In an era of automation and customer service bots, it’s easy to start questioning the importance of customer service in the hospitality industry. It’s one thing for a consumer to not mind the self-service aspect of buying car insurance online, but it’s quite another when it comes to the splurge of being waited on in the hospitality industry. Any business in the hospitality industry is deemed to be a service-based business by default. It includes everything from cruise ships to theme parks, and it’s all about making customers feel welcome during a time of leisure.


Customer service is so important that seven out of 10 consumers will pay more if they know the service is great.

What Is the Hospitality Industry?

Understanding what the hospitality industry entails is a good way to wrap your head around why customer service is the backbone of hospitality success. There are four sectors of the hospitality world and they include:

  • Food and Beverages: The largest segment of hospitality, the name is self-explanatory — from cafes and bars to five-star eateries, anything consumable falls under the F&B bracket.

  • Lodging: Campgrounds and bed-and-breakfasts through to the ritziest of hotels all fall under the lodging moniker, and expectations vary according to price points and variety. A hostel-goer has different standards than someone checking into a Kimpton-style posh hotel.

  • Recreation: The purpose of recreation is to provide a distraction from everyday life. Recreation can be fun, active, educational and more — it includes everything from whale-watching and guided hiking to wine tasting and golfing. Even movie theaters and casinos fall under recreation.

  • Tourism and Travel: This part of the economy is driven by outsiders visiting a region for purposes of work, entertainment, leisure or whatever else prompted their journey. From the cab to the hotel or home rental through to everything they do, eat and experience over their stay is considered tourism and travel. And everything they do, too, will reflect on the three categories listed above. Tourists are likely to spend a bit more and are in addition to the company’s regular trade.

Hallmarks of Excellent Customer Service

Any driver who’s rolled into a gas station for a fill-up and had the gas jockey offer to clean the windows lately is someone who understands the unexpected joy of great customer service. An interesting thing happens when customer service being a top priority is drilled into the staff — job satisfaction tends to go up. That’s among the benefits of good customer service to the employee is they’re being paid to care about doing their job well, but they’re getting the added reward of customers being happy.

Excellent customer service means doing things like:

  • The unexpected or rare: Getting the windshield cleaned was once the bare minimum of customer service, but times have changed in 30 years. Companies win consumer loyalty and kudos simply doing small kindnesses, like carrying bags to a car, sending up a drink on the house to a guest’s room, providing anything that’s remotely above and beyond the norm.

  • Being authentic and likable: Richard Branson’s Virgin Hotels did away with "scripted" customer service for a more authentic and friendly tone — and it’s been a big hit. Today, companies that treat consumers like they’re friends or family are the ones who get the raves in peer reviews.

  • Remembering: When customer service folks recognize and remember previous clients, it’s one of the greatest ways to tell them that, “Hey, you’re valued, we remember you and appreciate your business.” It’s free to perform but pays great dividends. Whether it’s remembering their name, knowing their order or recalling some personal detail — like “So did you make it to the game on time after your last visit?” — it goes a long way to scoring bonus points.

  • Being emotionally intelligent: If someone isn’t friendly, engaging, warm and considerate, then they shouldn’t be in customer service. These are all traits of great hospitality staff.

  • Saying yes, getting it done: Patrick O’Connell, the man behind the double five-star Inn at Little Washington, is famous for creating great customer experiences. According to Inc., when he trains his staff, he teaches a story about a guest who asks the server how big the lobsters were that night. The server replied, "How big would you like it to be?" By asking the right question in response, the server has ensured they make the customer happy with the right lobster.

Empowered Staff Mean Happy Customers

Poor company policies often lead to unsatisfying moments, not just for the consumer but for the staff as well. There’s little more frustrating than knowing how to make a customer happy but having roadblocks in company policies preventing that great outcome. For liability and other reasons, policies make sense, but it’s a Technicolor world, not black and white.

The Ritz Carlton hotel chain is one of the greatest customer service companies in the world, period, and their policy is “It takes empowered employees to deliver great customer service”. To that end, even hourly staff trying to solve a customer’s problems have the green light to spend up to $2,000 to create satisfaction. Granting empowerment means little red tape and resolutions are reached more quickly. And that’s how the Ritz Carlton remains a world leader in delivering excellent service.

But it doesn’t take $2,000 per hour to make people happy. Discounting an unsatisfying meal (or providing free drinks or dessert) is easily done. Statistics show it’s far harder to attract a new client to businesses — and between five and 25 times more expensive! — than it is to retain one through providing great service. That’s one of the effects of good customer service, after all: It creates loyalty and good word of mouth.

The World Is Listening

That "good word of mouth" is no small thing, either. It’s the era of peer reviews and social media and customers getting the word out when they’re happy or disappointed in their experiences. In their deep-dive study on customer service in 2017, American Express discovered that over 70% of consumers knowingly paid more for a service or product, just because of great customer service. In fact, AmEx learned that millennials were the age group most likely to pay more — and willing to pay the most (21% more) — just to get better service.

While peer reviews are important, it’s arguable that everyday social media is more critical to the good health of companies. Studies show 53% of consumers are likely to share a good customer service encounter online, compared to 35% who would share their bad experiences.

That means one out of every two consumers is likely to share online when your company gives great service. And it’s those recommendations that the internet audience is most likely to trust, versus a review on Yelp or Google or Facebook. That’s the ROI of great customer service: It’s all about free advertising through word of mouth and the increased customer retention. There’s no industry where getting that word of mouth is more important than in hospitality, the one industry to which the public turns when they want to feel special or have a great time. Customer service has the power to make that happen.