Hospitality and dispute resolution; a recipe for success?

“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” Maya Angelou 


Handling customer complaints - a piece of cake?


By its nature, the hospitality industry is about being welcoming and delivering high quality services. And these are the things that matter most to customers of hotels, restaurants and bars. The level of service customers receive, the comfort and quality they experience, the value for money they get, the level of hospitality - all impact on a customer’s desire to return.


But as in any vibrant, competitive, innovative industry, and especially one that relies on the level of personal service delivered by staff, things can and do go wrong, and complaints will inevitably arise. Most of these are dealt with on the spot or soon afterwards by the businesses concerned. But some won’t be.


Many businesses pride themselves on not only business performance but on the level of customer service provided. Good quality service is one of the biggest reasons why consumers return and what they tell others about their experience.


And in an industry where many consumers use the internet and social media to source information on hotels and restaurants, so many customers use the same technology to air their grievances. We live in an age where technology and social media allows one person’s thoughts and experiences to be read within seconds by large numbers of people around the world. This can be a powerful communications tool for businesses as well as consumers, for both good and bad.


Unfortunately, when a customer has something negative to say, it’s crucial for businesses to engage with those customers before things go viral. As in any industry, if you lose control of the complaint, you lose control of the damage.


The social media response to a complaint that went viral!


Complaint management is a specialised skill; and in a sector that prides itself on delivering a commitment to quality service negative criticism is something we would all like to avoid as it can impact on businesses reputation and hit the bottom line.


Mention 47 King Street West, and many people will remember the restaurant in Manchester that achieved notoreity through its responses to negative criticism on Facebook.


The response to the way the complaint was handled was regretted by the restaurant. But as the national press articles show, the damage was done. In the hospitality industry you only get one chance to put the complaint right.


EU ADR Directive


Alternate Dispute Resolution (ADR)


You may be asking yourself, “…what directive?”  Rest assured that you‘re not alone. However, Ombudsman Services  is here to help you gain an understanding of the directive, its requirements and the impact it has on your business.


The new legislation allows consumers and traders to solve their disputes without going to court, in a quick, low-cost and simple way.


The ADR Directive will ensure that consumers can turn to Ombudsman Services as a certified ADR entity for all kinds of contractual disputes that they have with traders; no matter what they purchased.


The directive and its supporting instruments became law as of 1 October 2015. Whilst it does not require businesses to use an ADR provider to deal with unresolved disputes or complaints, it does require all businesses to signpost consumers to ADR or state that they are not using ADR within their complaint handling process.


The new legislation makes it easier for consumers to complain about unsatisfactory service from businesses that sell goods or services to consumers. The legislation strengthens consumer powers by requiring all UK businesses to tell dissatisfied customers how to contact a recognised dispute resolution service, like Ombudsman Services.


Key Points

Nothing in the new legislation makes ADR mandatory for any consumer or trader.


However, from the 1 October 2015:
• All businesses that are legally obliged (or have committed) to use a certified ADR entity must provide information about that entity on their website and in any contractual terms with consumers; and

  • All businesses (regardless of whether they are committed to using ADR or intend to use it) must, in the event of an unresolved consumer complaint, signpost the consumer to an appropriate certified ADR provider and advise whether or not the business agrees (or is obliged) to use ADR in the dispute.


Under the directive the significant changes to consumer law in the UK and Ireland promote access to ADR for all consumer transactions. This means you are now required by law to signpost consumers with unresolved complaints to a certified ADR entity regardless of whether you agree to use it.



If a business fails to comply with its information requirements, trading standards officers can apply for a court order requiring the business to comply. Potentially, non-compliance can lead to an unlimited fine or imprisonment.


Why use an ADR provider/scheme?


You may be thinking, we don’t have to use ADR, so why should we?


The answer is you don’t have to and it is not compulsory, but you do have to provide information on ADR. By referring to an ADR provider in your complaints process you are confirming that you are compliant with new laws and your service is up to the independent scrutiny of an ADR scheme. This reinforces that  you take your customer service seriously, giving confidence to consumers that you’re happy to escalate a complaint to an independent third party. You also have the reassurance that you have done all you can to resolve the impasse.


ADR is not just about complaint resolution but it is also about strengthening your brand and market position when it comes to the service provided. By using ADR you don’t just resolve disputes but you can effectively turn negative experiences into positive ones, retain customers and secure repeat business.


Whilst we know we cannot always make everyone happy, we can assist in how an experience or perception can be changed due to the way in which it is handled.


Providing customers with clear information about what to do if they have a complaint is crucial to bringing control back. Clear signposting to someone who can help provide a quick and simple solution is key to that. It’s those customers who must now be given information on where they can take their complaint next.


But there is more


Outside of the scope of ADR


Not only can Ombudsman Services assist with your consumer disputes, but we also offer business to business dispute resolution. Our  mediators can aid and facilitate resolutions when those commercial relationships have broken down, such as issues with suppliers to building management, commercial rent and parking disputes.


Growing amounts of case law illustrate the  courts intolerance of litigants who refuse to engage with ADR. Procedural rules allow a court to penalise a party whose refusal to mediate is held to have been unreasonable.


Our business to business service is available to use on an ad hoc basis by businesses engaged in commercial or higher value consumer disputes, either by agreement or by the activation of a contract clause.


We launched the service on 2 September 2015. The initial service offered by us is mediation, and we will add arbitration, commercial adjudication and other innovations over the coming months. In addition, we will provide guidance to those businesses that have a dispute but have not been involved in commercial ADR before.


Ombudsman Services: Business to Business will be open for all to use to reduce the risks associated with litigation, ensuring cost-effective private resolution of commercial disputes and consumer disputes of a higher value. Contact the business team at Ombudsman Services for more information.

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