriott. I was at Marriott in their insights department for several years and had a great experience there, and then I ended up at JD Power in 2019, you know, right before the pandemic hit, but it was still. You know, JD Power was very committed to the travel industry and had been working in the industry for many, many years. So they were committed. You know, the industry, we know, was decimated during the pandemic, but we continued to do the work at JD Power that we normally did and we just wanted to serve the industry in the difficult times. So we were able to, I think, provide insights that everyone was looking for during that time. But, of course, travel is back and our clients and subscribers are very interested in what the guest, the hotel guest has to say in particular. Well, I wanted to get into that.

Josiah: 4:25

I do want to ask, though - I'm very curious you've worked for these businesses and organizations that serve the industry at large, whether it's travel, whether it's hospitality. What was it like working within Marriott? I'm curious, what kind of differences did you find working within an organization, obviously with many brands and a very large organization, but how did that feel, and what were the differences there versus working in your current role, for example?

Andrea: 4:50

Yeah, well, it's a big company and I never really worked for such a big company and it was a great experience. The Insights Group we covered all brands. We were sort of an internal service organization. So if someone had a business question that they wanted answered, we were the go-to team internally for any brands, or the loyalty program team or any other team really could come to us and say, hey, I need some insights, I need perhaps it was a survey or some other, maybe secondary research that we needed to do in order to help answer business questions in the organization. So we had a great leader of our team and she's still there. But it was a really great experience just to learn. And, of course, I learned a lot about hospitality in the industry overall. I mean that while I had worked for hospitality clients before but you know, of course, being in Mary, you really learn a lot about the ins and outs of the industry. You know the ins and outs of real estate because, in a sense, the hotel industry is about real estate. So it was good, it was a great, great experience. So I had a chance to come over to JD Power to lead the hospitality practice. So it was a it was a leadership role that I was really excited for and, yeah, have been here ever since.

Josiah: 6:24

You definitely see different things in-house, but there also is a unique perspective you see, when you're able to work across companies right, and so I think there are benefits to both, but awesome to see you kind of in this role that you are. Now let's talk a little bit about the guest satisfaction index study. I want to get into the details of it but at a very high level. Why do you do this study?

Andrea: 6:45

Sure. Well, this study has been in place for 27 years at JD Power. Not a lot of people know that, so I am certainly not the first to be at the helm of the hospitality work at JD Power. The study, of course, has had to adapt over time as the industry has changed, as the consumer has changed right over time. So there are, you know, there have been a lot of changes along the way. When I came in, the study had just gone through a big update. It was fairly, you know, new. I think there were a lot of new insights that the study was providing at the time. And again, every few years, we do not only we in the travel practice at JD Power but also other practices we do have to update our studies every few years to keep up with the consumer, keep up with the market, keep up with the industry and stay relevant. So we just recently for 2023, did another major update coming out of the pandemic. We thought it was a good time to, you know, look back at the last four years. We had a four-year trend. We were asking guests the same questions and the same survey for four years. So it was a good time to make some updates.

Josiah: 8:04

So but I do want to get into the methodology there. But you mentioned earlier your clients are asking for this. Your clients are these brands, right? They want to know what is going on in the industry. Is that right? And they want to see how are we doing? How are others doing? Is that sort of the idea behind this?

Andrea: 8:22

Yeah, that's right. We you know the study, we have a lot of benchmarks and we cover a lot of brands, right, and we cover all of the segments from luxury on down to economy, right? And so our subscribers are the portfolios, the large portfolios, and smaller hotel companies that we cover who want those benchmarks. They want to benchmark against their competitors in the segment, but also against you know, what we say is the segment average, right? They want to make sure that at least they're sort of keeping up operationally with anything guest-facing in the hotel, that they're keeping up with their competitors in the segment, and also sort of of the average. So it's great because we have, you know, data over time. We know how the brands are performing generally over time. But there are changes, of course, every year and brands really do look to the study to sort of say, hey, where can we improve? What can you know? If we aren't performing as well in this area, where, how can we improve? What impact will that have on our overall guest satisfaction? And so we provide a lot of that sort of deep dive information for each of the brands that subscribe to the study.

