Habits die hard … but there are ways to change buyer expectations.

What’s the easiest way to change time-honored expectations? With dollar signs.

Humans are creatures of habit. Even little kids gravitate towards the “patterns” of daily life such as bedtime rituals.

These forces are what make it so challenging for companies and brands to introduce changes that go against habit.

We’ve seen this play out recently in two segments of the travel industry: airlines and hotels.

Challenging in both cases … but the changes in one are being accepted, while summarily rejected in the other.

untitledLet’s start with the initiative that’s flamed out. This past November, Hilton Worldwide launched a pilot at a number of its hotel properties where it began charging guests a penalty of $50 if a reservation needed to be canceled any time after booking.

The rationale for the initiative was the notion that hotels should join the rest of the world when it comes to the way its products are sold. After all, for most any product, once someone purchases it they’ve committed to buy it.

Not so with hotel reservations, where über-flexible cancellation policies have been the modus operandi seemingly forever.

The way that some in the industry see it, the practice of hoteliers tying up inventory at no cost or penalty seems illogical.

It’s why some chains have introduced stricter 24-hour policies wherein the first night room cost is charged to customers who fail to cancel before midnight the day before their arrival, instead of the afternoon of their planned arrival.

hlBut Hilton’s pilot went even further than this, because the cancellation fee would be charged regardless of when the cancellation was requested – even if it was days or weeks before.

Predictably, customers totally hated it.

So much so, Hilton canned the policy less than three months in.

Putting the best spin on things, CEO Christopher Nassetta remarked that Hilton “did get some nuanced intelligence out of the experience.”

Perhaps that intelligence was not quite as nuanced as Nassetta infers! At the bottom of this customer fail is a fundamental axiom:  If you mess with time-honored practices that people have come to expect as the normal course of business, you do so at the risk of major blowback.

But we have another recent developing in the hospitality industry that points to a different result. In this case, it’s in the passenger airline segment.

last classDelta and a few other airlines have been successfully rolling out a new class of travel euphemistically called “basic economy” or “super economy” class.

[Others call it “economy minus” or “last class” air travel.]

Essentially, what the airlines are now offering are the lowest available airfares that will get travelers to their place of destination – and that’s it. All of the basic amenities available to traditional coach class travelers are missing.

If one chooses to travel “super economy,” here’s what’s in store for them:

  • Seats with less leg-room than coach (if that’s even possible)
  • No free snacks or drinks
  • No free in-flight entertainment
  • No free carry-on bags
  • No advance seat assignments
  • No itinerary changes or ticket refunds (even with a service charge)
  • No frequent flier miles

For giving up all of this, customers are being quoted prices for air travel that are so low, they rival ground transportation rates.

But for travelers who don’t have to worry about changes in their travel plans … don’t care about in-flight comforts … or don’t travel frequently and therefore find frequent flier programs irrelevant to their personal situation, the tradeoffs appear to be worth it.

Because the passenger airlines need to make physical adjustments to their planes in order to offer “super economy” class, a lot is riding on the consumers’ acceptance of these tradeoffs. So far, Delta Airlines has found sufficient success with its pilot program to plan for its expansion.  And United and American are now getting ready to offer their own programs.

The key difference between the airline and hotel pilots boils down to providing a price incentive.

Even with time-honored or habitual practices, if you make it financially lucrative enough, you’ll get the behavior changes you’re seeking. Bottom-line, that’s the bottom line.

Speaking personally, seeing as how I feel strapped for space on airline flights already, I doubt I’ll be traveling “super economy” class anytime soon, except perhaps on very short hauls.

But I know for a fact that I’ll never book a room that’s subject to a cancellation fee.

Frequent flyer programs: No longer going the distance.

What took so long?

frequent flyer programsDelta and United Airlines have announced what they hope will be an industry-pacesetting change in the way frequent flyer programs are administered by the world’s biggest airlines.

The two air passenger carriers are shifting away from awarding points based on flight distance, and instead will award points based on the actual airfare paid by the traveler.

The change in procedures will become effective in 2015 (in January for Delta and in March for United).

In retrospect, one wonders why it took so long for the big airlines to make this move.

After all, the very nature of loyalty programs is to reward a company’s best and most profitable customers.

