How The World's Best Hotels Deliver Exceptional Service - Ryan Mann, McKinsey & Company

Josiah: How do the world's best hotels deliver extraordinary service, and what can we learn from them? Joining us today to answer that question is Ryan Mann, who leads McKinsey's hospitality practice and co-authored an excellent research-driven article on this topic recently. You can find that in the show notes, but keep listening to learn how to cultivate a culture of excellence in your teams, misconceptions about the role of technology, how to reinvent your hospitality business to delight your guests, and much more. This is Hospitality Daily, the show that helps you stay informed and inspired each day by the most interesting people in hospitality. My name is Josiah McKenzie, and my goal is to help you reconnect with why you work in this industry and get fired up to go out there, delight others, and reach your goals. Let's get started.

Ryan: So the research started from a pretty simple observation. You know, anyone I would talk to in the hotel industry and ask them, you know, what truly moves the needle on performance for a hotel? They always told me consistently that a great GM makes all the difference. And the question I had was, well, what specifically do the best GMs in the world do? So, we kicked off some research to answer that question. And we interviewed a dozen or so GMs from, frankly, our favorite hotels around the world. So think about brands like Park Hyatt, Amman, Four Seasons, Shangri-La, Six Senses, and then a bunch of independents as well. We spent some time with each of those GMs and asked them what they do that sets them apart from everyone else. And what we found is that it's all about the experience, not just the product. The best GMs create cultures in their hotels that magically blend, anticipating guest needs, exceeding their expectations, creating cherished memories, and frankly, making it all seem seamless. I loved how one of the GMs that we talked to put it, they said, our facilities, our stage, and guests are paying for performance. I thought that was great. I also loved how we consistently heard this theme of the GM as chief culture officer. You know, the best GMs listen to their staff. They make sure they're heard. They role model the bar, and they hire based on personality, not resume. And they also focus in areas that you might not expect. So, another key quote that stuck with me that I love, one of the GMs said, I'm fanatical about doormen because they're the first people that guests interact with when they arrive and the last people they interact with as they depart. I just love that.

Josiah: It's so good. And it's good for our listeners because I feel a lot of travel and hospitality industry media focuses on the physical buildings. And of course, we all love beautiful hotels, new hotels. If you can create those, fantastic. Go do it. It makes the world a beautiful place. But many people are working in places where you don't have that opportunity to totally redesign or reinvent the physical building, right? And so this seems to be an opportunity for all of our listeners, regardless of the brand or the company that they're working with, to be that head of culture and really think about how do you deliver an exceptional customer experience, right?

Ryan: Absolutely. I mean, I think the biggest takeaway for me from the research is that true luxury It's a lot less about the price point or the fancy finishes. It's really mostly about what we call exquisite service that's executed with thought and care.

Josiah: I guess to deliver that exquisite service, I wonder if we could break down this into a few different elements. You mentioned hiring the right people, especially in these high-visibility roles, like the doorman or the very first people you see. In the research or these conversations, did any sort of strategies or techniques for identifying people who would deliver this type of service emerge? Did you kind of notice anything in the hiring process that our listeners maybe could be thinking about?

Ryan: Yeah, I mean, there was one story that stuck with me that I love. One of the GMs said that what they really care about is attention to detail and being willing to go the extra mile beyond their job description to create an unparalleled experience for their guests. And so what this particular GM would do is as they were interviewing a candidate, they'd walk them around the grounds and then actually strategically place a pen on the floor along the route. And if the candidate picked up that pen and realized that that shouldn't have been there and either gave it to the GM or threw it out, that was a good sign. If they ignored it, that was a bad sign and probably not someone that would fit with their culture.

Josiah: I love the practical example of that because I feel many interviews are a little bit more standardized, right? And there's something about the immersive nature of actually putting people in the environments that they'll be serving from. Right. Hospitality is a very physical job, and if we're in a physical environment, and you have to be aware of all aspects. When we talk about experience, there are so many dimensions to that. In your research on these conversations, I'm curious if you notice certain elements of the guest experience as being especially important and maybe something for our listeners to incorporate in their interview or their recruiting process to focus on. Any specific elements of guest experience that are really important these days?

