Solving the loyalty dilemma for independents
14 FEBRUARY 2014 7:41 AM
The uniqueness of independent hotels draws a certain psychographic of travelers, but the challenge is making them loyal customers.
By their nature as unique, non-cookie-cutter properties, independent hotels are a natural draw to anyone looking for a travel experience out of the ordinary. And it’s the millennial demographic who most aptly fits this description.
It’s been widely reported the members of Generation Y love to try new, exciting and offbeat things and then share their experiences online with their cohorts.
That’s good news for operators of independent hotels, particularly those properties that offer amenities, services and experiences not generally found in chain hotels. The bad news, of course, is that because millennials like to explore new things, it can be difficult for operators of independent hotels to build loyalty among these guests. It’s a conundrum.
Like owners of all businesses, it costs less for hotel operators to retain a guest once he or she has stayed at the property than it is to attract a new one. That was the whole point of hotel brand companies launching loyalty programs in the 1980s and it accounts for their popularity.
There are alternatives for operators of independent hotels to tap into the frequency game. Stash Hotel Rewards and other services mimic the programs offered as a matter of course by the big global hotel brand companies. A study published in the “Cornell hospitality report” showed that after joining Stash, hotel guests increased the number of nights they stayed at member hotels and increased their spend by 45% to 57%.
There is another dynamic that gives hope to independent operators as they try to solve the frequency dilemma. As my colleague Patrick Mayock wrote last week, some in the hotel industry are beginning to look at millennials not just as a demographic but also as a psychographic. In other words, the attributes of those in the millennial age group—the sense of adventure and wanderlust and the constant seeking of experience— also are shared by older travelers. According to the theory, someone might be a baby boomer by age but a millennial at heart.
If true, this is good news for operators of independent hotels. Hotel frequent guest programs were created to serve baby boomers, and hard-core older travelers live and die by the points system and the inherent loyalty that comes with it.
Intuitively, then, it’s likely independent operators can lure baby boomer “millennials” back if they offer them the same perks, services and comforts they can receive in the chain world. Younger millennials might be fickle travelers, but they’ll return to those independent hotels that constantly keep their messages, programming and facilities fresh and exciting.
Now to recent news from the world of independent hotels:
Independent hotels in U.S. post positive results
Hotels in the independent chain scale in the United States posted positive results during 2013 for all three performance metrics, according to STR, the parent company of Hotel News Now.
Occupancy for the segment increased 1.6% to 58.9%, while average daily rate went up 3.6% to $108.90. Revenue per available room rose 5.2% to $64.11.
In year-over-year comparisons, January was the strongest month in 2013 for the segment, with RevPAR climbing 9.3% on a 4.9% increase in ADR and a 4.2% rise in occupancy.
Guest engagement is top priority for independent operators
In a survey conducted by Northwind-Maestro PMS, operators of independent hotels identified their top operational priorities for 2014. Service challenges and digital issues dominated the list.
The respondents named guest engagement and guest experience and service as their top priorities. Next were the impact of direct Web and mobile booking followed by big-picture data and business intelligence.
Other issues cited in the survey were the need for integrated operations, security of data and customer payment, and online group management.
Ahmed to lead HHM Independent Collection
Foiz Ahmed was named VP of HMM’s Independent Collection. He oversees marketing and branding for the majority of the seven properties in the collection.
Several new properties are scheduled to join the collection in the next few months. They include two properties in Miami Beach, Florida: the 75-room Blue Moon Hotel and the 70-room Winter Haven Hotel, both members of Marriott International’s Autograph Collection. Also expected to join the group is the 122-room Hotel Oceana in Santa Barbara, California, which HMM sister company Hersha Hospitality Trust is under agreement to acquire.
New booking engine for independent hotels
The InnDependent Boutique Collection, a unit of InnSuites Hospitality Trust, signed a marketing agreement with the Independent Lodging Industry Association to provide a booking engine and frequent traveler program for independent hotels.
Magnolia Hotels adds properties to Stash
Magnolia Hotels in Dallas, Denver and Omaha, Nebraska, have joined the Stash Hotel Rewards program.
The Magnolia in Houston affiliated with Stash in October 2012.
Deals and developments:
- Ensemble Hotel Partners purchased the 57-room Bernardus Lodging in Carmel Valley, California, from Bernardus Pon, who opened the hotel in 1999. The new owner named Noble House Hotels & Resorts to operate the property.
- Following a $10-million renovation, Charlestowne Hotels dropped the Best Western affiliation for its 91-room King Charles Inn in Charleston, South Carolina.
- The Elbow Beach Hotel & Development Company will assume management of the Elbow Beach resort in Bermuda when the management contract with Mandarin Oriental Hotel Group expires on 31 March.
- Construction started last month on the 70-room Porter Square Hotel in Cambridge, Massachusetts. Hay Creek Hotels is developing the property, which is scheduled to open in spring 2015.
- Lowe Enterprises Investors purchased the Royal St. Charles in New Orleans on behalf of an investment client. An affiliate, Destination Hotels & Resorts, assumed management of the 143-room hotel.
- The Brooks at Williston, an 80-room full-service hotel in Williston, North Dakota, opened in mid-December.
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