Josiah: 9:44

So I wonder if you could talk to me a little bit about the importance of benchmarking, because I've talked to some and they say you know, hey, I want to start with a blank canvas. I don't. I want to ignore my competitors, as it were, and I just want to create right and I want to imagine a good experience. You've seen this from many different angles, including in-house at Marriott. In your view, why, why does benchmarking matter? Why should, why should hospitality providers think about this?

Andrea: 10:11

Well, we at JD Power are about benchmarking and we still feel it's important because you have to. You know, you as a company, you have to have a goal, you have to have some, you have to have some numbers right behind that goal to say, hey, here's where we are, here's where we want to be, this is how we're going to get there. And we feel like, at least for the hospitality industry, our study is a great way to do that and provide and provide a very high-level view. But it's a view of your key competition in the industry or in your particular segment, and you can not only see your performance within our study but the performance of other companies right, and what they're doing well, and you know obviously, what you're doing well is important. But we do provide all of the data to our subscribers. So not only for their own brands, but for the entire, for the entire industry, and all of the brands recover. So I think that's the value and where our subscribers are getting the value, our study is very operational, so it does provide very you know hands-on ways to improve your housekeeping or guest service. Maybe you need to do better at maintenance in within the hotel. So, as I said, it's sort of you know provides very operational metrics that hotels can actually take away and say, yes, we can work on this tomorrow and try to improve.

Josiah: 11:47

Right, so it gives insights for action. A lot of people in the hospitality daily community work at brands right, and many participants in the hospitality ecosystems are franchise organizations. You mentioned earlier that hospitality is, in many respects, a real estate business, and so the objective of many of these organizations is to demonstrate to real estate owners and investors here's what we can bring as a brand, as a set of experiences, as an operate or for management company selling their services and I found often that's where benchmarking comes in is to tell that almost that sales story Is that what you see among your clients as well?

Andrea: 12:24

Yes, we have a lot of conversations with development teams who are trying to help franchisees build hotels from the ground up or maybe convert hotels or just operate their hotels on a day-to-day basis right. So our study does definitely provide a lot of information there, mainly, I think, around standards and the importance of standards in some segments. Not, you know, obviously in segments like luxury you have a lot of boutique brands and lifestyle brands that maybe are not necessarily following standards as sort of a brand like Hampton Inn would or, you know, a Courtyard would, for example. But it definitely presents an opportunity for brand teams to tell owners and operators, hey, we have this data, we have standards. This, in a way, the JD Power study, kind of provides us with a view of, hey, how are our owners adhering to standards or not, and how they can do better with that. Because we, from our study, we know consistency is important. Standards are still important in the industry, they're important to the guest. So there is a story, I think, to tell there around how brand teams can work with operators and owners on that side of things.

Josiah: 13:53

I think this is an important story to tell because I spent a lot of time around the lifestyle hospitality space, but that is not the entirety of the industry or the opportunity, and I think maybe a good segue into that would be talking about how you do this study. I do want to get into what you found, but just you know, to this point you know, does consistency not matter anymore? Talk to me a little bit about how you do this study. I guess the kind of core methodology, and then you also mentioned some updates. But I guess that the core methodology I think you referenced earlier in your surveying guests. Is that right?

Andrea: 14:25

That's right. So we are out there 24-7, 365, collecting guest feedback. We launched our new year. It's an annual study, a 12-month study, and we launch it in June every year and we operate it through the following May, so it's a 12-month period. We ask guests about hotel stays in the past 30 days, so this is a very recent hotel stay experience for them. We make sure that they have stayed in a branded hotel. We do not cover independents, but we do ask the guest did you stay in a hotel in the past 30 days. If they did, we asked them if it was a brand and which brand, and we actually asked them which property they stayed in, so we know at the property level what hotel, what exact property, they stayed in.

Josiah: 15:17

Where do you get these people? Is it from? Do you get the list from the brand? We do not.

