Loyalty programmes: Good for hotels, great for guests

With rewards becoming increasingly curated and customised, being loyal to a hospitality group wins you more than mere brownie points and helps the hotels’ bottomlines too.

Loyalty programmes are to hotels what air miles are to airlines. They incentivise customers to book and bring in repeat business for the hotels. Most of the world’s top hospitality chains offer room upgrades, priority check-in, access to exclusive areas in hotels, discounts, invitations to premium events, and often more personalised service to those enrolled in their loyalty programmes.

Loyalty programmes, hotels. Hospitality
Customer loyalty programmes have been around for a century. How do you update them to suit today’s times? Image: Pexels/Andrea Piacquadio.

The perceived value of all these perks may be great, but in a world where the consumer shops around for the best discounts and value, are loyalty programmes still relevant? According to Julie Purser, Vice President, Marketing, Loyalty and Partnership, Asia Pacific Marriott International, they are, and more than ever now. Marriott Bonvoy, Marriott International’s loyalty programme offers extraordinary experiences that are aspirational and allows members to earn free nights and take advantage of their Marriott Bonvoy points at more than 7,600 properties around the world spanning 30 distinct brands. “We continue to see strong growth numbers for Marriott Bonvoy worldwide (40 per cent of our new member enrolment globally is from Asia Pacific). It is observed that more than 50 per cent of guests who book with Marriott are Marriott Bonvoy members,” she points out.

The Taj group’s InnerCircle too, offers benefits across four different tiers, with members progressing to higher tiers to access maximum benefits. Platinum, their highest tier offers unlimited upgrades to eligible room categories, convenience of an in-room check-in and more. All tiers offer members the ability to earn points on a wide range of their services with an accelerated earn rate as you move up the tiers. “In today’s world, where value-driven offers and services hold more credence, a loyalty programme is an essential tool to develop long-term engagement with a wide audience base,” says a spokesperson for the Indian Hotels Company Limited (IHCL), South Asia’s largest hospitality brand behind the Taj group, recently lauded as the world’s strongest hotel brand.

How hotels benefit from your loyalty

A variety of benefits accrue to a hotel that has a robust loyalty programme. More bookings at a lower cost of acquiring them are the biggest value add, since members don’t need to be converted into customers and are more likely to book directly with the hotel than via online booking aggregators or travel agents. Even when hotels offer discounts, their net average rates have been seen to be higher than the rates on booking websites. Global data has also shown that members of loyalty programmes tend to spend more with the hotel they are familiar with and invested in, resulting in incremental revenues across the chain.

The IHCL spokesperson also agrees that loyalty programmes can work to the benefit of both sides of the hospitality equation: “A key benefit of having a strong loyalty programme is definitely that it helps build brand equity and top-of-mind recall; thereby easing the upselling process significantly. It also allows the brand to derive data-based insights into consumer behaviour, and their likes and preferences, which helps maintain and optimise customer life-cycle management.” 

This can help to maintain a rich database of the top members, inviting them to participate in focus groups from where vital information about their decision-making process may be gleaned. The hotel can also engage with them across social media platforms and use this to personalise and enhance their experience when they visit the group properties. There’s also a chance for a hotel to incentivise preferred customer behaviour by offering loyalty points for things such as completing a guest survey, downloading a mobile app or using express check-in and check out services.

Complaints, loyalty programmes, hotels. Hospitality
Guest expectations are high when they are members of a loyalty programme. The hotel must live up to the hype or face the consequences. Image: Pexels/Moose Photos.

The costs of administration, marketing and operations to implement these extras and make them redeemable across multiple properties can certainly deter a hospitality brand. The greater engagement with customers also entails a greater risk if their raised expectations are not met, leading to negative reviews and complaints. But if the experience of over a century of such loyalty programmes is anything to go by, the advantages greatly outweigh the disadvantages in the long-term.

Experience is everything

It’s also true that most loyalty programmes offer similar benefits that are part of the travel and hospitality universe, rewarding the customer for spends on things that they would spend on anyway, as long as they are with partner brands. But it’s how the hotel implements it that makes it a successful programme. For example, Wyndham Rewards, which has been considered one of the top names among loyalty programmes, was that successful in the US because it built on the right partnerships with airline and car rental companies. And branding and promoting their loyalty programme worked well for them too, with their TV ads featuring a ‘wyzard’ explaining the various options, taking away any confusion that the consumer may face in redeeming their points.

