2/24/2010
The Allure of Loyalty
As consumers count costs, loyalty program membership has accelerated. And hotels are getting creative to reel guests in
This article talks about the impact loyalty programs are having on the hotel industry, and how they are not only becoming more prevalent but also how they are luring customers in.
Senior executives that are in charge of loyalty programs at major brands are in consensus that the loyalty programs have become even more meaningful over the past few years. This is because travelers seek to spend as little as possible on accommodations. They see there points earned as a form of currency for not only rooms and air travel but merchandise as well. Enrollment is up, percentage of business from members is also up, and redemption for free nights is up as well. Since consumers are more used to choice than ever hotels are creating programs with a wide range of flexibility. An example of this would be Starwood's Preferred Guest (SPG) program. They offer those members redemption on more than 350 airlines with no blackout dates. Although most hotels agree upon the importance of their loyalty programs they do differ on who they target these programs to. For example, some loyalty programs are focusing on infrequent leisure travelers, like Hilton. Where as others, such as IHG, are focusing on business travelers. IHG chooses to do so because those members also take vacations and want them to stay with them on those trips as well. Hotels are looking into new ways to lure customers into their programs such as, looking to social media avenues as a way to elevate the relationship they have with their members. The programs are moving quickly on mobile apps as well. Hotels such as Starwood and Hilton have created iPhone and iTouch applications for their loyalty members. These applications offer a “Request Upon Arrival” service that enables a traveler to place an order for room service and have a meal in the room on arrival to the hotel. It also offers “e-check-in,” a feature that allows a guest to remote check-in up to 48 hours in advance.
I think this article is very relevant to the hospitality industry as a whole. Due to the poor economy the hotel industry has taken a a real "beating" financially. It is in our best interest to try and promote and enhance any programs that will benefit us. In a world where customers are looking for the lowest prices, loyalty programs are essential. Customers like to know that they are not only receiving a good deal but that they can also get something in return for doing business with you. They see loyalty rewards and points as almost a "free" gift that they deserve for their repeat patronage at your business. By instilling these types of programs in our hospitality operations we can increase our customer base as well as maintain the one we already have. By creating applications for devices such as the iPhone we are connecting ourselves to our customers even more. We are simplifying processes for them and catering to their wants and needs. Loyalty programs are a step in the right direction for the hospitality industry to get back to being financially sound.
Source: Lodging Magazine (Marketing)
I really enjoyed reading your blog posting on The Allure of Loyalty. Hospitality companies are becoming more aggressive with loyalty points. Until we worked at the front desk, I didn’t realize how frequent guests actually use them. And how the Marriott uses them to their advantage if there is an issue with a guest. I’ve never seen points as a “form of currency” as the article puts it. But I can now see why and how guests who do travel a lot do. I agree with your point of view on how loyalty points can help in leading the hospitality industry back in a positive direction. And I enjoyed reading how hotels are developing creative ways to connect with the guests more. I also agree with your point that guests like feeling that they are receiving something back when they are doing business with you. Especially for guests who travel frequently and stay at the same hotel company for all of those stays. I agree that its nice for companies to give back. I wonder how much it costs for hotels to give out reward points. And, if in the end it does end up benefiting them more of if they loose money but have higher occupancy percentage?
ReplyDeleteGreat blog Becca!