Business travelers who book a flight a few days ahead – not to mention people who prefer to travel first class – are far more valuable to an airline than someone who books the “Cheapy Charlie” web-only fare months in advance.

Besides, prominent low-cost air carriers like JetBlue, Southwest and Virgin have been using revenue-based methods of calculating their frequent-flier points for a good while now.

As for which types of travelers will come out winners vs. losers in the frequent flyer program changes, it’s exactly who you’d expect:

  • Big Winners:  Business passengers traveling internationally and on refundable-fare domestic flights + first-class passengers.
  • Big Losers:  Leisure fliers in coach class + business flyers who travel on cheap fares.
  • In-Betweeners:  Business passengers who travel using a mix of business and economy fares.

The recent announcements by Delta and United leave only American Airlines as the last big U.S.-based global carrier that still maintains the traditional distance-based calculation for earning miles.

I wonder how much longer they’ll hold out?

Only a matter of months, I’m guessing.

What are your opinions about the changing policies?  Are there particular frequent flyer programs you love?  … Or love to hate?  Feel free to share your thoughts with other readers.

Which are the 10 Scariest Airports in America?

By Phillip Nones

Happy landings
“Welcome to Charleston, West Virginia. You can stop hyperventilating now.”

I’ve flown in and out of many airports in my time, encountering the usual plane delays and occasional rough-weather bumpy rides along the way.

But the most frightening airport I think I’ve ever experienced is the one in Charleston, West Virginia.  It’s situated on top of a mountain, and the runway ends mere feet away from a cliff-like drop-off.

Other people I’ve spoken with are spooked by the airports in San Francisco and Boston, where the runways protruding into the ocean give the eerie sensation of landing on water.

In any case, when Airfarewatchdog.com came out with its “Top 10 Scariest Airports in America” ranking recently, I wasn’t surprised to see that the Charleston airport made the list.

Shown below are the ten airports in question, headlined by Reagan National Airport.  See how many of them you’ve flown into … and if you agree that they deserve the notoriety:

#1 Scariest:  Reagan Washington National Airport, Washington, DC – Perched precariously as it is between two overlapping no-fly zones, approaching and leaving this airport is akin to threading a needle.

#2:  Telluride Regional Airport, Telluride, CO – It’s the highest-altitude commercial airport in North America, with no touch-and-go landings permitted.  Basically, the pilot gets one shot to land the plane.

#3:  Catalina Island Airport, Avalon, CA – Its elevation and location on the edge of the island makes planes prone to major-league turbulence and downdrafts.

#4:  LaGuardia Airport, New York, NY – As Airfarewatchdog.com puts it, the airspace around this airport is “uniquely crowded” (read:  dangerous).

#5:  San Diego International Airport, San Diego, CA – It has a downtown location.  No more needs to be said.

#6:  Yeager Airport, Charleston, WV – My “favorite” white-knuckle airport makes the list:  the one with the runway atop a mountain that’s situated between two ravines.

#7:  Rocky Gutierrez Airport, Sitka, AK – Obstacle course ahead:  When the weather is stormy, rocks and other debris pile up on the runway at this island airport facility.

#8:  Midway Airport, Chicago, IL – Short runways and a “convenient in-town location” make for some interestingly rapid dropdowns from the sky … not to mention “pull-back-on-the throttle” takeoffs.

#9:  John Wayne Airport, Santa Ana, CA – Air sickness bag alert:  Appropriately Californiaesque state and local noise restrictions require takeoffs at full throttle … then cutting back immediately on the engines.

#10:  Pitkin County Airport, Aspen, CO – The exact opposite of Charleston, WV:  This airport is situated in a valley wedged between two mountains – no doubt massively fun during one of Aspen’s notorious snowstorms.

Based on your own experiences, which one of these airports should be ranked “#1 Scariest”?

… Or are there other U.S. airports that you think qualify for “Top 10” honors?  I’m sure other readers would be interested to hear your perspectives.

Come to think of it, if you have any “scary airport tales” from anywhere in the world, here’s your chance to enlighten us …

Hotels Finally Turn the Corner on Customer Satisfaction

Hotel guest satisfaction surveys
According to J. D. Power, hotel guest satisfaction ratings in North America are up for the first time in years.

One of the industry segments that took the biggest beating in customer satisfaction during the recent recession was the hotel sector.

