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Making Hotel Guest Loyalty Programs Truly About Loyalty

A recent study showed that U.S. travelers are shunning airline loyalty programs. The core driver for this change is that travelers seek out the lowest fares, rather than having a relationship with a particular airline.

In addition, there’s a perception that these loyalty programs don’t offer any true benefits, which has been reinforced by airlines like Delta reducing the number of perks for frequent flyers.

For hoteliers, there are some parallel lessons that could be learned from this study.

First, the core focus in the hospitality arena should be all about fostering relationships with guests that truly matter. Hotel guests want to have an emotional connection with their preferred hotel brands. This concept is critical for developing high-level strategies for building loyalty.

In addition, hoteliers need to understand what is important to the customers of their hotel, and its market segment, in order to offer products and services that matter most to guests and ensure that staff members can deliver on guests’ preferences.

Leveraging the right innovations that allow hotels to gather guest data to develop the right programs that best meet their needs should also be considered. This extends well beyond offering various perks and discounts, which fall more into the tactical side of building guest loyalty. In today’s commoditized era, hotels should seek additional value for guests by using software applications, guest-specific data, and a vision for tying them together to better understand guest preferences.

Travel loyalty does not need to be a thing of the past. And, by taking the right strategic approaches, it is possible for the hospitality arena to avoid the current fate of the airlines – where price trumps everything else.

 

Independent Hotels: Own the Local Tourism Landscape

According to a recent New York Times article, many large hotel brands are embracing the concept of training their staff to have a more personalized touch with guests. This includes a switching their philosophy to realize that hotel workers are an integral part of the local “tourism landscape.”

While this concept seems highly intuitive, creating a more personalized guest experience – with the service level to match – may be a bit more challenging for larger hotel brands. Much of this comes down to training and a cultural shift within large organizations, which is no easy task.

However, for independent hotels, Inns and B&Bs, this article paints a different picture – the opportunity to further differentiate themselves by truly being part of the “tourism landscape.” Of course, for many small property owners, this is a day-to-day reality that they fully embrace.

Though, thanks to new innovations, it’s possible for independent hoteliers to be even more critical players in the local tourism arena. For example, new mobile applications allow Inns and B&Bs to offer truly customized recommendations for restaurants, events and other local attractions as no two guests are alike. This creates an opportunity to make the guests’ stays more memorable, and build long-term loyalty.

In addition, independent hotels can play a larger role in the local tourism economy by referring business to the area restaurants and attractions. This often results in a positive feedback loop where those businesses then recommend and promote the hotels themselves.

In the end, an independent property will become a trusted resource that is a pillar of the local “tourism landscape,” without training or a massive culture shift within a large organization.

 

Hotel Brands: Millennials Are Not What You Think

One of the biggest demographic trends in the hospitality arena is targeting millennials, a generation that seeks out “experience-based” travel opportunities.

From leveraging new mobile innovations to offering more dynamic lobbies for networking, many hotel brands are wisely investing in a new technology and marketing efforts to influence this generation.

Of course, the perception of millennials may not always be what hotel brands think. Although what we often think of millennials as a cohort of people who continually pursue, and invest in authentic experiences, this can reinforce a one-dimensional perception of this generation.

Reality is much more complex.

As highlighted in this recent Marketplace article, millennials are the largest and most diverse generation of Americans, with about 19 percent of them identifying as Latino or Hispanic, 13 percent as black or African-American and six percent as Asian-American.

Adding further to this complexity, a new study shows that many minority millennials lack financial security, and most are actually “losing confidence in the American narrative of pulling yourself up by your bootstraps.”

With this new information in mind, hotel brands may consider new approaches to actually getting to know – and more effectively targeting – millennials in ways that meet their lifestyle and financial expectations. This could include creating more offers and discounts, or even barter arrangements with the more influential millennials on Instagram.

The core takeaway is that everything is not always what it seems. With this in mind, it’s best to invest in strategies that can you help you to better understand this diverse group, then developing the right approaches to influence their booking behaviors.

Shining a Light on the 2017 Hotel IT Visionaries

In the hospitality arena, there’s no shortage of innovation visionaries. With hotels embracing everything from cloud-based PMS solutions to streamlining front-desk activities, the new area of hotel IT is here, and the most forward-thinking hotel brands often drive these paradigm shifts.

