From personalised local experiences to hotel stays that can be gifted to friends, today’s guests demand much more from their hotel loyalty programmes
The hotel industry is undergoing a period of dramatic change. A number of dominant forces are driving its involuntary evolution, from the distribution tactics of third-party Online Travel Agencies (OTAs) to the growing influence of accommodation-sharing services like Airbnb.
Hoteliers have been forced into a relentless battle where the onus is to streamline operations and innovate guest experiences in order to retain business. The explosion in social media and peer-to-peer recommendation and review websites such as TripAdvisor has also given the industry a rude awakening, highlighting the need for hotels to engage, inspire and respond to guest praise or criticism 24 hours a day, seven days a week.
Sisemic shifts in guest sentiment have driven a sales and marketing strategy overhaul in an age where travellers demand personalisation. It’s led to the emergence of a new breed of hotel loyalty programmes where the focus is customisation, flexibility and simplicity, facilitated by technology.
Loyalty cards and obsolete points are a thing of the past as jaded travellers demand a travel experience that’s seamless and personalised to their unique requirements. Hotels nailing this new way of rewarding guests are not only generating loyal customers, but an army of brand advocates who share their positive experiences with their peers.
Look to the Millennials
“There is a distinct difference between a hotel customer who has enrolled in a loyalty programme and a customer who makes regular, truly loyal uses of the brand because of it,” notes Deloitte in the research firm’s recent ‘Winning the race for guest loyalty’ report. “For most customers, only one brand ‘wins’ – and the prize is a dedicated relationship that enhances revenue in the long term.”
It says the journey past that behavioural tipping point is “part science, part emotion”. “To turn your customers into enthusiastic, even passionate brand devotees, you need to understand the patterns in how different travellers view and use rewards.”
Quite simply you must “understand your customers, know what they really value, and deliver rewards that matter to them on their own terms. Established hotels and chains no longer have a competitive advantage over newcomers if they base their appeal on longevity in the marketplace as a loyalty selling point.
This is evidenced by the popularity of new concepts like HomeAway and onefinestay, which have disrupted the competitive landscape. “It’s no longer as simple as ‘which hotel’,” continues Deloitte, highlighting how travellers, particularly the growing population of Millennials, seek flexibility and customised experiences, and now have viable alternatives to hotel accommodation.
Hotels should therefore be tailoring their loyalty programmes to suit the Millennial mindset – a group of consumers who value soft benefits like VIP treatments and authentic experiences as much as cash back and discounts. “They [also] make quick buying decisions and expect quick gratification,” says the report. “More than three quarters expect a loyalty programme to pay some kind of reward within three months.” Millennials also dislike it when hotel brands tell them what to do.
“Instead, they seek the wisdom of the crowd – and the cloud,” says Deloitte. They are rigorous researchers, a trait that has meaningful implications for loyalty programmes. “They do their homework to find the best experience, but if they find a brand that works for them, Millennials are more likely to stay loyal than other generations,” Deloitte adds.
Renewed customer focus
David Henry, vice president of sales, marketing and distribution for AccorHotels Group in the Middle East, believes hotels have spent too much time focusing on the customer from a transactional standpoint only.
The French hotel group has recgonised this and is now taking into consideration the “lifestyle value of the customer”. “At Accor we don’t do loyalty to give points,” he tells HNME. “We believe the battle is the information we need from the customers to be able to anticipate their needs and to move in front of them the right products at the right time in the right location.”
It’s imperative hotel loyalty programmes engage rather than recruit guests, he stresses. “They want us to stand behind our word; when we give a customer promise, they expect us to deliver it,” he says. “They expect benefits without even asking for them and above all, guests want to be recognised.
“The paradigm of 21st century is individualisation. Everyone wants to be recognised as unique.” Henry argues that guests aren’t interested in points, but instead, “they want something different that reflects their passions in life; unique experiences”. Accor’s answer is to develop an elite experience programme for cardholders.
“We are organising one-off events for them, recognising them as unique people.” For instance, last year the hotel group organised a four-hour Star Wars preview event for elite members at one of its Sofitel properties, to coincide with the hotly-anticipated release of The Force Awakens. “It shows how you can be agile and recognise guests with something that’s meaningful to them,” says Henry.
Accor is also launching La Collection – a programme of activities provided by “like-minded brands” that enables members to earn points. In terms of rewards, Henry says hotels should look to some airline models and offer practical value-adds like upgrades, express check-in, and upgrades, while in-house staff should know their repeat guests’ specific needs.
