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Jennifer Robison

MGM Mirage grace under disaster

4 February 2008

LAS VEGAS, Nevada -- What a way to get a hotel-room upgrade.

When Steven and Randie Siegel arrived at the Monte Carlo Jan. 24, they checked into one of the hotel's standard rooms on the 25th floor. But a fire the next day forced the Maryland couple out of the Monte Carlo -- and into some seriously posh digs at MGM Mirage's Signature high-rise development at the MGM Grand. Their new accommodations featured a flat-screen television, a Jacuzzi tub and a kitchenette, among other amenities. And the Siegels didn't have to pay a dime for the suite, as MGM Mirage picked up the tab for the rest of the couple's five-day stay.

Disasters can cost a company legions of customers and imperil its survival. Handled poorly, a calamity can send clients fleeing to competitors. But catastrophes also provide businesses with opportunities to show off their best customer-service chops. Companies who get it right can secure loyal customers for life, experts say. The secret: being equitable and honest, and communicating with employees in advance about processes during a disaster.

"There's one overriding command, and that's to treat the customer like you'd like to be treated," said Don Peppers, a founding partner of customer-service consulting firm Peppers & Rogers Group in Connecticut. "That might mean giving up a short-term opportunity to make a profit in exchange for being open and fair with customers."

Earnings were the last thing MGM Mirage executives worried about in the Monte Carlo fire's aftermath, said Alan Feldman, senior vice president of public affairs for the company. The company had to transfer roughly 5,000 guests to other local hotels, and keep them happy in the process.

To understand customers' needs, MGM Mirage's managers asked themselves what they'd need in similar circumstances, Feldman said. New rooms, medications and clothes topped their list. The company gave fresh hotel rooms gratis to Monte Carlo guests, and employees worked past midnight picking up prescriptions for customers who'd left their medications in their luggage inside the hotel.

For the few Monte Carlo guests who couldn't retrieve their belongings before late Saturday, MGM Mirage told them to buy necessary clothes and submit an expense claim to the hotel. The few receipts that have trickled in have all been reasonable, Feldman said, and some of them have come attached to "the nicest" letters praising the company's professionalism during the fire.

The assistance hasn't been cheap, but Feldman and other MGM Mirage executives consider it an investment in protecting the company's customer base.

"If you make the mistake of trying to control the financial hit you are going to take, you might as well try to hold a wave on the sand," he said. "You're much better off thinking about the long term, and thinking about how you'd want to be treated in those circumstances."

For the Siegels, the Monte Carlo's customer care following the fire didn't end with the upgraded room.

The company bought and delivered a 30-day supply of the couple's medications -- an expense of about $700 for out-of-plan purchases, Randie Siegel said. And a porter accompanied the couple up to their room on the 25th floor to help them collect and carry their bags late Friday night.

"I personally thought they did an excellent job, and that everyone was as kind and as helpful as they could be," Siegel said.

Christina Redden, an Indianapolis resident staying at the Monte Carlo with friends and family for her 23rd birthday, also appreciated her alternate hotel. MGM Mirage transferred Redden's party to Mandalay Bay, where they "had a really good experience" and were "treated very well," Redden said.

Peppers, who doesn't have a business relationship with the Monte Carlo or parent company MGM Mirage, called the resort operator's offer to comp guests' stays in other, sometimes-upgraded rooms "terrific, and above and beyond."

"There's a lot of academic research into how customer trust is lost and recovered, or not recovered," Peppers said. "One of the main findings is that good behavior is the only sure and true way to recover trust. It doesn't matter what you say and don't say, or how many things you promise."

The Monte Carlo fire is not MGM Mirage's first brush with disaster.

A four-day power outage at Bellagio in 2004 sent managers scrambling to relocate at least 1,500 guests. The blackout cost the company millions of dollars in revenue, as the gaming floor shut down and attractions such as Cirque du Soleil's "O" closed. But it also helped the resort operator know how to work with customers after the Monte Carlo burned.

From Bellagio's experience came disaster-preparedness refinements such as the assembling of a relocation team, a group of employees designated to spearhead guest moves in an emergency. The power outage also taught MGM Mirage executives the importance of giving patrons information as clearly and quickly as possible. And Monte Carlo managers will borrow some of Bellagio's reopening strategies, which recreated some of the excitement of the hotel's 1998 launch.

Though they gave solid reviews to MGM Mirage's mid-disaster service efforts, the Siegels and Redden have a few loose ends they'd like tied up.

Steven Siegel developed painful leg cramps from his 25-floor trek down Monte Carlo's stairs. He bought a massage at the MGM Grand to ease the pain; Randie Siegel said she plans to write a note to the hotel to ask if the company might help cover the service. She also hadn't been able to determine as of Tuesday whether some bills she'd dropped in the Monte Carlo mailbox on the morning of the fire were collected.

Redden said she and her parents are uncertain how much they'll have to pay for their hotel stay. The post-blaze room at Mandalay Bay was free, but Redden said the family might have to pay for their first night's stay in the Monte Carlo, the evening before the fire. It's an expense she's not sure is fair, because the fire "ruined" their trip.

Still, MGM Mirage has seemingly retained both customers' business.

The Siegels would stay again at the Monte Carlo, because they like its layout and its easy access, Randie Siegel said.

Redden said she's not likely to stay at the Monte Carlo again, because she would rather get a feel for the variety of hotels on the Strip, but she praised her time at Mandalay Bay.

MGM Mirage could deploy promotions to ensure that more Monte Carlo guests are willing to take another chance on the property and its sister resorts, Peppers said. With computerized customer records, it should be relatively easy for the company to send out electronic coupons for discounts on future visits, for example.

Feldman said MGM Mirage officials are drawing up special offers now, with details available in the coming weeks.

Such deals are essential to making inconvenienced patrons feel that they've been made whole, Peppers said.

"Customers don't have a right to expect to profit from a disaster," he said, "but the company doesn't have a right to expect customers to share in the costs of a disaster. It needs to be the company's cost."

MGM Mirage grace under disaster is republished from