Internationally as well as in India, brands have realised that points and redeemables take you only so far. Guests’ expectations about service and what constitutes a good experience have increased considerably in recent years. With that comes a heightened expectation about what companies should be able to do. The smart ones have looked for ways to turn these expectations into opportunities, to ensure that the relationship is beyond a transaction and more emotional. “Loyalty programmes have become more personalised and are increasingly experience-driven, as opposed to just points earning. Rewarding customers for their loyalty and frequent engagement can help distinguish from other competitors and make customers feel valued. By personalising any service, we establish closer relationships with our guests and make it less likely they’ll go elsewhere,” Purser explains the paradigm shift that loyalty programmes have undergone in recent times.

Loyalty programmes, hotels. Hospitality
Smart hotels are making sure that the customers’ booking decision is based more on emotion rather than being purely transactional and price driven. Image: Pexels/Ketut Subiyanto.

Personalising the guest’s stay could mean something as simple as addressing them by name at check-in and check-out and all points of contact. It could also mean keeping track of any allergies or preferences when it comes to food or amenities and making sure there are no nuts in the salad or synthetics in their pillowcase, sheets and duvet. A business head in a different city may derive boast-worthy joy from being given free access to the boardroom for his meetings, while a parent may favour a hotel that has provided a special tuck-in service for their tiny tot. It could even extend to ensuring a guest gets the vehicle of their choice en route to the airport or lounge access at an airport they haven’t transited through before.  

Purser explains, “We believe travel is about discovery, whether it is experiencing something new or traveling to pursue a passion, like cooking, music or sports and Marriott Bonvoy makes it possible for our guests. Members enjoy seamless access to our experiential platform called Marriott Bonvoy Moments, where guests can enjoy once-in-a-lifetime experiences available for redemption, powered by our partnerships with iconic brands such as Mumbai Indians in India. It is all about providing personalised services along with relevant benefits to each guest.” Latter-day loyalty programmes bring in distinctive experiences that are exclusive and authentic in nature. They are significant in terms of offerings that have an array of perks only customised for the member.

Loyalty programmes, hotels. Hospitality
Personalised service for loyalty club members is a given today. Image: Pexels/Cottonbro.

IHCL agrees. “Taj InnerCircle opens up a world of exclusive benefits and privileges to travellers and connoisseurs who seek distinctive experiences with unparalleled value,” they say. But who exactly are these experience-seeking evolved travellers that are target consumer for these programmes? The IHCL spokesperson divulges the demographic of the typical Taj InnerCircle loyalist, “It consists of a mix of business and leisure travellers across varied age groups, with business travel driving a significant segment of spends. Our loyalty customer base consists of both, Indian and foreign customers, given IHCL’s global presence in 12 countries and in over 100 destinations.” Purser, meanwhile, observes, “Marriott Bonvoy Membership appeals to travellers on many fronts – a growing middle class with rising incomes and a desire for experiences has been fuelling a travel boom for a while now. Gen Xers are entering their peak travel years, and they, along with Millennials, have a strong interest in experiences over material goods.” It’s clear that today’s business or leisure traveller will enlist for loyalty programmes only if they perceive value and if their experiential travel needs are not only met but exceeded.

Be it Hilton Honors, Radisson Rewards, World of Hyatt, IHG Rewards Club, Choice Privileges, Shangri La’s Golden Circle or one of the other excellent loyalty programmes that’s applicable at the hotel of your choice, they’re all ready to do that little bit extra to make your stay a memorable one. Like Chefs’ Fridges author and Les Clefs d’Or member Adrian Moore, who moonlights as the Assistant Head Concierge at the Mandarin Oriental Paris when he’s not writing about food and culture, says, “If there’s a request from a regular guest, we treat it as a demand that must be met. I once flew in an elephant and sourced thousands of red roses within a single day because the guest needed these and we wanted him to remember that we had managed to deliver on his demand, however over the top and impossible it may have seemed.”

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