Hotel News Now – Hotel loyalty programs might be due for an upgrade.
During the “Does Loyalty Have a Shelf Life?” panel at the 2021 Hotel Data Conference, hotel executives with specialties in revenue management and sales and marketing discussed some of the loyalty trends that emerged as travel reopened from the COVID-19 pandemic.
Vickie Callahan, senior vice president of revenue generation at Atlanta-based Peachtree Hotel Management, said a spike in leisure travel throughout the summer made the loyalty data a bit muddled.
“It’s changed just because our guest type has changed so much,” Callahan said. “There’s a little bit less of an education in our guests today of what the loyalty programs give them, and actually what they’re looking for. … We all know corporate travelers want a ton of points and that’s why they’re in the loyalty program, but I don’t know that the leisure traveler understands the value of that.”
Pent-up leisure demand and trips funded with federal stimulus checks have led to more first-time loyalty members who don’t fully understand the loyalty program perks and what they’re eligible for, said Jason Fawaz, vice president of revenue at Iowa-based hotel management company Hawkeye Hotels.
“They think because they have that [Hilton] Honors number or that [Marriott International] Bonvoy number attached to the reservation they’re entitled to the world,” Fawaz said. “The joke used to be pre-pandemic [a guest might say] ‘Oh, but I’m a diamond member.’ But now it seems to be ‘Oh, but I’m a blue member.’ The blue members, the entry-level tiers, think that they’re entitled to the same perks as the diamond members.”
Loyalty in the Age of COVID-19
Expectations have soared as guests have returned to hotels, often paying a higher rate than before the pandemic. But industrywide, hotels are struggling to restaff and have had to cut back on amenities such as daily housekeeping and food-and-beverage service.
Guests who have built up loyalty status with a hotel brand are quick to point out what’s different about the stay, and employees have borne the brunt of those complaints, Callahan said. She added it’s difficult for front-desk agents to even have the time to recognize a guest’s loyalty status with everything else on their plate.
“We all have to be honest with ourselves that the front-desk people right now are doing everything possible just to get the guest checked in. … We will be able to get better at that as our staffing challenges start to level out a little bit,” Callahan said.
Fawaz agreed that the pandemic has pushed recognition of loyalty status to the side.
“I feel bad for these hotels; we as the management company are telling our hotels ‘Guys, it’s pandemic mode, you have to do a lot more with a lot less,'” he said. “And then we have the guests coming in saying, ‘All right, I’m a blue member, I want a lot more for a lot less.’ And what we’re failing to do as an organization is to teach our hotels how to do more with less. That’s been the key that we’ve been missing at least from our perspective.”
Lynn Mucciano, vice president of sales and marketing of Chattanooga, Tennessee-based hotel management company Vision Hospitality Group, said it’s imperative hotels find a way to work loyalty recognition back into an interaction with a guest during check-in.
“I don’t think any of us thought that the wear and tear that we’re seeing in the labor shortages and all these different operative parts would be where we are today, but there’s COVID fatigue everywhere,” she said.
For a time, COVID-19 safety protocols limited or eliminated hotel breakfast options, and guests are unhappy that some properties still haven’t added them back.
“As hotels, we probably trained our travelers to love breakfast because most of our hotels offer it, but when we reduced the breakfast, that was probably the most complaints we got back from both loyalty members and standard guests,” Callahan said.
She added hotel brands could test breakfast options as an upgrade for loyalty members at higher tiers if costs are a concern.
“Is there something you can do from a loyalty perspective to enhance it for the loyalty members?” Callahan said.
More guests are bringing their pets along on their trips, and few balk at a hotel’s pet fees, Mucciano said.
“We’ve seen pets all summer from the leisure guests. … In a number of markets, there are veterinarians that normally would board, or doggy daycares — they’re not boarding right now. Or some are back in the open with limited services, but I think that’s kind of helping to drive that,” she said.
Callahan said despite the pandemic’s challenges, interactions with guests have to go back to the fundamentals of hospitality.
“We’re trying to get back to the basics right with our team to say, ‘Remember tone and remember thanks,'” she said. “So if you thank a guest for being a member of the program and your tone is genuine, then people tend to forgive a little bit more.”
How Hotel Loyalty Could Be Better
Mucciano said by learning more about member spending habits, hotel loyalty programs can offer the experiences or add-ons they’re looking for.
“Pre-pandemic, generally people were leaning more toward experiential and wanting [more than] the transactional piece. … There’s a real place for learning more about the customer and then us — on the delivery end — being able to meet those needs more succinctly,” Mucciano said.
Credit card companies understand that much better, Callahan said. She added consumers are likely to sign up for a credit card if it comes with airline miles or points, but hotel companies don’t seem to capitalize on that as much.
Finding ways to partner with airlines to package flights with hotel stays would open up many more revenue opportunities to sell guests on experiences, Callahan said.
“If we can find ways to do it to where it’s mutually beneficial to both, it would be a lot more attractive to somebody in a loyalty program, because then I know I can just get my trip taken care of between the airline and the hotel,” Callahan said. “The big major expense of my trip is usually those two components. If those two are taken care of, then I have a lot more flexibility to do whatever else I want to do. I might even do excursions … that I might not have done because I don’t have to pay out of pocket for my airline or hotel.”
Third-party online travel agency websites such as Expedia or Booking.com already present travelers with flights and hotel options all together, and Fawaz said hotel brands should follow suit.
“This is already something that can be done through Expedia, or whatever your third-party site is,” he said. “So, I’m kind of surprised that the brands have been slow to formalize a process like this. Why can’t I book my entire package through Hilton.com?”