To recognize these companies, for the past 13 years, Hospitality Technology Magazine has been honoring hotels for outstanding leadership in customer-facing and enterprise innovation. Following are this year’s winners of the publication’s Visionary Awards:

  • Hyatt International: The leading global hospitality provider won the “Enterprise Innovator” award for re-imagining the front desk experience to turn transactional experience into personalized experiences for all guests.
  • La Quinta Inns & Suites: By creating the Redeem Away! Program, an industry-first benefit strategy that allows loyalty members to redeem points anytime for many everyday purchases with a linked Visa credit card and mobile phone number, La Quinta Inns & Suites was bestowed the “Customer-Facing Innovator” award.
  • NH Hotel Group: To overcome technology integration issues, NH Hotel Group was named the “Enterprise Innovator” for developing and deploying a unique, innovative, single and centralized solution: the Digital Core Platform. The solution is accessible from the cloud, and was based on open technologies that would reduce the hotel’s dependence on outside players while at the same time offering avant-garde technology. 
  • Watermark Luxe Cottages: David and Susan Barton transformed an old fishing campground into a deluxe getaway: Watermark Luxe Waterfront Cottages. What makes this property unique is that it leverages a technology ecosystem to maintain efficient operations while servicing guests all without a staff present. This effort garnered them the “Customer-Facing Innovator” award.

We would like to congratulate all of these 2017 Visionary Award winners. To read more, please click here.

 

Need for Microservice App Development in Hospitality Arena

In the enterprise IT arena, microservice architecture development, also known as microservices, has grown in popularity. This IT approach allows for the structuring of an application as a collection of loosely coupled services, which supports overall business capabilities.

Microservices enable the continuous delivery of large and complex applications, while also helping an organization to evolve its technology stack. In other words, this is a very small component of software that focuses on doing one thing really well – rather than writing one massive, and cumbersome application.

In the hotel technology arena, this concept is certainly something that all hotel brands should strongly consider.

With the ever-growing amount of applications and new innovations – from online concierge services to booking engines to property management systems – this approach allows any enterprise to better build a comprehensive solution.

Microservices also allow hospitality providers to leverage the right APIs for an “as a service” solution, which is much more cost-effective, and easier than building out and managing their own complex systems.

From a guest services perspective, there are new mobile applications that offer personalized recommendations for local attractions, events and restaurants. These types of apps are also evolving to the point where all hotel IT staff needs is the API, which quickly provides a guest-facing solution for true competitive differentiation.

By breaking down single “monolithic” APIs into many smaller API services, we are seeing a major IT shift happen right before our eyes. Instead of hospitality providers developing a single API, single technology stack, and single database which require overhauling for updates, security, or scalability, IT development teams can now decouple services for faster and more effective deployments.

This new future of IT development will ultimately open up a whole new world of solutions that support revenue generation for hotel brands.

 

Where is Experience Going in Hospitality?

If you do a simple Google News search about the hotel guest experience, you will come across a wide-range of articles about how this is the new frontier in hospitality. From new innovations to catering to the more affluent traveler, the concept of making a hotel stay a unique experience has fully taken hold.

Of course, offering a “truly unique guest experience,” is much easier to read about than to actually create for travelers. But in due time, we may see that providing these experiences will become a commodity – with many hotel brands providing similar offerings, which will in turn, make them not unique.

However, independent hotels seem to be on the forefront of this trend, and for now, this is translating into business growth. According to new research, performance of independent hotels in the United States has been on a steady growth trajectory over the past year. In addition, demand also outpaces supply, creating a favorable operating environment.

Independent hotels cater to the more forward-thinking traveler, who want to make new personal connections in the lobbies, leverage mobile innovations, and have experiences that will reinforce and shape their individual identities.

This is one arena where Airbnb cannot compete. While many travelers are embracing the idea of staying in another person’s apartment or home – and “live like a local” – one cannot truly have a unique guest experience in an Airbnb. There is no hotel staff to provide insights into local attractions, and there are no built-in guest innovations to help serve as digital concierges, or opportunities for personal networking in lobbies.

As with any industry, there are trends that take hold with many jumping on board as the train takes off. The idea of providing a unique guest experience is upon us and worth considering. Although we’ll keep an eye on how long it will last, and which hotel brands emerge as the winners in this frontier.

 

The Connected Generation and Messaging with Hotel Guests

In the travel arena, effectively communicating with guests is one of the biggest challenges. From having stretched internal resources to guests threatening a brand’s reputation on social media, the hospitality arena is fraught with many communications pitfalls.

In addition, a new study found that 87 percent of U.S. travelers have never messaged with a hotel brand. In today’s text-messaging world, this seems like a confounding statistic. However, this comes down to the reality that not all travelers are part of the connected generation, and would view a message from a hotel as being intrusive.

This is especially true if the messages are completely unsolicited offers that have no connection to the guest’s interests. Of course brands can look into developing the right strategies that leverage guest data to provide more customized offerings. For example, you can offer a fitness enthusiast information about your exercise facility, or nearby yoga classes.

However, as highlighted in the recent study, the playing field for messaging with guests is still very nascent. As such, hotel brands should consider developing guest communications strategies that are iterative and grow over time. The connected generation will continue to increase, as more and more people view a text from a company or brand as not being intrusive.

It won’t be too long until receiving a text message from a hotel will be as normal as the messages that we all receive from Airbnb when we book a stay. Of course, with Airbnb, the guest is being connected directly with the property owner in advance of the visit – a vital tool for discussing and accessing the property and other “house rules.”

