For all the talk of a loyalty program being akin to being part of a family, for most guests loyalty increasingly feels like being on a distribution list.
The warm fluffy feeling from a brand comes from identifying with its core values.
Today, consumers expect an aura of authenticity that comes with allegiance, and that recognition is not just an email with a special offer, it is an unprompted exchange in which a brand shows that it “gets you.”
Hospitality companies are in a stronger position to offer this than many other consumer brands.
Having a captive audience for at least eight hours of a guest’s stay is a great privilege, but the bigger brands have a real opportunity to develop loyalty for guests throughout their lives and not just during an overnight stay within one of its hotels.
Opportunity comes through a mindset shift, boosted by technology and partnerships, to be relevant to guests 365 days a year, becoming part of their world.
Hotel brands need to make a shift toward learning how they can tailor themselves to their customers' lives and how they can offer a really personalized experience.
By hyper-personalizing experiences, the future of loyalty has endless opportunities.
A guest could be staying at a Bonvoy residence and using a Bonvoy bike to get to a Bonvoy workspace. A brand can also provide the mattress you like, the food you want to eat and the experiences you want enjoy wherever you stay.
To provide a rounded experience for guests, this would extend into partnerships with other consumer brands so that the hotel brand remains top of mind even during experiences outside of their properties.
It would be a shift for the brand away from the asset and onto the consumer, but also it would be a shift for the consumer away from collecting points and toward utilizing elements of the brand in their everyday life.
Hotel loyalty programs are showing signs of moving in this direction.
For example, Marriott and Hilton both have agreements with Uber with special rates and points to be earned.
For hotel management companies today, the headline is the management fees they charge hotel owners, but they should be thinking beyond a property. There’s a more fulfilling — and more profitable — route to be taken.
By focusing on the guest’s lifetime rather than the property’s, hotel brands can increase their revenue from guests through direct subscriptions to “members’ clubs” that offer not only overnight stays but also access to branded gyms or workspaces and the like.
Programs can also be linked to credit-card spend.
Disney understands this potential. Disney speculates that if the consumer spends 90 minutes and £6.99 watching a Disney film, then Disney can further build a relationship that will often convert into a two- or three-day stay at a Disney resort. It’s a £6.99 lead generation tool that works.
Similarly, Marriott with its credit-card offering can convert those microseconds of payment interaction into an overnight stay.
The current fee model that we often see could be made more flexible.
Owners would be incentivized.
Taking a more integrated view may also serve to help brands realize the value of ancillary revenues in their many forms, some of them being on-property. Higher revenue would encourage more development and feed the hungry brand pipelines.
Those add-ons should be the business model.
This is where brands are looking after customers, who then have a 365-day relationship with the brand and not only for those two or three occasions per year where they might stay in a hotel.
Brand equity is not that someone wants to stay with you, it’s that they want to have a daily relationship with you.
The customer is showing the brand through the amount that they spend that they are affiliated to the brand.
It is the perfect encapsulation of a brand strategy at work, but today many brands see it as the opposite.
They see their main business as management fees.
But this is your real business. These are your real customers.
Richard Valtr is founder of hospitality management systems firm Mews.
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