Loyalty in the travel industry is more important than ever. Data
from Expedia Group’s 2023
Traveler Value Index indicates that more than half (53%) of travelers
enrolled in loyalty programs say that it is now more important when traveling to
stay with providers where they are a member than it was pre-pandemic. More than
half (52%) of consumers most value discounted pricing from their travel loyalty
programs, creating a tremendous opportunity for travel providers to optimize
their pricing strategies with compelling offers that attract and retain high-value
Hotels are facing a pricing conundrum
It’s a challenging time for hotel revenue managers.
Travelers want more value for their money, and hotels need to reduce costs and
drive revenue. While managing a range of channels can add complexity, it allows
for experimentation at scale. This approach gives revenue managers more
opportunities to tailor offers and pricing strategies to attract their ideal
Building discounts into your revenue management strategy
Though it may seem counterintuitive to maximizing revenue,
offering discounts with Expedia Group’s Members Only Deals can return dividends
for hotels and reduce costs.
Travel partners gain more bookings from the most
sought-after, high-quality travelers who book earlier, stay longer and cancel
less frequently. They are a great way for partners to diversify and expand
their reach to their most valuable audiences, giving them a chance to delight
them on-site to create loyal guests and drive repeat business. Members Only
Deals also support more effective revenue generating strategies and give travel
partners a competitive edge by taking a targeted approach to accelerate deal
performance and maximize revenue.
Offering deeper discounts helps drive better sort position
for hotels in Expedia Group’s marketplace, which in turn drives higher visibility,
better conversion and more production. Hotels also always have the flexibility
to ramp offers up or down based on business needs and travelers can get great offers.
Expedia Group’s improved Members Only Deals target the right traveler
Expedia Group members are those travelers signed into their
account or app or via an agent booking tool. With loyal travelers increasingly
seeking perks, special deals and upgrades, Expedia Group’s Members Only Deals are an
effective way to get their attention and strategically prioritize high-value members
who spend more and book more frequently than non-members on Expedia Group sites.
Revenue managers can also utilize Expedia Group’s improved Members
Only Deals to target specific loyalty tier audiences – Blue, Silver or Gold
members – and ensure that the right deals are surfaced to the right travelers. This
approach allows hotels to customize their offerings based on different loyalty
tiers, rather than a one-size-fits-all strategy. Members Only Deals are
distributed within a fully fenced environment, giving hoteliers the option to customize
offers within each traveler tier resulting in greater visibility, flexibility and incrementality in the offer process.
Benefits for all property types
Each hotel has different needs and a unique pricing strategy
depending on attributes such as size, location and star-rating.
For example, a small independent hotel on the outskirts of a
big city may already offer competitive pricing but needs targeting capabilities
to enable more effective revenue strategies and beat out local competition. A Members Only Deals strategy could focus on targeting Blue tier travelers, who on average
spend 5% more per booking and book 1.2 times more than non-members, according to
Expedia Group internal data.
A larger chain, on the other hand, may be looking to optimize
its promotions strategy with customized offers for higher-value traveler
segments while ensuring offers are properly fenced to drive incrementality. In
addition to targeting Blue tier travelers, this chain can also focus on sending
a targeted Members Only Deal to Gold tier travelers, who on average spend 16%
more and book 7.8 times more than Blue tier members.
Happy travelers make for happy hotels
Members Only Deals create a win-win for travelers and travel
providers. The higher-value traveler audience is increasingly interested in
special benefits when booking accommodations, and hotels need to deliver if
they want to convert these travelers. With Members Only Deals, hoteliers have
more tools to maximize their profitability; and travelers get more bang for
their buck, increasing their likelihood to return time and time again.
About the author ...
Rachel Bird is vice president of account management for North
America at Expedia Group