He’s also an advocate of rewards based on the “dreamstay concept” – “offering an experience you wouldn’t necessarily ‘buy’ without points”. Henry says social media is an essential facet of any customer loyalty strategy – a channel through which you can tell a brand story and drive emotion.
“Guests no longer want the guarantee of a clean bed – that’s a given – but the guarantee of an emotion or an experience,” he says. “If they get the experience they will share it [on social media]. If they don’t get the experience they will look somewhere else for it and then we lose their loyalty.”
‘Experiences’ is certainly the buzz word amongst loyalty programme marketers right now. Marriott Rewards recently introduced three new benefits designed to make it easy for members to “explore the things they love and experience travel to the fullest”.
The first is the ‘experiences marketplace’, giving all members access to a collection of unique, curated experiences; the second is the ‘Elite concierge service’ providing members with a dedicated concierge to make their travel experience seamless and tailored; and the third is the late check-out guarantee for Gold and Platinum Elite members. “Giving our members even more flexibility, freedom, and opportunity to enjoy what they love most about travel – and life – is one of the best ways we can show our loyalty to them,” says Thom Kozik, vice president of loyalty at Marriott International.
Meanwhile Wyndham Rewards launched a new ‘Member Levels’ concept last month, which allows members to take advantage of a range of benefits that increase as they work their way up through four distinct levels – Blue, Gold, Platinum and Diamond. They include go freeSM PLUS and go fastSM PLUS where members earn discounts on “fun and engaging experiences”, from cooking classes and desert safaris to city tours or theme park visits.
There are no blackout dates or restrictions and experience perks are complemented by a number of additional value adds such as free Wi-Fi, rollover nights, early check-in/late check-out, room upgrades and welcome gifts.
Even Blue-level members get instant rewards while at Diamond level, members can gift benefits to a friend, explains Jude Kadhim, director of loyalty EMEA, Wyndham Worldwide. “The ‘Member Levels’ concept puts customers first,” he says. “It’s a programme that’s simple, generous and attainable. It’s not just for the well-travelled or the high spenders.
“We know our members want to experience local amenities and activities and we are enabling them to unlock those when they redeem points.” Similarly, iPrefer, the world’s first points-based loyalty programme for global independent hotels, has been revised in 2016 to offer “more instant benefits to all members”, making it easier for loyal guests across all tiers to earn points and rewards, explains Saurabh Rai, executive vice president, Preferred Hotels and Resorts.
“The benefit changes were centered on three goals for members: simplification, engagement, and progression,” he says.
There’s a simplified structure featuring just two tiers – Insider and Elite – and points can can earn free nights, on-property spa and dining experiences, or benefits like early check-in/late check-out and complimentary internet.
Rai says inducing guest loyalty is “synonymous with facilitating customised and unique experiences”. “We are focused on knowing our guests and their preferences intimately. The Preferred brand is all about individual and signature independent hotels and resorts, and iPrefer is the common thread that binds these unique experiences in key business cities and resort locations worldwide,” he explains.
“For instance, for our Middle Eastern patrons, we see our programme as the gateway to best-in-class independent experiences that celebrate life and travel in all key primary and emerging outbound destinations around the world.”
These range from family-friendly holidays and memorable honeymoons to iconic city breaks and spa retreats. “Experiences are indeed the new social currency,” says Rai.
Business generated through the iPrefer loyalty programme has increased more than 100% since 2013 when more benefits were added, Rai reveals. “We are seeing 72% of revenue generated at participating properties derived from travellers who enrolled at other hotels, which shows that after trying our brand once, they are hooked and book with us again and again but in different cities and at different hotels,” he adds.
Shangri-La Hotels and Resorts has recently signed a number of “exciting lifestyle partnerships” that aim to deliver guest experiences that go beyond the four walls of its hotels. It’s all part of the group’s Golden Circle loyalty programme overhaul.
“We’ll shortly be announcing a brand new approach to food and beverage loyalty too, enabling members to instantly redeem Golden Circle points in our restaurants and bars, unlocking unique surprises and culinary experiences,” reveals Shangri-La’s vice president of corporate loyalty and partner marketing, Wee Kee Ng. Today’s travellers expect loyalty programmes to mirror “the same level of service, empathy and recognition that they receive in our hotels”, Ng argues.