Ryan: I mean, one that really stood out is this notion of empathy. and being able to understand and anticipate what a guest needs. Actually, a few of the GMs we talked to did this, but for every employee across the hotel, no matter the role, so long as they met their three months in the role, they offered them and their partner a weekend at the hotel, all expenses paid, and room service, dinner, everything included. And the reason was to really help everybody in the hotel, again, no matter the role, understand what it's like to be a guest. And that, they've all said, helped each employee really best understand how to deliver for each of their guests every time. And that made a lot of a big difference.

Josiah: Interesting, right? And I guess it allows everybody in a hotel operation to understand what the experience is like, right? So you can serve from it. It's kind of hard to provide something that you haven't experienced yourself, I imagine, right? On some level, you could train it. You have to feel it, I imagine.

Ryan: Yeah. You have to sample the product. Yeah. If you're a chef, you have to sample the food before it goes out. And if you work in a hotel and deliver that service, you have to experience it.

Josiah: That's amazing. Were there any other recognition or reward programs you came across that were interesting? Because I'm hearing more and more people talk about whether it's on-the-spot recognition or something like that, or any kind of incentive or motivation programs that you found were useful in hotel leaders ensuring and kind of rewarding excellent service.

Ryan: There were many. So, from being able to decorate the cafeteria to just getting recognition in front of their peers. There are actually a variety of ways in which we heard GMs recognize exceptional service among their employees. I think the key point is that it's all about recognition, right? So, understand who your employees are and what matters to them and design a program around them. But the most important thing to do is to do it and to recognize them.

Josiah: Recognition is interesting, right, because it's important for team members, but it's also important for guests, right? And I imagine, especially in luxury, that recognition and personalized service have become absolutely vital. That's something you can train towards and provide processes towards. I feel like technology is changing so quickly in hotels now, and you have a front-row seat in that. Are you finding technology playing an increasing role in that service delivery, maybe around personalization or recognition?

Ryan: Yeah, the role of technology, both today and in the future, in my mind, is to provide superpowers to employees. And so, you know, when we talk to our clients across the hospitality sector, we hear that everything seems to be about Gen AI and how AI will change the world. And, you know, technology will create these highly digitized future hotels where you're greeted by robots, and there's not a human in sight. To be honest, that's not the future that I envision, and it certainly isn't one that I'd ever want. I think technology has tremendous potential to solve very specific pain points, such as waiting for check-in, getting a room that's too hot, too cold, too high, or just wrong. Technology and data will allow hotels to know more about their guests so that they can tailor the experience in more elegant ways. But, you know, once people step onto a property, they will still want that genuine human connection. So it won't be a matter of chatbots instead of concierges. It'll be both. But the latter will matter much, much more.

Josiah: Interesting. And maybe there's some nuance that depends on the brand and the point of view of providing hospitality. But I like that notion of technology providing superpowers. What do superpowers look like at work in a hotel experience?

Ryan: Yeah, I think the superpower all comes down to anticipating a guest's need and recognizing them for their loyalty and their past experiences. And in some cases, you know, if there was an issue or a problem with the service, we were able to remedy it very quickly. You know, some of the GMs I spoke to said that they tell their employees that they have essentially an unlimited budget to fix any service delivery problem. And in all of their years as GMs, they've never had to tell an employee, wow, you went too far with that. Ultimately, it comes down to the notion of trust. But the point is that you want to make sure that you're doing everything you can to create that memorable, distinctive experience. And in some cases, that means service recovery.

Josiah: Sometimes service recovery is one of the biggest opportunities to take someone who obviously had something unfortunate happen to them and create a fan for life, it feels because people know that mistakes happen. It's all about what you do with that, right?

