Create an emotional link to earn guest loyalty
05 JUNE 2014 8:50 AM
Hotel-company presidents tell NYU Investment Conference attendees emotional attachment and loyalty are essential elements in the success of brands.
NEW YORK—Hotel executives speaking during this week’s 36th annual New York University International Hospitality Industry Investment Conference were clear about the large roles loyalty and emotional attachment play as the lifeblood of hotel brands.
“Loyalty is not about buying people’s business; it’s about recognition,” said Kirk Kinsell, president of the Americas for InterContinental Hotels Group, during Tuesday morning’s “Hotels building brands and the consumer buy: Fitting the jigsaw pieces together” general session.
“Obviously the loyalty program is key,” added Simon Turner, president of global development for Starwood Hotels & Resorts Worldwide. “Those are the customers, the guests, we know best.”
When moderator Adam Weissenberg of Deloitte & Touche asked how hoteliers can create an emotional buying decision similar to the Coke versus Pepsi debate in which everyone has an answer, the panelists were clearly in awe of the soft drinks’ standing in consumers’ eyes.
“The closer to the customer you can get, the closer to that Coke or Pepsi (discussion),” he said.
David Kong, president and CEO of Best Western International, said it’s important to find a way to connect emotionally with guests so hotels can differentiate themselves from their competitors.
“Our industry, it’s getting more complex by the day … but it’s called hospitality for a reason,” Kong said, adding 95% of the comment cards and feedback hoteliers receive from guests are about people. “It’s customer care, not necessarily customer service.”
“The key thing is understanding what the emotional needs are when they travel,” Kinsell said.
Turner said successful loyalty and emotional bonds boil down to two key questions:
- How does that customer want to experience the hotel stay?
- How does the brand deliver that to the customer?
The answers to those questions can vary by age group, which prompted the panelists to hone in on the impact different generations have on the hotel industry.
Kinsell, who called 50 the new 30, said hoteliers shouldn’t dismiss baby boomers just yet because they have a lot of disposable income, yet many of them are value conscious.
Turner said two-thirds of travelers’ needs—whether they are 24 or 74—are comparable: safety, security, staff courtesy and on-time wake-up calls, among others.
“There’s a risk of overthinking this,” Turner said of all of the analysis going into the millennial traveler. “People take on different personas when they travel for different reasons. It’s psychographics more than demographics.”
The discussion goes beyond age differences.
Kinsell said hoteliers need to ensure they don’t lump vastly different global travelers into one group. He said travelers from Russia, Germany, Brazil, China and other countries have different wants and needs at a hotel.
“You can’t package them all in and say they are ‘foreign travelers,’” Kinsell said. “That would be a mistake.”
The changing face of technology
Technological advances have altered the course of guest loyalty and emotional attachment because of their far-reaching impacts. That means hotel companies must invest, and invest some more, to try to attract customers.
“We’re spending a huge amount of time looking at technology and how smartphones are changing the way we live our lives,” Turner said, noting that smartphones have essentially become the remote controls for people’s lives. “We’re all spending a huge amount of money making sure the technology the customer wants to use is the easiest way to get to our inventory.
“There’s a technology arms race to a certain degree,” he said.
Kinsell said online travel agencies play an important role in the hotel business being a high-cost distribution channel that provides service to infrequent, mostly leisure, travelers. He said OTAs serve as “booking brands,” while hotels would qualify as “stay brands.”
“As a ‘stay brand’ we can uniquely deliver guest experience,” Kinsell said. “It’s that that’s going to lead to the memorable element. The guest is telling us that is the most critical element in why they choose to return.”
Ongoing advancements in the distribution channel landscape continue to pique the interests of hotel executives. Consider the shared-economy phenomenon of channels such as Airbnb among the hot topics.
“Overlooking Airbnb would be short sighted,” Turner said. “But I also don’t think it’s the death knell of the industry.”
Kinsell agreed, adding it’s important to keep close tabs on emerging competition to the hotel industry.
“Any place where people will stay when they’re not in our hotels is stealing our share,” Kinsell said. “I don’t look at the glass as half full or half empty; I think, ‘who took the other half?’”
Kinsell said having a level playing field between hotels and the shared-economy lodging industry is important. That includes issues such as accessibility for disabled travelers, real estate taxes, occupancy taxes and life-and-safety issues.
Emotional ties that create loyalty will continue to fuel the need for new brands, according to the panelists. Those brands might take on different attributes than past launches—including size, shape and amenities.
“I don’t think a brand’s successful because of the number of hotels,” Kong said. “It’s immensely difficult for someone to start a brand from scratch.”
Kong said developing reservations systems, technology investments and loyalty program launches are high hurdles to overcome for small companies and startups.
“Large companies have it easier,” Kong said.
“It’s hard to launch a brand that really resonates with a consumer,” Turner said. “The bigger they get, the harder it is to maintain those distinctive personalities. We’ll be very selective in adding more brands; it will have to be a brand to broaden the product offering, not slice the pie one more time.”