Rethinking What Hotel Loyalty Means

by Gary Leopold, Mar 4, 2013, 6:40 AM

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The recent Deloitte study, “A Restoration in Hotel Loyalty: Developing a blueprint for reinventing loyalty programs,” is a must-read that makes a solid case that today’s loyalty programs don’t foster much brand passion. I’ve long argued that hotel programs have devolved into frequency programs that are really more about promotions and transactions than engendering true brand loyalty.

As the study points out, there is a need for hotels to reinvent their programs, and Deloitte provides a series of recommendations that certainly should be contemplated by anyone looking to give their initiatives more impact and make them more relevant for today’s consumer.

No argument here.

What I do question, however, is how much loyalty one can realistically expect from today’s traveler.  

The study states “we were surprised to find that 65.4% of high-frequency travelers participated in two or more hotel loyalty programs in the past six months,” and that “hotel loyalty members switch between brand and spend as much as 50% of their wallet with non-preferred brands.”

I may be a focus group of one, but I’m not surprised.

Travel today is planned, booked and experienced in ways like never before. It’s fueled not only by the abundance of choice that technology has enabled, but it’s impacted by other realities of how technology has made it possible for people to do business in virtually every hamlet and community where they can connect to the internet or receive a cell signal. Business is happening everywhere, so no brand, no matter how big its footprint, is going to consistently have the most convenient property near where you have to be. 

When I think about my own travels in the past 60 days—Miami, Saint Lucia, New York City (SoHo and mid-town), Long Island, Orlando, Paris and Istanbul—I found myself staying at different brands in virtually every destination.

It’s not that I don’t have preferences—or that I don’t have elite membership in some brand programs (trust me, I treasure my Starwood VIP membership and use it whenever I can)—but today’s consumer is making decisions driven by myriad factors. It’s no surprise to me that “loyalty program” is well down the list of factors in the Deloitte study.

Think of those things that are driving hotel selection. Time is precious and travel exhausting, so you want a hotel as close as possible to where you need to be. You’re attending a conference, and need to stay where the meeting is taking place. You’re traveling to visit a client, and they put you up where they have negotiated a corporate rate. You need to be fiscally responsible or are on a per diem, so you base your choice on cost. 

Factor in the reality that there has never been such an abundance of quality product from which to choose, reviews and recommendations are everywhere, and getting access to hotel inventory is so fast and easy. It all combines to create an environment that makes brand loyalty harder and harder to achieve and, as a traveler, harder and harder to give.

It should force us all to not only rethink how we engender loyalty, but to rethink what it means to be loyal to a brand. And, simultaneously, to more realistically assess what share of wallet any brand can truly expect to get from today’s customer.

If I stay at the same hotel at Christmas year after year, but it’s my only stay, should I not be viewed as a highly valued and incredibly loyal guest? Unfortunately, in most current hotel programs, that would never be the case.

Similarly, someone who is on assignment on a project where they need to stay a few days a week in the same hotel for months on end, will no doubt be embraced as a “loyalist” by that brand and its loyalty program. But there’s a good chance that when that project is over, that same traveler may rarely or ever use that brand or property again.

With the rising focus on “big data” comes the opportunity for brands to form a deeper and more realistic view and definition of what constitutes loyalty.

The foundation for loyalty requires building and nurturing a meaningful relationship with your guests, one that will take time and patience, and require a significant investment of resources. It also demands taking the long view, never easy in a world filled with asset managers and quarterly dividends, and the results can no longer be measured merely in the number of transactions or frequency of stays. Travel has evolved, and so, too, must our expectations and definition of what constitutes loyalty.

It’s not that easy for today’s hotel guests to be loyal. Let’s not confuse that with them being disloyal.

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1 comment on "Rethinking What Hotel Loyalty Means".

1. Paula Lynn from Who Else Unlimited
   

   commented on: March 4, 2013 at 10:38 a.m.
   Very true. In addition, when a hotel chain keeps eliminating hotels available to use, loyalty is harder to keep. Then comes Avios and levels and slippy, slidey values

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