Andrea: 15:22

We do not. So we fund the study upfront. We do not get a guest list from any of the companies. We work with consumer panel providers. So if you're familiar with survey panels that have been out there for decades, consumers sign up to take surveys with these companies and we have long-term partnerships with these companies who have consumers that are willing to take surveys. So that's the basis for where we find the guests. But, as I said, we are out there every day amongst our panel providers asking their members if they stayed in a hotel recently. So it's important to have that recency right because if you're talking about your stay and you're rating this day, you want that recency in your memory. And then we ask about everything from the guest room, the hotel facility, food and beverage, and staff service, we have communication and connectivity, which includes Wi-Fi service in the hotel, and then value for money. So we do have that value for money perception that we collect, which kind of gives us a lot of that in and of itself kind of gives us a lot of information about the stay itself. So we ask all of those areas and then we feed it into our index model. So if you see JD Power scores, it's an index score and we do calculate it on a 1000-point scale and basically, that translates into performance overall, from the overall satisfaction standpoint. But then also we have, you know, satisfaction with the guest room, an index for food and beverage. We have an index score for staff service, for example, right, and so those index scores are really the traditional way. JD Power reports the results.

Josiah: 17:21

I appreciate you going into the details of this. I spent most of my career actually in guest satisfaction, measurement of online feedback, online reviews, social reviews, survey stuff like that, and I think both, in my view, are very, very important because what is public, everybody is saying. But what I'm hearing from you is a sort of independence, a sort of kind of unsolicited here's what did you think about these brands, these properties, and so I imagine those listening need to be tracking it all. But am I thinking about this correctly where you are augmenting kind of the view of guest satisfaction by a whole different methodology? That's right, and how you're collecting this.

Andrea: 17:58

You're exactly right, and we are a third party, we are unbiased and, as I said, we fund the study upfront. Whether the company subscribed to the study or not, we will conduct the study and we funded ourselves that's how we can maintain our third-party independence, and JD Power is very committed to that, just as a company. Overall, we conduct over 100 companies, I think, in a given year for many different industries. So there is a process right that we have to follow to kind of make sure that the hotel study is maintaining JD Power standards and maintaining that JD Power third party, unbiased view.

Josiah: 18:43

Awesome. The last kind of question on this would be just I wonder if you could tell me a little bit about the changes that you made. You talked about the traveler always evolving and you did a big refresh to meet those new expectations or those new needs. What did that include?

Andrea: 18:58

Yes, While we still, of course, ask about the table stakes, like the guest room and food and beverage staff service, for example. We kind of looked at what was going on in the industry. We added some interesting questions around it in a couple of areas. One is the lobby and the common areas of the hotel. With a lot of remote workers out there, either working from hotels or maybe traveling more than they normally would because they're now remote and they need to get out there and see their manager, their teams. We felt like there was more interest in hotel lobbies. Of course, the industry was also looking at this, saying how can we make our lobby more attractive to remote workers? How can we get people out of their guest rooms and down into the common spaces of the hotel, whether it's to work or socialize or whatever? We added some questions about perceptions of the lobby. Is it warm and inviting? Is it modern? Is it unique? Those kinds of things. Interestingly, actually, those came up as fairly impactful on the overall guest experience. We were surprised at that once we saw the results, because when we put the question in the survey it was 12 months ago and we really didn't know what results we would see. That's one example, as I mentioned connectivity, of course, we asked about Wi-Fi in the past and we asked about USB ports in the guest room. We've added some questions more around the usage of apps, not only apps for booking, but really usage of the app during the stay, and whether the app is being used to communicate with the staff or make a request or check-in, check out. Use the app as your room key.

Josiah: 21:00

Are they? I'm so curious because everybody's talking about this. Are people using this, or what did you find?

Andrea: 21:04

Yes, yes, not all guests actually have the app, but that number, of course, is growing every year. We know hotels are also increasing the capabilities of apps. Maybe a few years ago you really didn't have the capability to communicate with the staff member via the app, but now you do. As a guest, you could maybe use the app to request housekeeping or make a request for room service or whatever. We wanted to make sure we were still capturing that trend. It's still growing. Again, it's not 100%, but more and more guests will have the app for the hotel at which they're staying. Then one last area that was brand new to the study asked about EV charging. We know hotels are looking at putting in EV chargers. Not a lot of hotels do this right now or have done this, but we know owners and operators are thinking about sustainability and they're thinking about the environment and thinking about maybe the possibilities of EV charging actually attracting more guests to the property, specifically because there is a charger there. We're collecting that. Now we're asking the guests did you use an EV charger at the hotel? Did you pay for it or was it free? Was it being offered for free? I know owners and operators are wondering hey, should we charge for this or how much should we charge? Of course, it's a small percentage right now. Not many consumers own EVs in the grand scheme of things, but it's set to grow. We wanted to start tracking this right now. Those were interesting results, as well, that was interesting.