Ryan: Exactly. Exactly. It also ties in with some other research we did on loyalty. And, you know, we do a survey every couple of years. One thing that was interesting that came out of the most recent survey we found is that satisfaction with hotels this year and three years ago is about the same, but satisfaction with loyalty programs declined significantly. And there are a couple of reasons for that. One is it's become harder in some situations to redeem points for amazing vacations as people have collected more and more points. However, the other is that people are actually looking for more than just earning and burning from their loyalty programs. And what are they looking for? They really want an incredible experience and recognition. And when you put that together, you can create a truly magical loyalty experience.

Josiah: That's fascinating. And I think, you know, that insight, I think kind of what you touched on in guest experience is something every hotel operator owner should be thinking about. Right. I feel like a key part of operations is also balancing the financial considerations of that. And I think in talking to a lot of people, it does seem possible to maybe have a policy like this of configuring a loyalty program such that it's delighting people, but also from what you mentioned before that of maybe having an unlimited budget to turn a situation around. You can still have that but think systemically about how you're operating the hotel. So you're conscious of costs, right? And I feel like many hotel owners and investors are getting squeezed by rising costs and lower profit margins. I'm curious if you've come across just general strategies that might have worked well or could work well in terms of identifying some cost-saving opportunities but ones that don't erode that great customer experience or maybe a brand's value proposition.

Ryan: Yeah, the brands that do this best that are able to manage costs while delivering a terrific guest experience are the ones that are closest to their guests. And I think that's not a coincidence. They're the ones who are continuously and consistently in close dialogue with their guests to understand what matters to them and also what doesn't. And they're investing disproportionately in the areas that matter. And then, you know, in some cases, investing less or not investing in the areas that don't. And some of those are surprising, right? So, you know, one of the brands I was talking to recently thought that they needed to have a specific room size in order to create this amazing experience for their specific guest every time. And as we dug into it and did research and talked to their guests, we learned that actually doesn't matter as much as they thought. And that unlocked new potential opportunities for them to enter different markets that they previously wouldn't have been in because, economically, it wouldn't have made sense. And so, high correlation between the companies that are able to do this really well and those that really, really know their guests.

Josiah: Well, knowing your guests is important for making them happy, right? It's also important for something else you touch on in this article of the importance of regularly reinventing what that guest experience is like so you don't get stagnant. Beyond staying close to your guests and listening closely to them, I'm curious if you've seen other factors in hospitality companies that have been very innovative or have been able to reinvent themselves. What are you seeing there, and how might our listeners think about reinvention? What might it look like to stay fresh?

Ryan: Yeah, there are multiple ways to think about reinvention. The one way that stood out to me in some of the interviews we did was actually reinventing their spaces depending on the time of the week and the specific guest base that's staying with them. So one of the hotel GMs talked about midweek attracting a business traveler who wants peace and quiet and tailoring the experience in that way. But on the weekends, they actually had their staff dress in more casual uniforms, and they had a more festive tone with DJs and ice cream socials. They brought a completely different vibe to their space because they knew that it's actually a very different guest that was staying with them on the weekends. And they can do that week in and week out, again, because they're staying really close to their guests.

Josiah: That's fantastic. So, Ren, I imagine there will be many people listening to this that are bought in. They say I want to provide a great customer experience. I want to delight my guests. I also want to empower my team to do that and create a great workplace environment, and succeed as a business. What would be your advice on where our listeners could go from here and take some of the next steps down this journey? Any pointers that you would have for our listeners?

Ryan: Look, it's not easy. And there's a reason why the very best hotels in the world get the rates that they do and have the reputations that they do. To put all these ingredients together and baking this incredible cake is not something that everybody can do. But when you have the right ingredients and overlay trust, which is the most important ingredient in many ways. And you really give your GM the runway to be the chief culture officer; you could really create something special. Those are the experiences that we remember. And those are the ones that we write about.

Josiah: Fantastic. Ryan, I will include a link in the show notes to your article, How the World's Best Hotels Deliver Exceptional Customer Experience. Encourage everyone to read that in its entirety. It's fantastic. Where would you advise our listeners to go to learn more about you and your work?

Ryan: McKinsey.com has all of our latest insights. We publish regularly, and you can also reach out directly to me. I'm happy to talk about hospitality all day, any day, every day.