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Will the elimination of services close the brand gap?

Wednesday August 7th, 2013 - 4:40PM

James (Jay) Schultz, Senior Vice President, Hospitality Group

By now, you are aware that the New York Hilton has eliminated room service. From a purely business perspective, Hilton was absolutely justified in eliminating the costly food & beverage option. Reinforcing the decision was PKF’s research reporting that room service revenue in 2012 represented merely 1.2% of total hotel revenue, which was down from 1.3% in the previous year.

I am sure that most business travelers would agree that some of the most productive time on the road takes place early in the morning behind a laptop. It’s so easy to call room service, never having to leave your desk, except, of course, to answer the door. And while I under- stand that a growing percentage of today’s travelers do not take advantage of the in-room dining option, there are guests that still do.

There isn’t a doubt in my mind that Hilton’s new alternative to room service, Herb n’ Kitchen, a quick serve and buffet concept, will offer its guests an outstanding dining alternative. However, in a perfect world, there would be multiple options to offer guests.

During the past few years, I have heard ‘the only difference between full- and select-service hotels is meeting space.’ As such, I can’t help but wonder if discontinuing services such as in-room dining lend credence to this point of view?

The million dollar question is: How long will it take for other brands to embrace the option of eliminating room service, as well as other services and amenities that are deemed unprofitable?

Meanwhile, the lines continue to blur between full-service and limited-service properties and it gets harder and harder to distinguish the two. It’s difficult to compare a property the size of the New York Hilton to a Hampton Inn in New York City; however, there are many similarities in terms of services. Both hotels offer breakfast and WiFi (both are free in the case of Hampton), as well as a host of other amenities.

While the guest experience at the Hilton will still be different, the gap has clearly been narrowed. This serves to illustrate the point that the brands will have to think long and hard before abandoning some of the traditional services that many of their guests have come to expect. That is if they want to clearly separate one brand versus another.

—James (Jay) Schultz