Rewards programs still play an important role in hospitality, but increasingly, in a world of unlimited options, guests are looking for more from their hotels. Low room rates and affordable upgrades can be found by the dozen on any OTA website; these days, the traveler barely needs to build a relationship with a hotel to secure an affordable, comfortable stay. As Skift puts it:
“Many consumers find themselves members of multiple programs for the sole purpose of collecting points, without really having any strong loyalty to one brand. Often, points-focused travelers instead opt to book through Online Travel Agencies (OTAs), which have their own rewards programs, simply because it gives them more realistic chances to earn free stays than traditional brand-based memberships might.”
Indeed, only 25 percent of travelers say that rewards programs are a factor in their decision to book, according to TripAdvisor. The majority are instead largely guided by price, location, and perceived value for money. Moreover, active use of rewards programs has been steadily declining since 2010, and 60 percent of hotel guests still don’t belong to one.
There’s no question that rewards programs are beneficial to some segments of travelers. Business travelers, for example, can use the points they collect to get perks and upgrades, or even save them to redeem when they travel for leisure. They’re a handy tool for hotels as well, because they can help hoteliers collect valuable data about their guests that they wouldn’t have had access to otherwise.
Nevertheless, some of the world’s biggest brands have eschewed the rewards program altogether, favouring personalization of the guest experience as a way to build a rapport between the hotel and travelers.
“Four Seasons Hotels & Resorts President and CEO J. Allen Smith told Skift last year, when asked about the company’s loyalty strategy: ‘Loyalty programs are defined by ‘I accumulate points and then I get something of value for that that I can redeem.’ Truthfully, that’s not what our customers are looking for. Our customer is looking for recognition: ‘Know who I am, and provide personalized services to me.’’”
While such an approach isn’t always viable for every hotel brand out here, the idea behind the concept is one that all hoteliers should take note of. Hotel brands will need to be creative if they want to capture the loyalty of guests who are devoted only to the deals OTAs can offer them.
At this year’s HITEC conference in Toronto, Infor’s Pam Vickers and Michael Shubach gave a presentation that covered the hospitality industry’s approach to loyalty in a digital world. Fundamentally, their message was that good ideas, strong values, and features that appeal to all generations will be what bring guests to your property and convince them to return.
At Benbria, we believe that building an emotional connection with the guest is the key to winning their loyalty. For some guests, the promise of tangible rewards still holds appeal, but many others will be more impressed by how you made them feel than the material perks you gave them.
Building this kind of connection involves personalizing and modernizing the guest experience — in other words, giving guests the opportunity to reach you using the communication channel that suits them best. Not all guests will want to pick up the phone and call you; some would rather send you a text or tweet at you. Ask yourself: Do you really want to miss out on the one-third of guests who won’t stay with you because you aren’t giving them a digital method to reach out?