What's fresh

You snooze, you lose

Britannia hotels and Travelodge have recently been voted the worst hotel chains in Britain by Which? Travel magazine. No massive surprise for me really – I had to stay in a Travelodge over the summer while we were waiting for our house to complete and it wasn’t exactly the Ritz – the windows didn’t open and they had no air-con. Double whammy. But then again, I wasn’t expecting the Ritz when I only paid £60/night. I accepted that “cheap” would undoubtedly spell “not so cheerful”.

Let’s not forget the fact being cheap can pay dividends. Many businesses have become very successful by playing the price card. They’ve found they can scrimp on customer service and experience in the knowledge that times are hard and people will still use their service as long as the price is low. Travelodge, for example, whilst being slated on TripAdvisor, has opened 14 new hotels in 2014 and they appear to be popping up on every corner. Ryanair too - I can’t find a single person who would recommend them for customer service, comfort or experience, and yet their annual profits this year are expected to be around £500m.  

But, where these price bashers have succeeded in the recession with minimal efforts in terms of innovation and investment in customer service, will the tides turn now the economy seems to be on the up? Evidence suggests the public are voting with their feet again and demanding decent service and good value. Ryanair profits, whilst still sky high (pardon the pun), are likely to fall this year and shares have slumped more than 11%. 

Premier Inn, on the other hand, seems to be moving in the right direction. In July this year, Whitbred (owners of Premier Inn) announced a new city centre hotel concept focused on cheaper, smaller rooms in the best locations, the first one opening in St Martin’s Lane in summer 2014. I’ve seen these hub rooms and they are impressive – very modern, high tech and most importantly, affordable. The idea is that they are the same price as a Travelodge. If you want to crash for a night for a business trip or simple overnight stay, I know where I’d rather stay.

A fundamental driver for this change seems to be hiring strategy. Whitbread for example is running a graduate scheme for the first time, trying to get analytical talent into the business to help drive innovation and business improvement. The focus is on improving the customer experience not just finding a way to make it cheaper.

So perhaps the seemingly endless ‘war of the prices’ that was the feature of the recession might be being replaced by a race to innovate. Perhaps the real winners will be the ones who deliver more for their customers whilst still offering good value. So get with the programme Ryanair and Travelodge – you snooze you lose!