This all comes down to offering the guest real/actionable information that can help enhance their trip – not just providing an offer. People no longer want to “be sold to,” but sales can increase when the messages are customized and provide a path for smooth traveling.

 

The Road to Guest Satisfaction and Loyalty Lies in Data … But There is a Catch

In every industry, there is a push to best leverage customer data in ways that help best influence buying behavior. In the hospitality arena, many larger brands are now collecting data at every point in the guest stay cycle – with the desire to enhance bookings based on travelers’ past purchasing habits.

The reality is that it is very easy to collect data from every touch point in the stay cycle. However, hoteliers should consider creating goals before starting off on developing a large data repository of guest behaviors.

The reason? Collecting and storing data costs practically nothing, and requires a minimal lift for hotel brands. The catch is making sense of the data, which starts with creating the right foundation.

Here are some tips for creating the backbone that best leverages guest data:

  • Make sure everyone involved in gathering or providing the data knows how it will ultimately be used.
  • Align the data gathering effort to tangible business goals.
  • Generate a list of questions that you want the data to answer. The better the questions – from both qualitative and quantitative perspectives – the better outcomes.
  • Keep the overall effort very simple, and avoid complexities that will run up costs.
  • Continually iterate efforts to achieve better results faster.
  • Design your collection methods to be painless for the guest, and only use a form when absolutely necessary.
  • Always be willing to give the guest something and think about what’s in it them. Avoid gifts that have social consequences such as free drinks at the bar.

The most opportune way to gain guest long-term loyalty is to build a data foundation that can be used in the future. Once this ground work is in place, the next phase is developing strategies for generating meaningful and actionable results, which we will be covering in future blog posts.

The New Emerging Traveler Category: Generation Z

For many years, there has been plenty of hospitality industry media coverage about how to best cater to the Millennial traveler through innovation and more. We have learned that this demographic seeks out unique experiences, prefers a communal atmosphere in hotel lobbies, and wants to use technology to be best connected to brands.

But now, just as we have begun to fully understand the Millennial traveler, another emerging generation is beginning to capture the attention of larger hospitality providers. Generation Z, also known as Post-Millennials, the iGeneration, Plurals or the Homeland Generation, has come on the scene. But the good news is they are very similar to Millennials.

This demographic has completely grown up on technology, and many believe seek more security, since they grew up during the Great Recession.

According to a recent Hotel News Now article, these guests are looking for an authentic experience that “feels like it is high quality without feeling pretentious.” In addition, a 2015 study about Generation Z showed that 77 percent of them feel that it’s important for brands to reach out to them with offers, promotions, and messaging.

These insights show that hotels will need to continue building authenticity into the DNA of their brands. This will include everything from creative content marketing to appeal to this generation, as well as developing programs that are truly “experienced-based.”

In fact, Marriott’s Innovation Lab in Charlotte, North Carolina, was developed with Generation Z in mind.  Designed as a testing ground for new products and services, this program found that while baby boomers expected consistency at any Marriott hotel around the world, the next generations are more interested in unique, culturally specific experiences.

By taking a page from Marriott, hoteliers have the opportunity to gain long-term guest loyalty from this demographic. It will involve many of the same strategies for appealing to Millennials – just with more of a focus on innovation and experiences.

 

Hotel Brands Aim to Redefine the “Local” Experience

For many years, major hotel brands focused on catering only to the traveling guest. However, now there is a subtle shift, where hospitality providers are widening their approaches to cater to locals who live near their properties.

In addition to aiming to get locals to dine at their properties, they are offering a wide-range of services, such as holding packages and coordinating dry cleaning services – all with the intention of creating a closer bond with neighboring residents and businesses.

At the company’s recent analyst conference, AccorHotels CEO Sebastien Bazin announced the launch of a new pilot program called “Accor Local,” which is looking to change how the brand operates on a localized level.

“Ninety-nine percent of what we have done for 50 years has been based on the guy coming from outside of town,” said Brazin in this recent Skift article. “A traveler, from a different city, from a different country, which I think is interesting, but not too smart. Because we missed a population which is 100 times greater and better and easier: The guy living next door. The local inhabitants. They live around the hotel, or they go to an office around the hotel, and 90 percent of them never dared coming into the property, because they’re fearful that we’re going to be asking, ‘What’s your room number?’ They don’t need a room, but they may need a service.”

According to the same Skift article, AccorHotels’ loyalty program, Le Club AccorHotels will most likely serve as the foundation for the Accor Local program.

For other brands that want to follow this trend, there are new guest recommendation applications that put a hotel’s local curated knowledge right at guests’ – and locals’ – fingertips. This means offering completely customized recommendations for local restaurants, attractions, concerts and other events.

In addition, these types of mobile apps allow hoteliers to compile relevant guest (or locals) data about on- and off-property preferences.

Going local seems to be an emerging trend for some of the most cutting-edge brands. Fortunately, there are ways for hoteliers to offer highly customized experiences and services that expand beyond catering to the traveling guest into an entirely new untapped market.