Researchers: Customer satisfaction with hotel industry falls 5 percent in first quarter
May 21, 07 | 7:58 am
Customer satisfaction with the goods and services that Americans buy continues to improve, but at a slower rate, according to a report released today by the University of Michigan’s American Customer Satisfaction Index (ACSI). The ACSI is up 0.4% to an overall score of 75.2 on the ACSI’s 100-point scale, the highest quarterly national average in the ACSI’s 14-year history.
However, although customer satisfaction growth in the aggregate continues, the rate has slowed and many individual companies measured this quarter are falling behind. Of the companies measured in the first quarter of 2007, the ACSI saw more drops than gains in satisfaction.
“In addition to the large number of decliners, the rate of improvement in satisfaction has slowed,” said Professor Claes Fornell, director of the University of Michigan’s National Quality Research Center, which compiles and analyzes the ACSI data. “Companies don’t have much pricing power unless there is shrinking supply or higher customer satisfaction. There are no signs of the former in most industries, so the latter becomes more critical. Companies may begin to see narrowing profit margins unless there is further improvement in customer satisfaction.”
ACSI has consistently predicted future consumer spending and is an indicator of financial performance at both the company and industry level. The latest ACSI data suggest that depending on the impact of consumer debt burden, consumer spending growth will be in the range of 3.1% to 3.9% in the second quarter of 2007.
In the first quarter of every year, the ACSI measures customer satisfaction with the quality of products and services in energy utilities, airlines, express delivery, U.S. Postal Service, hospitals, hotels, fast food restaurants, cable & satellite TV and telecommunications services.
Telecommunications: Cable and Satellite TV Remain Low, Wireless Continues to Improve
The telecommunications sector as measured by the ACSI is made up for four industries: fixed-line service, wireless service, cable and satellite television, and cell phones.
The fixed-line telephone providers maintain a consistent industry score of 70. Qwest and Verizon see slight increases to 72, but Cox drops six points to 70 and AT&T (70) and Comcast (67) drop as well. Embarq improves two points to 66 but remains last in the category.
A second year of improvement in the wireless industry puts it at an all-time high: up 3% to a score of 68. However, even with this year’s gain, wireless service remains one of the five lowest scoring industries in ACSI. AT&T Mobility, the new incarnation of Cingular Wireless, makes a big jump, up 8% to 68, while Verizon Wireless (71) and T-Mobile (70) show gains of 3% and 1%, respectively. But not all wireless providers are on the way up. Satisfaction with Sprint Nextel is falling well behind competition (seven points behind the nearest competitor), and now stands at 61, a 3% drop from a year ago.
The perennially low-scoring cable and satellite TV industry drops 2% to 62, the lowest level of customer satisfaction among all industries covered by ACSI. None of the providers has improved on customer satisfaction this year. Comcast (down 7% to 56), DirecTV (down 6% to 67) and Time Warner Cable (down 5% to 58) all tumble.
In cell phones, Motorola and Nokia both advance to 72, but Samsung falls three points to 70.
Airlines and Hotels: The Trouble with Travel
Trouble continues for the travel-related industries. The ACSI score for airlines falls 3% to 63, its lowest level in 7 years. The same problems that have pulled airline passenger satisfaction down the past few years – disenchanted employees, increasing fuel costs, bankruptcy, and now also record levels of lost, delayed, and damaged luggage – cause it to drop again.
United Airlines suffers the largest fall in satisfaction. Down 11% to 56, United is now the lowest scoring airline by a substantial margin and is in fact, one of the lowest scoring companies measured by the ACSI. Delta (59) also drops nearly 8%. Southwest Airlines stands apart from the rest again this year. Up 3% to a score of 76, Southwest leads the airline business in passenger satisfaction and profitability.
The hotel industry also falls, down 5% to 71, its lowest score since 2002. Most of this, however, is due to a decline among smaller hotel chains. Marriott is the industry leader, up 5% to 79 – its best score since 1994. Hyatt improved 2.7% to a score of 77, while Hilton declined 3.6% to a score of 76.
Restaurants: Sit Down Restaurants Trump the Drive-Thru
The fast food industry is unchanged this year at 77. Only one restaurant, Pizza Hut, registers a significant change – its customer satisfaction score drops by 5% to 72. Starbucks and Wendy’s lead the category with a score of 78 and McDonald’s brings up the rear with a score of 64.
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Source: HotelMotel.com
