Loyalty plans adapt in ‘reward me now’ culture
 
Loyalty plans adapt in ‘reward me now’ culture
25 AUGUST 2015 6:08 AM
Hotel loyalty programs are racing to appeal to a diverse membership, which creates challenges for companies administering the programs.
NASHVILLE, Tennessee—Building chain and brand loyalty in a world of consumers seeking instant gratification and status recognition might seem more complicated than it used to be. But, according to panelists at the recent Hotel Data Conference, two main criteria should be kept front and forward: customization and simplicity.
 
At a session titled “Guest loyalty: Fact or fiction?” panelists said hotel loyalty was changing because, as Bashar Wali, president and principal of Provenance Hotels, commented, “we live in a time when consumers are conditioned to be loyal … (but are also) seeking experiences, not to be a statistic.”
 
“And you’ll see when they check in, their wallets have every loyalty card ever,” Wali added.
 
Guests often are regarded as “loyal” on their first stay. Such is the desire to have guest profiles on brands’ databases, panelists said. But that’s meaningless to both sides if those guests have no intention to return, or are given no incentive to do so.
 
“Loyalty programs do not automatically mean guest loyalty. It is about rewards,” said Michael Dominguez, senior VP and chief sales officer at MGM Resorts International.
 
Moderator Stephanie Ricca, editor-at-large of Hotel News Now, spoke of two other recent changes: emerging loyalty-scheme players such as online travel agencies and the return of group business.
 
Ricca said 13% of OTA customers were members of OTA loyalty programs.

All told, 289 million guests had signed on to hotel loyalty schemes, a number that trailed the 355 million who had done so with airlines.
 
“Corporate travel managers now say loyalty programs play a ‘very important’ or ‘extremely important’ role (in their travel spend decisions),” Ricca said.
 
All change
Hotel loyalty programs remain important, but they are changing, with simplicity key and technology allowing guests to be recognized and rewarded immediately.
 
Getting to that point requires much trial and error, panelists said.
 
For MGM’s Dominguez strength comes in numbers. In 2013, the company merged its loyalty program with that of Hyatt Hotels Corporation.
 
“We looked at our databases. They were of similar size and overlapped by only 20%, so it made sense. … The whole purpose of loyalty is to communicate with guests, to recognize status. … That status gets you accessibility,” Dominguez said.
 
Bill Carlson, senior VP of performance analytics at Choice Hotels International, agreed increased levels of customer data allowed hoteliers to increase rewards and loyalty. Choice’s long-term partnership with Preferred Hotel Group rewards Choice loyalty members with stays at independent hotels.
 
“It’s about rounding out the program to make it as valuable as it can be. Recognition is a little tougher for us considering we’re a franchise company, so more has to be done at the property level,” Carlson said.
 
The battle is about engagement, panelists added. If you make guests feel special, you’ve won, they said.
 
“Make it simple for that consumer to connect with the brand, and make it creative. Open the funnel. There’s been a huge shift in the last few years in those signing up to hotel loyalty programs via social media,” said Benjamin Habbel, founder and CEO of guest-retention software company Voyat.
 
“The passport of the future is the guest’s social profile,” Habbel said.
 
Demographics are dead 
“We spend so much time talking about millennials and baby boomers, but now it is about what customers want and like. No one has come up with a loyalty program that is customizable,” Dominguez said.
 
Group business wants its spend rewarded, too.
 
One major lesson, panelists said, is not to have leisure and business loyalty programs replicate one another.
 
“As an industry we have to focus on (global distribution systems) for group. That’s a monumental task, with so many technologies that have to talk to one another, and it is expensive,” Dominguez said.
 
“Critical is to have marketing and (customer relationship management) teams work closely, and we believe that so much we had them move into the same building. But ultimately I am not so concerned with how the customer gets to us but that they have the best experience once we’ve captured them,” Dominguez said.
 
Wali was the one panelist who disagreed that points belonged to yesterday.
 
“Points are not dead. There are some road warriors who will sacrifice quality and convenience. Those guys are not going anywhere, even if you are seeing a rise in experience seekers rather than points seekers,” he said.
 
Wali also recognized the coin’s other side.
 
“Forty percent of the elite of your loyalty program will look at multiple websites in the booking process, so where is the loyalty? The secret is how you grab guests’ attention, with privacy not an issue. For many, they’re happy someone took 10 seconds to learn just a little about them,” Wali added.
 
Who is doing that well, panelists asked. The answer: The OTAs.
 
Wali brought up the threat of Amazon and its plays into the travel business.
 
“Think how much information they already have on you,” Wali said.
 
Dominguez brought up electronics company Apple.
 
“It gives you absolutely nothing but has loyalty beyond belief,” he said.
 

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