“Therefore, through our recent ‘LoyaltyIs’ campaign, we set out to take people on a journey to the heart of the true meaning of loyalty, showcasing how loyalty is inherent in everything we do,” he says. The Loyaltyis campaign (#loyaltyis), which celebrated Golden Circle’s fifth anniversary, engaged travellers through five videos that conveyed “meaningful loyalty stories”.
“We had to demonstrate that we shared the same values as our members,” explains Ng. “To build affinity with the audience and to move beyond functional engagement towards emotional engagement, it couldn’t be all about us. We wanted to highlight the broader definition of loyalty – the diverse and emotive definitions that come to mind when you speak to people.
“Therefore, we connected with influencers across the globe and invited them to tell their loyalty stories in relation to their life’s passions. They in turn invited people to share what #LoyaltyIs meant to them. This created unprecedented levels of engagement for Shangri-La and a stream of rich, beautiful and heartfelt articulations of loyalty.”
The focus on emotional results is also reflected in Shangri-La’s loyalty programme research.
“Just as important as functional results (acquisition, spend and engagement) are is how members feel about Golden Circle,” explains Ng. “We want members to feel rewarded and engaged, rather than bribed and exploited, therefore we speak to them a lot, and all insights feed directly into the design of our programme.
According to InterContinental Hotels Group (IHG), guests are seeking both a personalised experience and a sense of community. The group’s 2016 trends report, Meaningful Membership: Transforming Membership in ‘The Age of I’, challenges brands to engage with consumers in a way that builds loyal ‘Membership Communities’. The report argues that for brands to make membership meaningful to consumers, they must know exactly what resonates with individual community members, including their tastes and preferences, what they need and when they need it – and that’s where personalisation comes in. “We’re in ‘The Age of I’ where guests want individuality, but also want to feel included in a club at the same time,” explains James Britchford, IHG’s vice president of sales and marketing for India, the Middle East and Africa.
“To do this, brands need to enhance a member’s personal and social identity by creating a feeling of belonging, while respecting their individuality, as well as ensuring trustworthy dialogues and behaviours within the Membership Community and with the brand.”
A great example, he notes, is how IHG Rewards Club members often donate their points to IHG’s disaster relief efforts.
“Their donations further help support the communities that need it most. It allows members to connect with important issues through the brand, organisation and fellow members,” he says. The IHG Rewards Club aspires to be a meaningful membership programme through the “cultivation of an on-going two-way relationship with members and ensuring personalised experiences based on guests’ needs and preferences”.
In addition to customised offers, members get additional recognition when they stay at different hotel brands in the IHG portfolio, while the recent ‘Accelerate’ campaign offered guests rewards based on their individual buying behaviours.
The company has also introduced a new CRM system that enables front desk teams to personally welcome each IHG Rewards Club member, making the experience more meaningful.“Our aim is to build lifetime relationships with our guests, and this starts with listening to our loyal members and understanding their preferences,” says Britchford.
“The introduction of the new tier Spire Elite for IHG Rewards Club is a great example of this as it was based on the feedback that members wanted to be part of a special ‘club’ and share benefits with family and friends.”
Britchford says that by deepening a member’s relationship with the ‘community’ and moving them up the ‘Loyalty Ladder’, members transition from being a frequent purchaser to a brand enthusiast.
According to Sarah Kennedy Ellis, vice president marketing and strategic development, Sabre Hospitality Solutions, “true hospitality happens when you know the unique expectations of each guest and you find ways to exceed those expectations time after time”. “Taking a holistic approach to understanding each of the steps of the guest’s journey can deliver a cohesive brand experience across digital and offline channels, creating true hospitality that goes beyond their stay – and converts into lifelong loyalty,” she adds.
In order to meet guest expectations, only hotels that plan for “scalable, data-driven solutions will win”, Ellis argues. “Hotels whose solutions are integrated and seamless will be more competitive in a market where quality of guest experience is a primary driver of both customer loyalty and revenue,” she continues.
Hoteliers must become customer-obsessed in order to drive loyalty, using technology to deliver “personalised and seamless omni-channel experiences”. Ellis advises hotels to study what consumers “want, feel, need, believe and desire” across their travel journey in order to provide them with the most “sartorial travel experience”.
She adds: “Traveller loyalty tomorrow will be based on who wins the ongoing battle of guest experience and personalisation today.It isn’t just about a programme, points or perks. It’s about relationships, especially in the age of the customer, where the relationships thge hotels have with their customers are the greatest source of differentiation.”