How do you test your guests’ loyalty?

During a recent SMART (sales, marketing and revenue targets) meeting, I was informed by my rather excited revenue manager that we were sold out at great rates for the entire following week, which was welcome news after a difficult start to the month, dampened by local election violence, which had emptied Karachi’s hotels and streets.

However, the bad news was that we had several key clients on the waitlist for our premium-rate Business Class rooms and Penthouse Suites, and all were waiting on a confirmation from me, as most of them were my personal key accounts.

When my team asked me for advice on how best to proceed, I immediately saw an opportunity to do something I had wanted to do for a long time, and that was to test the loyalty of a few key accounts by letting them know they had left it for too late to reserve a room, and that I was going to transfer their reservations to my closest competitors, where they would have to negotiate their own rates, which would in all probability be significantly lower than ours.  

This decision surprised several members of my revenue development team, as they had wrongly assumed I would retroactively cancel already accepted and confirmed lower-rated reservations in favor of my higher-rated, loyal key accounts, just in case we upset them or, even worse, lost them for good. (Although as far as I know, we have never engaged in such underhanded business practices, and we never will as long as I continue to lead the team.)  

However, I was glad they brought up this assumption, even though it was wrong, because it provided me with the perfect opportunity to have a serious discussion with my team about customer loyalty and brand integrity, and how I felt confident enough to take this valuable opportunity to test our guests’ loyalty to our hotel and to our brand. I have always felt the strength of a business such as ours lies in the true sense of loyalty it can arouse in the hearts of its customers.

I should mention at this point that all five of these key accounts have been with me for the past six years, and their rates have increased by at least 100% over that same period, so it was very important to me personally to see whether that would translate into 100% loyalty and retention despite our inability to accommodate them on this one particular occasion.

And so I called them, one at a time — all of whom are senior VPs, CEOs or COOs of leading global brands in Pakistan and around the world — and gave them the bad news personally. The surprising thing was that every one of them congratulated me first of all on the full house. Then they all assured me this single disappointment would in no way deter them from returning to my hotel in the future, so I was not to worry about it. Best of all, they all agreed to provide me with feedback on their stays with my competitors across the street.

Unfortunately, all were disappointed with their stays at the other (leading international) brands, which is rather strange, as the management of those competitor hotels should have realized they had an opportunity to grab and retain several of my key accounts who were staying with them for the first time.

However, the most important thing for me was to receive assurance from my displaced guests, all of whom received a wrapped basket of delicious sweet Pakistani mangoes at their temporary alternate hotels along with a personal handwritten note of apology from me that they would all be back with us next time they visited Karachi — if their personal assistants managed to reserve a room on time.

Was it a risk worth taking? Absolutely, and I am glad we did take it, as it proves and validates without doubt our reservation system integrity, the strength of our guests’ loyalty and our absolute confidence in our people and products. That’s a gamble worth taking any day — if you are sure of coming up trumps.

Have you ever tested your guests’ loyalty? If so, how, and what was the result?