What customers must & mustn't notice

The challenge in these times for Service providers is to get customers not to notice the 'corners cut', and to get them to notice any drop in prices.

Take the Hospitality industry for example. Hotels are hoping that the cutbacks (fewer toiletries in rooms, longer check-in lines and fewer freebies like cookies or 24 hour-a-day coffee in lobbies for guests) will go largely unnoticed by guests. They also are dropping rates to keep customers coming back. According to Smith Travel Research, a lodging-industry research firm, the average daily room rate in the U.S. fell 2.5% in November from a year earlier. At the luxury end the fall was steeper -- down 6.6%. The declines came as hotel occupancy rates industry wide fell 10.6% in November from a year earlier.

Finding ways to trim costs is more challenging for high-end properties that cater to demanding guests who might be paying in the neighborhood of $700 a night. Well, its a tough call, indeed.