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For travelers today, it’s (still) all
about value—but what do they value?
AI insights focus hotelier investments on what guests want most
By Kelly McGuire, Russell Evans, Satvika Ananthanarayan and Brandon Rufer

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Mismatched expectations led to an industrywide “satisfaction crisis” in 2021 as labor
shortages and pandemic restrictions constrained hotels’ ability to deliver service at prepandemic levels. At the same time, demand surges and rising inflation occasionally resulted
in historically high average daily rates (ADR) that are still rising. Hospitality executives
have been carefully watching traveler behavior over the last few years to detect how it haschanged and identify what the expectations of the “new traveler” might be. The overarchingquestion these days is: In this current environment, are hotels still delivering value to guests?
As a follow up to our 2021 study, “Leveraging guest feedback to navigate return to travel,” wedecided to tackle this question.
We began by analyzing changes in guest value perceptions in the U.S., by chain scale, from2019 to 2021 and from 2021 to 2023. We also drilled down into what features of the stayexperience are most important to guests and how U.S. hotels performed against them.
Using a database of guest reviews from U.S. hotels from 2019 through April 2023, we were
not only able to uncover the topics on guests’ minds and their sentiment toward them, as
expressed in their reviews, but we also were able to understand the impact of these topics
on overall satisfaction, as quantified by one- to five-star ratings. The AI algorithms in ZS
Atlas Intelligence take a bottoms-up approach to analyzing guest feedback, surfacing thetopics guests are talking about rather than assuming a pre-structured categorization of data.
They then test the relationship, or impact, these topics have on satisfaction. The tool allows
hoteliers to go beyond mentions and sentiment to understand which topics merit investment
to deliver better stays.
FIGURE 1:

Shift in nominal ADR from 2019 to 2023—net sentiment toward “value for money”
Nominal ADR ($)

Net sentiment “value for money” (%)

16060
Nominal ADR

12040Luxury
Upper upscale8020Upscale
Upper midscale

4000-20Midscale
Economy

2019

2020

2021

2022

2023

Source: ZS Atlas Intelligence© 2024 ZS | 1

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How hotel guest value perceptions changed from 2019 through early 2023
Value perceptions across chains declined dramatically between 2019 and 2021, particularly
in 2021 as return to travel surged in the U.S. While they did not quite rebound to 2019 levels,
value perceptions increased and started to stabilize through April 2023 (Figure 1).
It’s crucial for the industry to remember the two elements guests balance when theyevaluate value—what they get for what they pay. In the value trade-off, “price” is the amount
you pay, and “value” is the service experience you get. In the data we pulled, guests didn’t
complain about how much they paid. They were remarking on what they got. While hotels
should continue to price based on demand and market conditions, the focus needs to be on
improving the quality of the service experience.

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What is affecting satisfaction for today’s traveler?
To continue to increase guest satisfaction, hoteliers need to understand what guests expectfrom their stay and how their properties and staff deliver on those expectations. Using thesame database of reviews, we did a high-level analysis comparing changes in satisfaction
from 2019 to 2021, the return-to-travel period, and 2021 to 2023, the return-to-normal period.
FIGURE 2:

Cleanliness accounted for a negative impact of 0.3 stars in 2021 and a positive
impact of 0.17 stars in 2023
2019-2021 Drivers of score shifts—impact for all concepts across chain scales
4.07

-0.29

-0.19

+0.29

+0.03

3.80

Customerservice

Others

2021

+0.31

3.94

Food andbeverage2023-0.07

2019

Cleanliness

Food andbeverage

Room

-0.02

-0.01

Price

In-house
services

-0.01

-0.01

-0.00

Property Membership Registration
amenities
programprocess

+0.00

+0.00

Ambience

Property
condition+0.01

Room view2021-2023 Drivers of score shifts—impact for all concepts across chain scales

3.80

-0.16

-0.08

+0.17
-0.03

-0.02

-0.01

-0.09
+0.00

2021

Customer
service

Room

Roomview

Property
amenities

Property
condition

Others+0.00

Ambience Membershipprogram

+0.01

+0.01

+0.01

In-houseservices

Registration
process

Price

Cleanliness

Each waterfall chart shows the range of topics that surfaced as having an impact on
satisfaction, from most negative to most positive. While satisfaction has improved since 2021,
it has not yet returned to 2019 levels. Interestingly, the two negative drivers of satisfaction in
2021 are now positive drivers of satisfaction in 2023, and the one positive driver from 2021
has become a negative driver in 2023. This suggests that improvements have been made in
key areas, but there are opportunities to continue to improve satisfaction.

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FIGURE 3:

Drivers of score shifts—impact for all concepts across chain scales (2019-2021)
2019-2021
Key drivers for satisfaction

Prioritized features

Negative change in contribution

CleanlinessDirty, clean, dusty, ﬁlthy,
neatness and room andproperty cleanliness, etc.

-0.39

Positive change in contribution

Cleanliness was a challenge
across chain scales, especiallyfor midscale

-0.17

Price
Base rate, oﬀers, extra fees,
resort fees and taxes, etc.

