Hampton Inns

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A subcommittee of the board of directors of Hampton Inns has made a bold proposal that customers be given a guarantee of “complete satisfaction or your night’s stay is free”. Employees will be permitted to make good on this guarantee without the approval of managers. But although the proposed guarantee would show great confidence in the hotels’ quality and would give Hampton Inns a competitive advantage, most of the hotel’s managers oppose the plan. Why would they not want to guarantee customer satisfaction? What are the possible customer reactions to such a guarantee? What controls can be introduced to reduce customer abuse? A service guarantee (i.e. complete satisfaction or your night’s stay is free) makes the customer a meaningful…show more content…
This may cause the employee to make decisions which may not be conducive to the business, which the manager has no control over therefore leading to too many invocations and loss of profitability. What are possible customer reactions to such a guarantee? Potential and existing customers could be attracted to the hotel due to the reduction of the perceived risk of booking and staying at Hampton Inn (i.e. if I stay at Hampton Inns and I do not have complete satisfaction at least I would be able to get my night free). The customer may be given a perception of superior quality based on the service guarantee offered. As a result of the service guarantee made, customers would expect superior service, since hotels would not want to give away free nights. The hotel may be seen as a reliable supplier. Customers may have increased loyalty based on service recovery in the case of service failure, and may spread the positive reviews about the hotel via word of mouth. Customers may want to try to abuse the system at the hotel, by trying to use trivial complaints in order to invoke the promise of the free night. For instance, after Hampton Inn spotted a guest who invoked its guarantee 18 times within one year, they put this customer on a blacklist. (Van Looy, Gemmel & Dierdonck, 2003) Perception of reduced quality of the hotel based on the fact that the service

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