Hotels Have a Growing Guest Loyalty Problem … and They May Not Even Know It
By Terri Miller, Chief Executive Officer & Co-Founder
“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” – Jeff Bezos
The ability to inspire guest loyalty is, without a doubt, a valuable predictor of long-term success within the hospitality industry. Loyal guests bring recurring revenue, and positive reviews, feedback, and recommendations, inspiring a virtuous circle of reward.
However, there has been much discussion as of late alluding to the steady demise of traditional loyalty programs. The question has become less about how to make incremental changes to existing programs, but a larger issue entirely. Is guest loyalty dead?
The short answer is no, loyalty is still very much alive. But the way that many hoteliers and brands have traditionally approached loyalty programs in a pure play “points for stay” manner is fast becoming passé.
According to research by loyalty-focused agency MBLM, travel brands have the least loyal relationships with consumers when compared to other industries. This is also supported by research from Wyndham, which shows that the structure of many hotel loyalty programs leaves travelers “confused and disappointed.”
The challenge with points and redemption-based loyalty models is they’ve become so plentiful they no longer make guests feel genuinely ‘special’, recognized or appreciated, per se. These systems often fail to drive guest engagement, in this respect, and don’t meet the needs of small-to-medium-sized brands looking to make a more personal connection with their guests.
Guests should recognize loyalty with hotels based upon how they are treated by the hotel staff, the hotel brands, and how their needs are met — not by enrolling in a program that simply incentivizes them get more room nights for free.
Ideally, your loyalty program should have the capacity to look beyond transient guests who create a false hierarchy. Further, we have to consider the inclusion of Online Travel Agencies (OTAs). As they promote the availability of EXPEDIA loyalty numbers, or a booking.com number, guests may no longer see the value in expressing conscious loyalty to a specific hotel brand. OTAs typically have larger marketing budgets and can readily undermine traditional loyalty efforts.
Ultimately, in this new era of travel, one-size-fits-all models are failing to impress travelers and establish long-term loyalty or getting drowned out by OTA competition, so what should hotels focus on instead?
The future of hotel loyalty programs should center around personalized experiences and the creation of holistic hotel-to-guest relationships, as curated with the help of insight-driven data. Hotels should have technology in place to know who their most loyal guests are based upon data aggregation per guest, and award loyalty based on spend or night stay loyalty, rather than points. Hotels should be looking to incentivize their best customers to come back—ideally through direct booking—by targeting those guests with personalized, relevant offers each and every stay. The tiers for loyalty consideration could include average spend, positive reviews and online engagement, social media influence, booking behavior and more. With access to a comprehensive guest profile guest profile based on relevant data, these qualifying factors should be within reach for any hotel staff.
With the use of data to create personalized experiences, your hotel can better deliver on your brand promise and the best service possible, while continuously exceeding guest expectations. It is only once hotels begin to see guests as individuals, rather than personas or points collectors, that loyalty can truly be of value once again.
About the Author:
The capability to understand today’s hotel guest is a priority for Concilio Labs. Terri Miller and her team developed a way to leverage hotel and public data to help hoteliers provide exceptional relevant experiences to its guests. As CEO of Concilio Labs, Terri is responsible for driving the strategic and tactical growth of the company, while ensuring innovation is at the forefront when delivering solutions hoteliers truly need. Her wealth of experience in business, management, and technology guides all facets of the company’s success. Prior to Concilio Labs, Terri was the Vice President of MICROS eCommerce leading the creative, delivery, and technical departments. With a passion for delivering results, Terri continues to grow Concilio Labs with a focus on becoming the leader in developing and delivering smart hotel products and services.