-0.03

0.00

-0.03

0.00

Property amenities
Pool, gym, spa, sauna, ﬁtness
center, common area and club

Room

Higher chain scales suﬀered
the most for room
conditions

0.10

-0.23

Bathroom, bed, living space,balcony and microwave

Customer service
Demeanor, friendliness,eﬃciency and availability

0.13

0.47

Food and beverage

Property condition

0.00

Property age: Outdated or
new vs. old or remodeled

LuxuryUpper upscale

Food and beverage was adetractor for most, especiallyin economy

0.04

-0.64

Breakfast, food qualityand dining experience

UpscaleCustomer service was a sourceof increased satisfaction,
especially at lower chain scales

0.01

Chain scale agnostic

Upper midscale

Midscale

Economy© 2024 ZS | 4

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FIGURE 4:

Drivers of score shifts—impact for all concepts across chain scales (2021-2023)
2021-2023
Key drivers for satisfaction

Prioritized features

Positive change in contribution

Negative change in contribution

CleanlinessDirty, clean, dusty, ﬁlthy,
neatness and room andproperty cleanliness, etc.

0.12

Cleanliness has become asource of satisfaction acrossall chain scales and is asigniﬁcant improvement fromthe pandemic

0.15

Price0.02

0.00Base rate, oﬀers, extra fees,
resort fees and taxes, etc.

Property amenities
Pool, gym, spa, sauna, ﬁtness
center, common area and club

0.00

-0.05

Room
Bathroom, bed, living space,balcony and microwave

Post pandemic, middle tierchain scales suﬀer the mostwhen it comes to the room

-0.02

-0.26

Upscale and luxury are theonly chain scales withincreasing satisfaction from
customer service

Customer service
Demeanor, friendliness,eﬃciency and availability

0.10

-0.23

Food and beverage
0.06

Breakfast, food qualityand dining experience

Property condition-0.02

Property age: Outdated ornew vs. old or remodeled

LuxuryUpper upscale

Upscale0.50

Food and beverage,
particularly for midscale, has
become a meaningful sourceof satisfaction

0.00

Chain scale agnostic

Upper midscale

Midscale

EconomyGuest satisfaction impacts by chain scale
We separated the highest impact categories from the waterfall chart by chain scale. For thesecharts, we highlighted the four most impactful categories in 2019-2021 (Figure 3) and 20212023 (Figure 4). The line in the middle indicates zero change in impact on satisfaction, so pay
attention both to what side of that line the highlight is on and the spread between the chain
scale diamonds. You can see that in 2019-2021, cleanliness was a challenge for all chain scales
but particularly for midscale. In 2021-2023, the trend reversed, with largely similar positive
impacts across chain scales. Food and beverage was a detractor for all chain scales in
2019-2021, with a particularly large negative impact in the economy chain scale. All chain
scales recovered in 2021-2023, with midscale leading the way in terms of satisfaction.
It’s important to note that while the change in impact may have varied by chain scale, thesame four elements were impactful for all chain scales.

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Understanding hotel satisfaction drivers
We next took a deeper look at the top four categories to get a better sense of whichcleanliness, food and beverage, room and customer service components matter toguests and affect their overall satisfaction with their hotel stay. There were a variety of
subcategories under each of these larger categories, but only a few of them drove positiveor negative impact.
FIGURE 5:Impact scores by subcategory across chain scales
2023 impact scores by concepts—Impact for top concepts across chain scales
Demeanor of customer service

Breakfast

Concepts
helping
customersatisfaction

Room quality

Staﬀ service

Room size

Room cleanliness

Property cleanliness

Concepts
hurting
customersatisfaction

Bathroom

FF&E

LuxuryUpper upscale

UpscaleUpper midscale

Midscale

EconomySource: ZS Atlas Intelligence, hospitality. Relative impact in 2023 (indexed metric ranging from -100 to 100 thatmeasures the average impact a concept has, positive or negative, on the five-star review rating)

While the impact by chain scale may vary slightly, the subcategories in Figure 5 matter for all
chain scales. Figure 6 shows the order of magnitude of the impact on satisfaction for eachsubcategory by chain scale from most positive impact to most negative impact.

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FIGURE 6:

Impact subcategories by chain scale, from the most positive tothe most negative impact

LuxuryUpper upscale

UpscaleUpper midscale

Midscale

EconomyDemeanorof customer
service

Demeanorof customer
service

Demeanorof customer
serviceBreakfast

Breakfast

Demeanorof customer
service

Room quality

Breakfast

Breakfast

Demeanor ofcustomer service

Demeanorof customer
serviceBreakfast

Breakfast

Room quality

Room quality

Room quality

Room quality

Room quality

Room size

Roomcleanliness

Room size

Room size

Staff service

Staff service

Roomcleanliness

Dininglocation

RoomcleanlinessRoomcleanliness

Room size

Room size

Room location

Bed

Dininglocation

Bed

RoomcleanlinessRoomcleanliness

Bed

Property
cleanliness

Bed

Dining location

Property
cleanliness

Propertycleanliness

Property
cleanliness

Efficiency ofcustomer
service

Efficiency of
customer
service

Property
cleanlinessBathroom

BathroomRoomfixtures,furniture andequipment(FF&E)

FF&E

Efficiency of
customer
service

Bathroom

Property
cleanliness

Efficiency of
customer service

Bathroom

FF&E

Bathroom

Bathroom

FF&E

FF&E

FF&E

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It struck us that not only are these subcategories consistent, but they also are core to thehospitality experience. The elements of the stay that guests value have not materiallychanged since the pandemic, even if their booking behavior, stay patterns and amenity needsshifted. Hotels still must deliver friendly and efficient service and a clean, well-provisioned
room. Breakfast remains the critical component of the food and beverage experience.

