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Hotel Innovation

Can Hotels Foster Loyalty When They Own Too Many Brands?

With more than 1,000 hotel brands in operation and the biggest hospitality providers expanding their ever-growing portfolios, a recent Skift article asks the question: can hotel companies have too many brands?

The publication used its Skift Forum Europe event as the sounding board for this question to a number of top hotel leaders. The resounding response was “no.” As one participant said, “it’s like being too skinny or too rich.”

Though, in the age of property acquisition to expand their footprints, many leading hospitality providers may find that owning too many brands can create a major challenge – maintaining guest loyalty when there’s just too much to manage.

As highlighted in the article, Radisson is actually taking a different road by focusing on a “less is more strategy.” This approach makes it easier to communicate with consumers and to build brand loyalty by keeping the number of brands relatively small in any one portfolio.

Having the right resources to manage only one brand can be challenging for any major company, especially in an era where guest loyalty can be achieved or lost very rapidly. Further compounding this is the fact that all hotels brands are chasing long-term guest loyalty, which can be too difficult to achieve when the main goal is to grow their portfolios.

Large hospitality providers should consider developing a brand strategy like Toyota. The automotive manufacturer aims to have “life-time” customers who grow and mature with the brand.

For example, a recent college graduate can start with a more cost-effective Scion, then eventually be a driver of a Lexus as their career progresses. Through the entire growth path, Toyota is there with the right vehicle that matches where the consumer is in their life. Many large hoteliers also own multiple brands that can fit into the lifecycle of a traveler as they work their way up the corporate ladder.

Overall, balancing business expansion with brand nurturing efforts can be very challenging. There is no magic bullet for creating and maintaining brand loyalty. The best option is to not forget to invest in the right innovations and talent that help propel a brand into the future.

 

The Evolution of the Front Desk: Take a Page from Innkeepers

“Treating a traveler as nothing more than a walking, talking, grab bag of preferences, attributes, and emotional buttons to be exploited for upselling will backfire on hoteliers.”

With the convergence of technology and data in the hotel arena creating new ways to please guests, the quote above from a recent Skift article reinforces that it’s not all about the data. Today’s hoteliers need to do much more than rely on a “grab bag” of preferences when fostering guest relationships at the front desk.

Guest preferences should be used to create deeper relationships and focus on serving, not upselling. All of the guest data in the world cannot overcome the need to please guests on an emotional level, which needs to happen at the front desk. Relationships can be gained or lost at this initial point of contact. For example, asking a loyal/returning traveler if they have stayed at your property before, can set the relationship back to “ground zero.”

In addition, as this article highlights, savvy guests worry that personalization is only being used to take money out of their pockets. Smart consumers in general know when they are being sold to, and over-selling can create a dynamic that greatly minimizes loyalty.

As such, larger hotel brands should take a page from innkeepers and independent property owners. Many of these smaller players do not have large “big data” systems from which to leverage and design new ways of selling. They rely on the simple face-to-face communications at the front-desk that starts with a conversation.

Smaller property owners are also savvy about pleasing returning guests. If a guest returns, and they know, for instance, that this traveler previously visited the area to visit wineries, the innkeeper will generally ask about this. “Will you be visiting the wineries again?” “May I recommend a more off-the-beaten path winery that I think you will enjoy?” The list of engaging questions and personalized recommendations goes on and on …

Gaining true emotional intelligence when interacting with guests at the front desk is paramount. With competition continuing to increase in the hotel arena, and many large brands aiming to “out tech” each other, much can be gained by actually establishing a face-to-face relationship with travelers.

All of the data in the world will serve no purpose unless it’s being used to in ways to go beyond upselling.

 

 

An Emerging Digital Divide in the Hospitality Arena?

For the past several years, many major hotel brands have been focusing much of their PR efforts on showcasing the latest innovations – from smart guest rooms that leverage the Internet of Things (IoT) to robotic butlers and beyond.

Several brands have also been developing new incubator locations to help fast track the latest innovations into the marketplace. This cross-section of cutting-edge design and new technologies will certainly pave the way for the hospitality industry to be on the forefront.

However, when it comes to bringing these innovations to life, will we see this tech adoption only at key properties in major cities on the U.S. coasts? These are typically the locations that ideally serve as the test markets for the new innovations – further supported by the tech talent, companies and early adopters who tend to live and operate in these regions.

But what may occur is that only properties in these regions will have the latest innovations, with many others in the middle of the country lagging behind. This could result in a new hotel digital divide, which could rapidly widen based on how quickly new innovations are adopted.

Of course, since this is a new frontier, larger hotel brands hopefully will be developing tech expansion plans that could stretch across the entire country. Although effectively implementing this expansion could be a costly proposition for any hotelier. And once this goal is achieved, a new batch of technologies could quickly emerge, which would require even further investment for another round of expansion. And, so the cycle continues …

If hotel brands are challenged with making this investment cycle, this digital divide may continue to grow, and since this is a new frontier … nobody really knows how it will all play out.

Hotel Loyalty Programs and Brand Ambassadors

While there have been many hotel industry articles about how to turn guests into “brand ambassadors,” large hospitality providers may want to consider ways to ensure that all staff also play this vital role.

In other words, to transform guests into loyal advocates, the foundation needs to be in place – with every staff member on a property at the hotel first. One way to achieve this is by making loyalty programs truly about loyalty.