Annual surveys conducted by J. D. Power charted a continuing decline in satisfaction rates.  In everything from reservations and the check-in process to the cost of stay, hotel customers have been giving “thumbs down” for the past half-decade.

Until now.  

Marketing information services company J. D. Power & Associates, part of McGraw Hill, has just released the results of its latest annual survey, based on responses from more than 68,700 hotel guests in the United States and Canada collected between July 2012 and May 2013. 

J.D. Power has conducted these hotel industry surveys annually for the past 17 years.

According to the 2013 North America Hotel Guest Satisfaction Index Study, the overall guest satisfaction rating index is 77.7 on a 100-point scale. 

That may seem like a “Gentleman’s C,” but it’s an increase from last year’s 75.7 score. 

More to the point, it’s the first time in quite a few years in which the aggregate rating has gone up.

Where has satisfaction increased?  Pretty much in every category surveyed, with the largest gains coming in the reservations process, check-in/check-out procedures, and hotel costs and fees.

Other categories included in the study were guest room satisfaction, food and beverage service, other hotels services, and hotel faciliites.

The largest area of continuing discontent is in Internet usage.  Customer complaints are all across the board — ranging from spotting connectivity and slow speeds to usage charges.

Other areas where improvements are sought are in HVAC comfort and controlling noise levels.

What about customer reaction to rising hotel rates?  After all, they’ve gone up by about 5% over the past two years. 

But the J. D. Power survey found little concern about rate increases.  Rick Garlick, director of the survey, suggests that pulling out of the economic downturn might explain this lack of concern.  “The economy may be playing a part in price satisfaction because people have a little more to spend,” he noted.

The people who appear to be the least satisfied with their stay experience are the ones who chose to stay at a hotel based on price alone.  It’s like the adage says:  “You get what you pay for.”

On the other hand, the most satisfied guests weren’t necessarily people who stayed at 5-star properties.  Instead, they’re ones who evaluated hotels carefully beforehand using online tools such as third-party hotel reviews and ratings.  The “eyes wide open” strategy, as it were.

Such evaluation tools have made it easier to know what to expect from a hotel stay, contributing to overall satisfaction ratings because there’s less likelihood of a “rude awakening.”

The J. D. Power surveys also ask respondents to rate hotel brands.  I was interested to see which hotels scored highest in the various different categories in this year’s survey:

  • Luxury category:  Ritz-Carlton
  • Upscale:  Hyatt
  • Midscale Full Service:  Holiday Inn
  • Midscale:  Drury
  • Economy/Budget:  Microtel (Wyndham)
  • Extended Stay:  TownePlace Suites

Come to think of it, none of these results is particularly surprising.  In fact, three of the brands (Ritz-Carlton, Holiday Inn and Drury) have been tops in their category for three or more consecutive years of the J. D. Powers studies.

Additional survey findings are available here.

Where in the World do Americans Wish to Vacation?

World of travel: Americans see Italy as their #1 overseas vacation destination.Have you ever wondered where Americans would wish to vacation overseas if they had the opportunity and the financial wherewithal? It’s a topic that that Harris Interactive surveys every year.

The results are now in for the 2011 survey, which queried nearly 2,200 adults online in July … and for a second year in a row, Italy comes in first place in popularity.

Countries in Europe and Oceania remain the most popular vacation countries for Americans, a finding Harris has observed in annual surveys ever since 2008. This year, the Top 10 countries chosen by respondents for vacation destination are as follows:

#1: Italy
#2: Great Britain
#3: Australia
#4: Ireland
#5: France
#6: Greece
#7: Spain
#8: Germany
#9: Japan
#10: Canada

Since 2008, the biggest shift in popularity has been in Spain (up three notches) and in Japan (down two spots). What’s causing this? One too many natural disasters in Japan? … The increased popularity of the Costa del Sol?

While Italy is the top pick in 2011 for both men and women, there are some differences when looking at the next-ranked countries:

 For men, the #2 choice is Australia, followed by Great Britain.

 For women, the #2 choice is Great Britain, and Ireland is #3.

 Baby boomers as well as respondents over the age of 65 choose Great Britain over Italy as the top vacation destination.

In viewing the 2011 results, I was somewhat surprised by the lack of any Caribbean countries on the list.

If Harris continues to conduct this survey annually, it will be interesting to see how the results change over time. I’d predict that Brazil and Argentina may start making the Top Ten list before too long. (Speaking for myself, those two would be my picks a lot sooner than some of the other countries listed above.)

