While owners and operators might have qualms about the costs of loyalty, experts say they’re vital for the long-term health of hotel—and other travel—businesses.
LOS ANGELES—There are many reasons owners and operators will bemoan the cost of hotel brand loyalty programs, but experts said there’s a lot of reasons to be optimistic about programs from a consumer perspective.
Speaking during the “Loyalty and experience = Business success in today’s economy” session at the 2020 Americas Lodging Investment Summit, Brian Kelly, founder and CEO of The Points Guy, said he believes we’re currently living in “the golden age of loyalty.”
“Everyone can get a part of it, not just the super frequent travelers,” he said. “I think it’s been democratized, in general.”
Bridget Blaise-Shamai, VP of customer loyalty and insights for American Airlines, agreed with that assessment and noted there’s a higher degree of competition for loyal customers, which should translate to better customer experience.
“So look for things to be easier for (consumers) to participate in and certainly more personalized and relevant,” she said.
Why should owners be willing to pay?
When the panel was asked why owners should foot the bill for loyalty, David Flueck, SVP of global loyalty for Marriott International, said winning in loyalty is imperative when it comes to maintaining profitability, noting the most loyalty guests “pay more, stay more and cost less.”
“So they do help all of our owners in terms of driving up top-line growth and also improving margins,” he said. “Nowadays, there is no shortage of companies that would love to get between us and our customers.”
He noted if you don’t invest in establishing guest loyalty, more people will be more willing to book through third parties.
“There is a battle for who’s going to win the hearts and minds of consumers,” he said.
The power of partnerships
Kelly said the most exciting thing happening in the universe of loyalty right now is the various loyalty partnerships that can help consumers maximize the value of various offerings.
“The goal here is to take two or three valuable brands and leverage the loyalty programs across multiple touchpoints so you can touch the traveler at all parts of their journey,” he said.
The problem is they can be difficult to navigate and maximize.
“Today … it might take you hours of reading to increase your knowledge level in any one program,” Kelly said, noting his publication is trying to work on technology to help better digest that information.
Experimenting with new loyalty perks
One such loyalty partnership that Marriott is piloting is teaming up with United Airlines in London for a program that will allow guests to check their bags directly to their hotel, which Kelly was high on the prospects for.
“I’d love to see more collaboration like this to take the stress out from the entire travel process,” he said.
Flueck said that program reflects much of the thinking at Marriott about the power of loyalty.
“It is something we’re super excited about to work closely with an airline fleet on how do we extend travel to be more frictionless from end to end,” he said. “These are the kinds of things that I think that not just with United but with other airline partners that we’ll spend time on in the years to come.”