ANN ARBOR, Michigan—On 22 April, the American Customer Satisfaction Index released results for its second annual “Hotel brand study.” This study is complementary to ACSI's longer-running hotel industry study, which has measured customer satisfaction (along with other variables, such as consumer expectations, perceptions of quality, perceptions of value, complaint rate and customer loyalty) with the eight largest U.S. hotel companies (each including multiple brands) over the past two decades.
The ACSI “Hotel brand study” expands on this and includes measurements of 29 of the largest U.S. hotel brands, while also diving deeper and measuring particular aspects of the consumer experience at hotels—such as ease of check-in, room quality, amenities like in-room Internet connection and several other factors.
The 29 hotel brands included for measurement were chosen because they were the most frequently identified by the interviewed consumers who had stayed at a hotel in the U.S. during the past 12 months.
As shown in the graph below, the hotel brands measured show significant variance in customer satisfaction performance between the highest and the lowest performers, from a low score of 67 (on the 0-100 scale used by ACSI), which is well below the overall hotel brand average of 77, to a high of 86.
Click chart to enlarge.
*Chain-scale brand categorization data come from STR's classification system. The system places hotel brands into categories based on actual average room rates. The six categories used by STR, from highest to lowest average room rates, are: luxury; upper upscale; upscale; upper midscale; midscale; economy. The classification system also includes another segment for non-branded independents.
Ritz-Carlton, JW Marriott lead top tier
Leading the industry with the highest ACSI score was Ritz-Carlton, registering a score of 86, three points above its nearest competitor. JW Marriott was next in line at 83.
Perhaps not surprisingly, the two customer satisfaction leaders among the measured hotels are classified as luxury brands by STR, a segment that offers high-quality services at a premium price. While these higher prices depress consumers’ value perceptions to some extent, the far-superior quality is enough to produce consumer satisfaction at high levels.
For the most part, a correlation between customer satisfaction performance and chain-scale brand categorization can be found throughout the study’s customer satisfaction data, though the correlation is not perfect and includes some important exceptions that are instructive in their own right.
Five brands—Hyatt, Westin, Hyatt Place, Fairfield Inn & Suites by Marriott and Hampton Inn & Suites—came in just below the two leaders, each with a score of 82. Two of these brands (Hyatt and Westin) fall in the upper-upscale hotel category, while Hyatt Place falls in the upscale category.
Fairfield Inn & Suites by Marriott and Hampton Inn & Suites were the only two brands in this top-tier of satisfaction performers that did not rate upscale or higher; both are categorized as upper midscale. In a sense, these brands should be viewed as having outperformed their classification in terms of satisfaction performance, coming in above all of the other upper-midscale brands.
Average performers
Hovering around the brand average score of 77 were three brands at 78: Grand Hyatt, Hyatt Regency and Holiday Inn. An additional four brands reported scores of 77: Hilton Hotels & Resorts, DoubleTree by Hilton, Springhill Suites by Marriott and Comfort Inn & Suites.
These brands are considered average satisfaction performers, offering a consumer experience neither significantly superior nor inferior to the average. For at least three of these hotel brands, achieving just "average" satisfaction performance would most likely be viewed as a failure, given that one falls in the luxury segment of premium-priced hotels (Grand Hyatt), while another two fall into the upper-upscale category (Hyatt Regency and Hilton Hotels & Resorts).
Econo Lodge, Super 8 lag behind
At the bottom of the range are two brands offering a decidedly below-average experience: Econo Lodge and Super 8, whose respective scores of 67 and 68 were the only two to fall below 70 among the brands in the sample.
Both are classified as economy providers, so their comparatively poor satisfaction performance might be considered acceptable. However, the significantly higher ACSI score registered by Days Inn & Suites, another economy brand that received a score of 73, shows that brands in this category need not necessarily offer the lowest satisfaction ratings.
Another three midscale brands scored near the bottom at 72 (Best Western) and 70 (Ramada Inn and Quality Inn).
The comparatively low score of 72 for upper-upscale brand Sheraton is troubling, given the brands Sheraton competes with all score substantially better, with some (Hyatt and Westin) scoring in the very top tier of satisfaction performers.
Movers and shakers
In terms of the largest year-on-year changes in ACSI performance, a few of the hotel brands stood out.
Among the hotels scoring near or above the brand average, Hilton Garden Inn notched the largest increase at 5.2%. Hyatt and Hyatt Place also showed substantial improvements of just less than 4%, from scores of 79 to 82.
Hyatt Regency was the only hotel above the average to register a substantial decline, falling almost 5% from a score of 82 to 78.
Among the hotels at or below the brand average score of 77, almost all of the large, significant changes were for the worse. Hilton Hotels & Resorts dropped almost 5%, down from 81 to a score of 77. Sheraton, Best Western and Quality Inn all dropped substantially as well, registering declines of 5.3% for Sheraton (from 76 down to 72), 6.5% for Best Western (from 77 to 72) and a whopping 9.1% for Quality Inn (from 77 to 70).
Tracking satisfaction scores over several years is the only way to determine if these changes truly indicate a permanent worsening of the consumer experience, but executives at any brand seeing satisfaction erode should be concerned.
The American Customer Satisfaction Index is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. Data from interviews with approximately 70,000 customers annually are used as inputs into an econometric model to measure satisfaction with more than 225 companies in 47 industries and 10 economic sectors, along with over 200 services, programs, and websites of approximately 130 federal government agencies. The Index was founded at the University of Michigan’s Ross School of Business and is produced by ACSI LLC. ACSI can be found on the Web at www.theacsi.org.
Forrest V. Morgeson III (Ph.D., University of Pittsburgh) is Director of Research at the American Customer Satisfaction Index (ACSI) in Ann Arbor, Michigan.
A.J. Singh is the Professor of International Lodging, Finance and Real Estate Finance in The School of Hospitality Business at Michigan State University. Dr. Singh's has more than 15 years of hospitality business experience in various management positions in the U.S. and India.
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