More survey stats and a history of results can be found here.

A Social Media Success Story from the Far North

Lily and Hope, the famous black bear mom-and-daughter duoNow that social media has gone from being a novelty to becoming standard fare in marketing and communications programs, we’re seeing evidence as to where these tactics shine their best.

One aspect that’s become clearer over time is that the most effective uses of social media must have an underlying “hook”; it’s not sufficient simply to engage in social media as just “business as usual.”

An interesting example of this phenomenon at work is Bear Head Lake State Park in extreme Northern Minnesota. It’s located near Ely, a town that’s miles from nowhere but somewhat famous as the embarkation point for exploring Minnesota’s Boundary Waters Canoe Area.

This is the most famous park you’ve never heard of. How so? Because it beat out every other national and state park in the country in winning a popularity vote on the Internet.

In a just-completed “America’s Favorite Park” contest co-sponsored by the National Park Foundation and Coca-Cola, Bear Head easily outpolled every other park in the United States by garnering nearly 1.7 million votes out of 5.7 million cast, far outdistancing the runner-up (Great Smokey Mountain National Park).

How does a park ranked just 11th in the state of Minnesota and visited by only ~100,000 people annually accomplish such a feat?

The answer lies in taking a fortuitous event and figuring out how to give it velocity through the social media world. In this case, the “hook” was a webcam that had been set up in the park by the Ely-based North American Bear Center to record the birth of a bear cub named Hope.

Hope and her mother Lily were given their own Facebook page and had attracted more than 112,000 fans, while another ~90,000 people followed the bears on the North American Bear Center’s own web site.

So when the Coca-Cola contest came along, the web site administrators went into action, asking the bears’ friends and supporters to vote for the local park as home to the research bears. They emphasized that people could vote as often as they wanted, which resulted in some friends placing dozens or even hundreds of votes for the park.

The objective wasn’t just to gain fame as America’s “favorite park.” The contest also included a $100,000 prize for the winning park. That was the big incentive in the case of Bear Head Lake, which as a small state park has an annual working budget of only ~$226,000.

Reportedly, the prize winnings will go toward building a three-season trail center, a project that has been on the drawing boards for years but never begun due to lack of state funding. “At a time when many parks are facing difficult financial and budget decisions and reducing services … this is quite an opportunity for us,” noted Jan Westlund, the park’s manager.

Lynn Rogers, a researcher at the North American Bear Center, summed up the success of the initiative this way: “None of this would have happened without our 200,000 fans.”

This one example of social media success tells us an awful lot about how to harness the power and “viral velocity” of social media as a tactic.

The key is to consider each event or opportunity that comes along and then envision what could happen if social media tactics are applied. By contrast, starting out with social media is approaching it backwards … and more than likely, mediocre results will be the result.

A mobile society? We’re not there again yet.

U.S. Population MigrationLast year, I blogged about a startling development in the mobility of Americans: fewer of us moved in 2008 than in any year going back decades.

If there was any proof of the recession’s toll on the lives of many Americans, this is surely it. Not only that, it reflects the lost allure of many of the “magnet” states of recent decades, particularly Nevada, Arizona, California and Florida.

Now, new data covering 2009 have just been released by the U.S. Census Bureau. The latest information reveals that more Americans moved in 2009 than in 2008 … but it was just a small uptick.

Moreover, the increase in mobility was almost entirely the result of people moving within their home counties – nearly eight times more prevalent than migrating from state to state.

What does this mean? In many instances, intra-county mobility may be the result of people who have moved in with family or to nearby rental properties after having lost their homes to foreclosure.

And the low rates of mobility in general may reflect the unwillingness or inability of people to move because they owe more on their mortgage than their home’s current value, thanks to the collapse of the housing market.

William Frey, a demographer and senior fellow at the Brookings Institution, sums it up this way:

“These data show that the great migration slowdown, which began three years ago, shows no signs of revising to normal U.S. patterns. Since labor migration is often seen as the grease that spurs the flow of goods, capital and job creation, these new numbers are not encouraging.”

Mobility almost always declines during periods of economic hardship. But it’s now clearer than ever that this particular recession has caused the biggest drop in mobility rates America has seen since the days of the Great Depression.