Josiah: 22:54

I feel like obviously in a new area you have to create that baseline that you can then track every year, I guess. Just on that point of EV chargers, did you get a sense of people being they'd be choosing a hotel because it had EV charging?

Andrea: 23:09

Yeah, we do ask the question about why guests choose a particular property beyond location and price. We know those are important. We asked the question beyond location and price, why did you choose this hotel? Services and amenities do come up, and EV charging would be under that bucket. Many consumers are looking for a property specifically because it has a pool or a fitness center or EV charging, for example. Of course, many people choose because they belong to the loyalty program and they want to stay in the program, or they choose because they've stayed there before. Past. Experience is very important. It's one of the top reasons usually that guests will choose a specific property, especially when you are looking at more luxury hotels and upper-upscale hotels where there are more resorts, and you have more resorts that people go back to year after year.

Josiah: 24:09

Which seems to underline the importance of the guest experience. Right, because you have to. If they don't have a good experience, they're not going to come back, but if they do, you have this opportunity to retain them, and repeat customers are always the cheapest form of customer acquisition. Exactly, that's up to you in mind. It's interesting though, the loyalty program, because I think, depending on whom I talk to, they're either like this is a massive, important driver of business, or they talk about loyalty in the typical traditional way, being basically bribery, but it seems like it is still an important factor today. Yes, that's what the data is showing. It is.

Andrea: 24:45

It is, and especially if you have status within the program, it's even more. You tend to stay within the program even more because you're perhaps an elite member, and of course, we do have those types of guests in our study we have usually. I would say around 60% of the guests that we have in the study are loyalty program members. Many are not, because they simply don't want to feel like they have to stay with the same brands year after year or trip after trip. Right, they do want perhaps more variety. Some are booking through OTAs. Maybe they don't feel the loyalty program is something for them and doesn't feel it gives good value, and they look to OTAs maybe for something else, right, for maybe they think they're getting a better value there. So we do not screen out those who book with OTAs because they're guests, they're in the hotels day after day. So we want to make sure we capture their feedback as well. But I will say it's about 50% 60% that have a membership in at least one program. We know could be members of many programs, but we do track that.

Josiah: 26:09

That's great. One thing that stood out to me from the study was the role of the teams, and the people, in providing guest experience. I wonder if you could speak a little bit about what you discovered in this most recent study on that.

Andrea: 26:22

Yeah. So while we made some changes, it's difficult for us to compare year after year, but we really see staff service as perhaps a little bit more important this year. The guest room, of course, is always table stakes, and the scores when it comes to guest rooms are always very important to the brands, but we did see staff service kind of become a little bit more noticed by guests. I think it's because there are more workers in hotels than there were last year or even two years ago. Coming out of the pandemic, hiring has been a challenge, but every month when the Bureau of Labor Statistics comes out with hiring reports, leisure and hospitality is always positive, so adding jobs month after month after month. So I think that's now becoming apparent to the guests that perhaps they are getting better service during their stay. There are more staff working at the hotels and so that's a definite positive. That's definitely where we wanted to see things go after the really horrible years that we had during the pandemic.

Josiah: 27:35

So that's interesting because I was curious about, okay, if we went through the pandemic where their guest expectations reset. But if I'm hearing you correctly, there was actually, as these hotel companies have been adding staff, you see a positive relationship there with guest satisfaction. So we still need to be thinking about hiring and obviously, there's going to be a disparity between some companies, but the companies that are able to hire good people that provide great service. That's being reflected in their customer satisfaction.

