Faculty Researchers In The School Of Hospitality Business Develop The "Hotel Experience Index"

East Lansing, MI - A team of faculty researchers in The School of Hospitality Business at Michigan State University has developed the Hotel Experience Index (HEI) and identified the four unique dimensions of a guest's hotel experience. This innovative study was published in the January 2009 issue of the Cornell Hospitality Quarterly.

Elusive and indistinct, experience is difficult to measure because of its multiple elements and individualized, personal nature. Yet there are clear economic distinctions between experiences and such other items as commodities, goods (products), and services.

In 2003, Drs. Bonnie J. Knutson, Jeffrey A. Beck, Seunghyun Kim, and Jaemin Cha launched their investigation of the experience construct by reviewing nearly 600 articles, looking for connections, correlations, or relationships among value, service quality, customer satisfaction and consumer experience. In 2005, they developed the Consumer Experience Index (CEI), which in turn led to this latest research study that focuses on the hotel industry.

The researchers employed a two-phase, online survey methodology and exploratory/confirmatory factor analysis to uncover and validate the four underlying dimensions of a guest's hotel experience:

• The most critical dimension of a hotel experience is Benefit or the advantage for the guest of staying at the hotel. It incorporates a practical nature, which includes safety, reliability and consistency.
• Convenience is the second most important aspect of the guest's hotel experience. This factor is time-based and involves a logical configuration of the rooms and facilities, availability of amenities and services, as well as ease of making reservations.
• Ranked third is Incentive. Price, or price incentives, is the chief element of this dimension and embraces frequent guest programs or room upgrades.
• The final dimension is Environment, which is analogous to the tangible elements of their experience. The hotel's surroundings need to be stimulating, entertaining, motivating, interactive, and thematic.

This breakthrough HEI study suggests two key findings for the lodging industry:

• The elements composing the four dimensions can become a checklist of sorts to ensure an optimal guest hotel experience for individual hotel brands.
• The index also offers a method for measuring the effectiveness of the hotel's customer experience management (CEM) efforts. Managers can measure how important each dimension is to their target markets. Using parallel questions, they can then survey guests about their perceptions of their experiences. Differences in the scores can be calculated for each of the four components and for the overall HEI, thereby revealing strengths and weaknesses in the hotel's guest experiences.

"Our bottom line goal for doing this study is to give hotels a cost-effective tool which they can easily use to raise revenues and manage costs," says Professor Knutson. "This is particularly important in these tough economic times when the average revenue per available room – the standard measure of hotel performance – has been falling."

The next phase of the professors' research will focus on discovering the underlying dimensions of the guest's experience in the various segments of the restaurant industry.

SOURCE: The School of Hospitality Business at Michigan State University