As we highlighted before, the core focus in the hospitality arena should be about fostering relationships with guests. 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. And this goes beyond what many highlight about the value of education and hotel loyalty programs. A guest should have an experience that feels completely personalized, which can increase chances that they will sign up and take advantage of the actual loyalty programs.

In a recent Marketplace interview, Arne Sorenson, CEO of Marriott International, discussed the importance of providing guest experiences. “We’re delivering experiences which people can count on and where they want to come back to us and have those experiences,” said Sorenson. This includes catering to guests’ needs both on- and off-property.

By focusing on providing these experiences, as well as pushing for all staff members to be brand ambassadors, it is possible to achieve the highest level of loyalty – where the guests themselves actively advocate on behalf of your brand.

 

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.

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.

Enhancing Loyalty By Plugging Guests Into The Local Scene

Facebook IQ recently issued a study that surveyed loyalty in 14,700 U.S. adults regarding loyalty in five verticals, including the hospitality arena. While the results were somewhat surprising, it also pointed out some common insights, which are often overlooked by hotel brands.

In terms of the surprising outcomes, Millennials stated that they are more likely than Baby Boomers to be loyal to one brand – though they are challenged when it comes to wanting to communicate with hotels with speed and innovation.

However, the most interesting result from the survey was that travelers across all demographics are looking for unique and authentic experiences during their vacations. As highlighted by Travel Tipper, hotels should meet this need by positioning themselves as invaluable resources to help guests plug into the local scene.

Thankfully, there are new guest recommendation applications that put a hotel’s local curated knowledge right at guests’ fingertips. This means offering completely customized recommendations for local restaurants, attractions, concerts and other events. These solutions also help to minimize the friction that often comes with traveling.

In addition, these types of mobile apps allow hoteliers to compile relevant guest data about on- and off-property preferences. Ultimately, this data will evolve to where it is possible to predict the travelers wants and needs before they arrive – providing even more control.

Loyalty often comes down to sharing the right actionable information. Whether it is a local recommendation or simply remembering a guest’s room preferences, there is much that can be done to help establish loyalty in ways that translate into enhanced revenue. The best first step is to be the sound informational resource that plugs any guest into the local scene.

 

Alienating Guests: A Cautionary Warning About Beacon and Geolocation Technologies in Hotels

It seems that wherever we surf the Internet these days, we receive a customized advertisement or offer based on our browsing patterns. While it may seem that “Big Brother” is actually following us, this is the new shift in digital marketing, and hotels are next to embrace this frontier.

As highlighted by this recent HotelNewsNow article, hotels are adopting the use of beacon technologies, which can be used to direct and push notifications to guests about offerings on-property and in the area.

By using these types of technologies, hotels can track guests’ locations, and then tailor and map out their experiences based on their preferences. This could also include push notifications about a concert, a craft beer tasting at the hotel bar and much more.

Along these same lines, a recent study found that 74 percent of all hotels and resorts plan on implementing location-based technologies within the next year.

On the surface the rise of beacon and geolocation technologies seem like a logical next step in enhancing the stay for the guest, while also enhancing long-term loyalty. However, if overused, these new innovations could back fire, and ultimately turn a “friend into an enemy.” This could potentially occur when offers cross the line into becoming spam, which can potentially turn off guests. In addition, receiving an offer on your mobile device (such as a free dessert) when walking by a restaurant or bar could be perceived as being annoying or even “Big Brother”-like.

For hotels to effectively use these types of recommendation innovations, there needs to be more of a strategic plan that fully understands guests’ preferences. From booking to checking in and beyond, it is possible to provide the right recommendations – that extend well beyond an simple offer – but enhance a guest’s loyalty, versus making them feel “watched.” It’s a fine line.

For example, if you push an offer to a guest about a new vegan restaurant around the corner – knowing that they are vegetarian based on their previous room service orders – then you are offering a more personalized approach.

Gaining guest loyalty is possible with the right recommendation approach, while arbitrary spam could tremendously diminish the brand connection with a guest. Leveraging new technologies to ultimately lose guests and revenue is a strategy that no hotel brand wants to embrace.

 

Airfares Drop to Lowest Point – Potential Business Bump for Hoteliers

According to a recent Salon article, there is a major drop in overall airfares happening right now. The most significant driver for this is overcapacity, with too many seats being available and not enough demand from travelers.

Furthermore, the combination of airlines making seats smaller, the addition of new planes and low fuel prices, is creating regional prices as low as $20 for one-way fares from regional carriers like JetBlue and Frontier.

As a result, we are headed into a holiday season where virtually anyone who is willing to do a little research, and book immediately when they find a deal, can have a very low-cost travel experience.

For hoteliers, this could create a tremendous spike in demand coming into November and December. This demand will most likely create new revenue-generating opportunities, but also put stress on hoteliers when dealing with the challenge of pleasing guests – especially when properties are booked or near capacity. Not being able to meet all guest needs due to overcapacity, combined with an overwhelmed staff, can be a negative thing.

However, by embracing the right innovations for a guest, such as offering recommendations for the best local experiences, it is possible to establish long-term loyalty because the guest feels like their needs are being met,.

Too much of a good thing often comes with challenges. But by preparing for the soon-to-be-over-booked holiday travel season by developing the right innovation strategies, it is possible to come out with the ultimate win. By easily managing a dramatic increase in demand, it is possible to make every traveler feels like they had a positive experience with your brand.