Andrea: 28:06

That's right. That's right, and I know there's a lot of talk about technology and you don't need to go to the front desk. You can check in on the app and you can skip the front desk and all of that. But what we find is, even if you check in with the app, you're still going to the front desk at the hotel during your stay, maybe not to check in, but maybe for information or help or whatever. Right, so the importance of technology can't be understated, but that in-person service, that's what hospitality is all about, and that really kind of came out this year in our study, which, again, we didn't expect. But it's good news that the consumer still values face-to-face service and they know good service when they see it, and I think that's really kind of one of the interesting results from this year's study.

Josiah: 29:01

This might be a little bit hard to answer but I guess, breathing between the lines here you hear a lot about a lot of talk about technology and hospitality and I sometimes wonder if the hype cycle has kind of exceeded what consumers actually want, what guests want in our properties. Was your sense that the people is playing a bigger factor than the technology?

Andrea: 29:23

I think that's one of the lessons from this year's results. Maybe it's a chicken and the egg thing there are more staff working, so guests are more aware of staff around the hotel. They're able to contact someone perhaps easier. Maybe it's easier to get a faster response to a question or make a request and get that request serviced by the staff. So it could be that, but it just shows that it's still very important. But we also capture what guests what are sort of those need to have amenities in the guest room. Right, smart TVs. We've been tracking TVs for a while, but the past few years smart TVs have really become the need to have amenity. Everyone wants to watch their streaming services while they're traveling, so it's very important. It's kind of risen in terms of guests saying, hey, yeah, we need to have a smart TV. So we've been tracking that for a few years and we're still tracking that now. But that's one of the things that sort of popped up after the pandemic, I think. Things like having a view or a balcony or ways for, I think, hotels that can maybe upsell. We provide a lot of that information. It's clear what guests want and, hey, if your property has smart TVs or has balconies or a view that you can offer guests. It really is a chance to use that to make money and to get revenue from the different services and offerings that you have.

Josiah: 31:12

I don't know if your study is constructed this way, but do you have a sense of which elements of the guest experience have the biggest impact on overall satisfaction?

Andrea: 31:22

Well, again this year it's staff service. But the guest room of course is very important. We do measure housekeeping, for example, and cleanliness. It's always important. It's a table stake that hasn't gone away and we of course provide benchmarks there. But we also have benchmarks around the physical building and maintenance. And coming out of the pandemic we know a lot of owners and operators maybe put off capital investments. They put off maintenance and those results kind of came through our study in 22 last year. That seems to have improved a little bit. We know hotels are now able to hire staff to do the day-to-day maintenance. But the guests are noticing that perhaps hotels are being renovated or guest room furnishings are being updated, and bathroom fixtures are being updated. So I will say that's probably not 100% back after the pandemic but we think now the industry is making money again and owners and operators can maybe invest in some of these things going forward.

Josiah: 32:44

That's great. You've spoken to, I think, a number of areas where hospitality providers can focus, based on the research, based on what consumers are looking for. I guess, before we go, is there anything else that we haven't talked about in terms of actions you recommend our listeners take based on what you found in this research?

Andrea: 33:04

Definitely the table stakes. Sometimes, with technology and the shiny new thing that's out there, sometimes we might be getting away from what the table stakes are for guests. Guest rooms are still extremely important, especially when you're talking about midscale hotels or maybe upper midscale or even economy hotels, where really the property doesn't have a lot of amenities, it doesn't really have a lot of staff. So the guest room is very, very important there and that's what guests are looking for, and perhaps food and beverage. We haven't talked a lot about that yet, but we are still capturing things like the quality of the food and variety of food and variety of menu items and sort of what they're offering. And I think, coming out of the pandemic when there was a complete lack of food and beverage in hotels and now coming back, there are higher expectations there of what guests are looking for. I think some of the challenges around supply chain issues and hopefully I think those are past us now and guests can I'm sorry hotel operators can get the food items that guests want, but it's important, I think, definitely important for operators to keep listening to your guests, if anything. We know that at JB Power, but we know that the large hotel companies and small companies do their own guest surveys. We don't need to replace that, because we know companies need to be out there every day capturing feedback and to keep doing that. That's very important and that's really where the actual properties can get real-time feedback and actually make changes, act on that feedback to improve the guest experience.