Interviews.

Negotiable room rates: giving guests the power

Ken Cruse is the Co-Founder and CEO of Soul Community Planet, which recently entered the hotel market – offering holistic hospitality and negotiable room rates based on the guest’s experience. We explore how this approach works

by Nicola Donovan, Click. Travel Writer, Booking.com

Topic: Guest experience Revenue management

Click. Takeaway

  • Fair price trading offers guests the opportunity to pay what they feel is a fair price for their experience
  • Research has shown that businesses which place social and environmental value above bottom line typically generate higher profitability
  • Fair trade pricing incentivises guests to let the property know if anything went wrong, giving hoteliers the direct opportunity to correct the issue during their stay

Ken Cruse, Co-Founder and CEO of Soul Community Planet

Sustainability and wellness are increasingly influencing consumer decision-making, creating a shift within the hotel landscape. What can Cruse’s approach to holistic hospitality teach the industry, especially when it comes to enhancing the guest experience? And what can others learn from Soul Community Planet (SCP) Hotel’s unique payment program?

Click.: How would you describe the concept of Soul Community Planet Hotel?
Cruse: The goal of Soul Community Planet is to make the world a better place by serving those who value personal wellness, social good and the environment. Based on those three core values, we are able to address a committed and growing demand base that is really under-served – not just in the hotel market, but in the hospitality industry in general. We think of SCP Hotels as multi-faceted, not just as accommodation. We provide a larger fitness experience than traditional hotels, co-working spaces, a locally-sourced market and unique experiences like artist workshops.

Click.: SCP Hotels offer fair trade pricing for guests, how does this approach work?
Cruse: The basic idea behind it is that guests pay what they feel is a fair price for their experience, rather than the traditional approach. We flipped that relationship and have put all the control and authority in the hands of the guests. We have a suggested price that we publish, but if guests feel their experience were not aligned with their expectations then they can negotiate the price at check-out.

Click.: What was the idea behind shifting from the traditional pricing method?
Cruse: We try to innovate in a lot of different ways with SCP. There are innovations that can be made in all aspects of hospitality, pricing is really one of them. One big driver with fair trade pricing was, and it’s been proven, that businesses which place social and environmental value above the bottom line typically generate higher profitability. Another factor was the fact that we are an unbranded hotel and yet we position ourselves as a direct alternative to other properties, so we looked at fair trade pricing as a mechanism to incentivise consumers to choose us.

Click.: What are the benefits associated with this approach?
Cruse: It holds us accountable to provide a great guest experience, which is unbelievably important. We request that upon negotiation, guests give us any feedback they’re willing to provide so that we can continue to improve, it’s a valuable interchange.

It holds us accountable to provide a great guest experience, which is unbelievably important

A big part of our continual self-improvement process is that our guests themselves help us to refine our experiences. In all hotels, there will occasionally be guests that don’t quite have their expectations met and if there’s not a direct, easy way for those guests to have their concerns addressed, often times they’ll leave dissatisfied and likely not come back, or write a bad review as a result. Through fair trade pricing, we’ve created a mechanism that incentivises our guests to let us know if anything went wrong in a very comfortable and expected way. Then, we have a direct opportunity to correct the issue during their stay.

Click.: And the risks?
Cruse: As for risks, we do ask for a credit card and make sure there’s an ability to pay upfront, that’s important to avoid people abusing the system. If there are people who truly don’t intend to pay, we want to make sure they’re not using fair trade pricing to simply get a free hotel room. It’s meant to be a very equitable transaction with the guest.

Click.: What are the key ingredients to ensure a great guest experience?
Cruse: The way we ensure it, or endeavour to ensure it, is to start with a terrific team that embody our values. Additionally, providing products that are very different from what guests might expect from a hotel is often a welcomed surprise. For example, we have found over time that if you have a wonderful fitness experience that goes beyond the normal hotel standard, you tend to attract a specific clientele that will pay a higher price to stay since you’re giving them the opportunity to engage in a broad range of experiences.

Click.: By giving guests the power to negotiate the price of their stay, how can you still ensure profitability?
Cruse: We don’t lead with the concept of driving profit, but we do offer a range of experiences that guests can purchase during their stay – from fitness and training classes to locally-sourced consumables and artist workshops. Individuals will make purchases that help define who they are or who they aspire to be. Ultimately, they’re going to buy what they feel good about, they may be willing to pay a higher rate for those type of experiences and that translates to better profitability. It’s not a direct correlation, rather an indirect one. We certainly don’t want to make the point that we’re not about making profitability, profits are important as they enable us to do even more good for our guests and for the world. The good news is, to date we’ve only ever had one guest ask for a fair trade pricing discount of only US$15, and it was related to a legitimate issue.

Hero image: Credit to Stockpik.com, Pexels

Nicola Donovan is a travel writer for Click.

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