Consumer devotion has become the
holy grail of the hospitality industry, and the battle for it is more intense
Whereas not too long ago brands offered monotonous renditions of loyalty
programs with complex and uninspiring earn-and-burn formulas, in recent years
innovation has ramped up - driven by the demands of consumers who can now
easily search and buy with a few clicks.
As a joint Phocuswright/Jumpshot report, The
Battle for Lifetime Value: Customer Loyalty in Online Accommodation,
states, “Given the rising costs of customer acquisition, repeat visitors are
more valuable than ever. While today’s travelers are notoriously fickle, repeat
visitation data suggests that loyalty perks and a satisfying customer
experience can still entice travelers to come back for more.”
And those returning travelers not only reduce acquisition
costs, but they also spend more at the hotel than a new customer - 67%
more, according to Roiback - and they're likely to recommend
the hotel to friends and family.
At the heart of the evolution in hospitality loyalty is
technology, which gives brands data and capabilities to understand and serve
guests with offers that are personalized rather than generic.
A report from Amadeus and InterContinental Hotels Group, Drivers
of Change in Hospitality, says, “ ...technology that extrapolates
emotionally sensitive data could pave the way for more brands to reach a cult
status at scale. Information about the guest, from their temperament to their
hobbies, will create a holistic understanding of each individual.
"This in turn
facilitates thoughtful interactions and a personalized experience that will
truly resonate. ... Holistic data can also inform the type of third-party
partnerships companies could enter as part of their efforts to connect with
like-minded brands and popular services.”
Hilton is seeing these types of benefits in its Hilton Honors
program, which now has more than 100 million members who accounted for 62% of
occupancy across its portfolio of hotels in 2019.
Members use the Hilton Honors app for things such as
pre-arrival room selection, as a digital room key and control of in-room
technology. But Jonathan Nouri, vice president and global head of Hilton Honors,
says he is also focused on driving value for members outside of their stays.
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“Our program is growing at a faster rate than ever, and a lot of
the member we are enrolling are much younger than our core demographic,” Nouri
“They don’t have the occasion to travel quite as
much yet, so our ability to engage them with ... the ability to earn and burn points
with Lyft and the ability to redeem points on Amazon becomes increasingly important,
so when those travelers do have a travel occasion Hilton is at the top of their
has also revamped its “experiences” redemption options in the last couple of
years, adding more choices at lower point levels to make it more accessible
rather than purely aspirational.
“To get a pair of concert tickets to really good artists
through our partnership with Live Nation for only 10,000 points ... the chances
are the next time they think of traveling they will probably book with us
versus just being brand agnostic and booking through an OTA because they had
that experience with us,” Nouri says, adding that the company will “double down” on
the Live Nation partnership this year.
Accor has taken a similar experiential approach with its redesigned
loyalty program, Accor Live Limitless (ALL), which launched in early 2019 and comprises
its digital platform, loyalty program and visual identity.
According to Accor’s chief digital officer, Maud Bailly,
the strategy is based on the concept of “augmented hospitality” which is “an
everyday lifestyle companion, both at home and everywhere in the world” that
enhances members’ lives with extraordinary experiences.
To do this, the company works with partners such as AEG
to offer members access to tickets and private suites at arenas in Europe, Latin
America and Asia. Accor also has a partnership with IMG that gives ALL members access to chef masterclasses and culinary encounters as
well as to “Taste Festivals” in cities around the world, and it partners with Paris
Saint-Germain football club that gives members exclusive access to tickets and
VIP box seats for all matches.
They clearly ask for instant and tangible gratification, instead of endlessly waiting for using their points and finally seeing the benefit of being a loyalty member.
Maud Bailly - Accor
And in January, Accor announced a partnership with Southeast Asia super app
Grab, which enables GrabRewards members to use their points to book Accor
hotels and ALL members to earn points from Grab rides and participating merchants.
Says Bailly: “We have the opportunity to collect more
insight about our members and their expectations from a
relevant loyalty program: globally they are looking for seamless
digital interfaces, on website as well as on the app. They clearly ask for instant
and tangible gratification, instead of endlessly waiting for using
their points and finally seeing the benefit of being a loyalty member.
of millennials consider that ‘fun’ is also an important loyalty driver. And, last
but not least, our guests want more choice, diversification, among more brands,
but also more services, breaking down the walls of the hotels.”
In releasing its full-year 2019 financial results last week, Accor says it
expects revenue from partnerships to double by 2022 when it is expected to
reach €100 million.
A simple approach
But the loyalty strategy for large global brands such as
Hilton and Accor is not necessarily a fit for smaller hotel companies.
North America-based RLH Corporation, which operates franchise
brands including Red Lion Hotels, Hotel RL, Signature Inn and Knights Inn, has
taken a more focused approach for the 2.6 million members of its Hello Rewards program.
About 18 months ago the company introduced a new loyalty
currency, Hello Bucks, with members earning between 10 and 30 Hello Bucks for
every stay depending on the length. The Hello Bucks work like cash – each one equivalent
to one U.S. or Canadian dollar – that can be applied toward the next
reservation or saved to cover the cost of a full free night.
“We designed it to be really simple and easy to understand,”
says Whitney Swales, RLH Corporation’s vice president of guest recognition and
“You don’t have to calculate complicated point structures,
you don’t have know certain hotels you can and cannot go to. There are no
blackout dates. It’s really just based on being simple and providing something
to guests that they could use after their first stay.”
The company’s previous program rewarded guests with tokens
that could be redeemed for a free night after seven stays, but Swales says that
was not a good fit for the brand that has many leisure guests that travel less
In November, RLH launched a partnership with Grubhub that
allows members to get free delivery and earn 10 Hello Bucks rewards for each
Swales says she is interested in adding more partners
in the future – but only if they are a good fit.
“Having partnerships is definitely important but not
overdoing and having it be so complicated that people get paralysis by analysis
isn’t necessarily beneficial to the program,” she says.
“So to me having something like Grubhub really matters to
our particular guests given that not all of our hotels have an onsite restaurant.”
One of the company’s most innovative initiatives is its partnership
since 2016 with Expedia, which Swales says drives about half of the new
enrollments in its rewards program.
Through the partnership, consumers looking at Red Lion
properties on Expedia see member-only rates. If they choose that rate, they are
automatically enrolled in Hello Rewards and earn Hello Bucks for the booking.
“This allows us to have an acquisition channel outside of our
regular booking channel on Redlion.com, and it allows us to reach guests that
we may not be able to reach otherwise in a place that we know they are already
shopping,” Swales says.
“And given that we’re a smaller franchisee company, it allows
us to reach people that wouldn’t necessarily know about our brands.”