So, what do we do about it?
The results so far, while interesting, also are high level. Given time and resource constraints,
hotels should prioritize the highest impact interventions. A detailed understanding of thedrivers is crucial. When we did a deeper analysis, we uncovered important nuances in guest
expectations by chain scale.

Breakfast
At all chain scales, guests’requirements for a satisfactory
breakfast are straightforward.
They appreciate a good variety ofitems, including cereal, yogurt, fresh
fruit and hot breakfast options
such as eggs and waffles. At thehigher chain scales, where breakfast
is not included, variety and quality
need to be aligned with pricing.
If these expectations aren’t met,
guests are quick to complain, andtheir overall satisfaction with thestay is affected.

CleanlinessAt all chain scales, guests focus
on clean bathrooms and bedding
quality. At the upper chain scales,
guests generally appear to besatisfied with the current cleanlinessand bedding quality.

ServiceGuests at lower chain scale hotels expect
friendliness and accommodation. Being greetedwith a smile at check-in has an outsized positive
impact on satisfaction, as does receiving prompt
attention when problems arise during the stay.
Not surprisingly, guests at higher chain scales
expect proactive service, and they appreciate apersonal connection with staff.

FF&Es
At lower chain scales, guests expect airconditioning. When it’s not functioning properly,
it has an outsized negative impact on satisfaction.
Guests also comment on the toiletries and tend to
be dissatisfied overall with the offerings. At higher
chain scales, the availability of a refrigerator is asatisfier in 2023, possibly driven by a change instay patterns as people are more likely to be
traveling with family or staying for longer periodsof time. Towels also are frequently mentioned,
and guests notice when they are old, fraying
or not replaced frequently enough.

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The main advice we have for hospitality leaders trying to navigate the headwinds theindustry faces in this return-to-normal period is quite simple. Don’t lose sight of the service
experience. Guests are looking for value, and the value elements that are important to themremain core to the hospitality experience. Continue to price to demand, but don’t let up on
the on-property experience. Remember, there are two sides to the value equation.
Of course, doing this is a bit more complex. You need to keep a close eye on guest feedbackand be able to dynamically identify topics and trends as they surface and at a sufficientlevel of detail that allows you to focus your corrective efforts. It’s not enough to know thatbreakfast is important. Rather, what about breakfast do guests value and how are youdelivering compared to the competition? The more detailed your synthesis of the voice ofcustomer is—and how it ties to the outcomes you care about—the better able you’ll be totake action to make a difference.

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About the authors
Kelly McGuire is a principal in ZS’s Washington, D.C., office with two
decades of experience helping hospitality and gaming companies
implement data-driven decision-making through strategic investment
in technology, people and business process redesign. Her backgroundincludes practical implementations of advanced analytics, AI andmachine learning. Kelly has worked for leading global hospitality
companies. She earned a doctorate from Cornell University’s Schoolof Hotel Administration and has authored two books.
Russell Evans is a principal in ZS’s Chicago office and leads the B2C
go-to-market practice area. He has extensive experience leveraging
data and analytics as a foundation for growth strategies, new products
and services, user experiences and cross-channel customer engagement.
Russell has worked across a number of industries, including packaged
goods, technology, retail and hospitality. Russell holds a degreewith highest honors in ecology and evolutionary biology from
Princeton University.
Satvika Ananthanarayan is a leader in ZS’s travel and hospitality
practice. Satvika works with clients across travel and hospitality brands
to develop customer-centric solutions to B2B sales and marketing
challenges. She brings her deep expertise in consumer marketing andinnovation at a Fortune 50 company to her clients to build marketing andgo-to-market strategies. Satvika holds an MBA from Kellogg School ofManagement at Northwestern University.
Brandon Rufer is a consultant in ZS’s Chicago office and member
of its travel and hospitality practice, which helps hotel and airline
clients rethink their commercial and customer engagement strategies.
Throughout his career, Brandon has worked with Fortune 500 companies
on engagements ranging from strategy development to go-to-market
execution, loyalty and customer activation. Brandon holds a B.S. fromthe University of Wisconsin-Madison.

© 2024 ZS | 10About ZS
ZS is a management consulting
and technology firm focused ontransforming global healthcare andbeyond. We leverage our leadingedge analytics, plus the power ofdata, science and products, to help
our clients make more intelligent
decisions, deliver innovative
solutions and improve outcomes forall. Founded in 1983, ZS has morethan 13,000 employees in 35 offices
worldwide.
Learn more: www.zsatlasintelligence.com

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