GOING LOCAL KEY TO HOTEL LOYALTY PROGRAMME SUCCESS

By Gemma Greenwood – Journalist, founder and partner for Content Inc.

From hotel staff training, engagement and buy-in, to offering members instant and meaningful benefits, and collaborating with in-destination partners, a focused local approach is key to maximising global loyalty performance, HSMAI region Europe’s Spring Curate concluded

 

For global hotel loyalty programmes to truly succeed, they must be executed consistently at property level, with General Managers getting hotel teams on board and local partners involved.That was the consensus at HSMAI Region Europe’s Spring Curate, which delved into the evolving travel loyalty landscape to ascertain actionable steps for improving the effectiveness of hotel loyalty programmes and enhancing guest engagement.Entitled ‘Supercharge Your Loyalty Programme – Captivate Today’s Travellers and Drive Substantial Revenue Growth’, the online Curate, on April 19, was orchestrated by HSMAI Europe partner Plusgrade, which specialises in loyalty currency retailing for leading hotel, air and cruise companies.

Co-moderating the event, which included a loyalty industry overview followed by two HSMAI member breakout sessions where many key action points were identified, were Plusgrade’s Vice President Business Development, Hospitality Ancillaries, Dan Hiza, and the company’s Chief Revenue Officer, Hospitality Ancillaries, Paul Rantilla.HSMAI Europe members unanimously agreed that more work needed to be done to engage teams, guests and partners at local hotel level, with the following action points identified as immediate wins that would contribute to their loyalty programme’s global success.

Action points identified as – immediate wins

Team training for maximum impact:

Consistent and continual staff training is needed to equip hotel team members – particularly those working at the front desk – with all the information they need to ensure properties and guests get the most out of the loyalty programme. Led by passionate general managers, this training should encompass every aspect of the programme to boost enrolments, as well as member engagement, usage and satisfaction. Furthermore, if internal staff are to understand and believe in loyalty programme advantages, they should be offered the same benefits as members. If the programme is relevant and attainable to them, they will sell it better, Curate attendees agreed.
“Executing the operational benefits consistently, is not exciting, but it’s impactful,” said one HSMAI member.

Make sign-up incentives immediate:

Ensuring teams know if there are incentives for signing up new loyalty members is also crucial and one brainstorming session stressed that offering immediate on-site benefits to members would be impactful; a complimentary spa treatment or meal at the hotel, for example. Staying with the incentivisation theme it was noted that loyalty incentives for those signing up and/or booking through direct channels should be more attractive than those offered through third parties.

Local experiences a gamechanger:

Curate attendees felt it was important to localise the loyalty offering on property, stressing hotel teams should be “looking outside of the box” to establish partnerships that would be meaningful to guests and current or potential loyalty members, rather than bog-standard global offers that can seem irrelevant or out of reach.

“Hotels should be establishing partnerships with non-traditional loyalty partners to be omnipresent,” said one. “Start small with some local partners and collaborations to offer incentives and special events.” For example, one hotel in Spain offers its loyalty members the option to exchange points for local experiences such as attending a Flamenco show.

Earn and burn on anything:

Offering members total flexibility, with the opportunity to earn and burn points on anything and everything, was also cited as a key action point that would boost loyalty engagement and longevity considerably, as well as spend on other in-hotel items. “We need to move away from the traditional points exchange and earning and burning on room bookings only,” said one curate attendee. “Members should be able to earn and burn on F&B, spa, and more, with partial or full redemption available.” The opportunities to earn incremental revenue from taking this approach were noted, with guests more likely to book spa treatments if they earned points. And, if they could use their points to pay for a meal, they might order extras with a higher value – a premium wine instead of the house wine, for example. Flexibility and choice is also crucial, and one of the HSMAI brainstorming groups said hotels should have a ‘toolbox’ of immediate reward opportunities from which guests could choose. These should be tailored to suit individual needs; for example, a room upgrade might be more meaningful to a family than a complimentary breakfast.

Communication is crucial:

Hotels need to ensure loyalty benefits are communicated more effectively and directly so that members understand what they have earned and what it is possible for them to achieve in terms of status and benefits. There should be more acknowledgement and recognition of loyalty across all touchpoints, with one HSMAI member highlighting the effectiveness of an in-hotel ‘Did you know’ campaign to clearly communicate how members can make the most of their programme.

Examples of best practice

During their presentation, Dan Hiza and Paul Rantilla highlighted examples of global loyalty best practice. They included:

Partnerships are a gamechanger, experiences matter:

Reiterating the results of the brainstorming session, making it simple for members to use points with partners that matter, whether local or global, is crucial. They quoted Chris Nassetta, President & CEO, Hilton, who said: “You will see many more partnerships on the experiential side. Why? Because our Hilton Honors members want more experiences, and the more we can offer them those adjacencies, the more we think they will remain loyal and we’ll get an incremental share of wallet.” Hilton Honors now empowers it members to buy or bid for experiences using their points. Those experiences range from concerts, culinary and sports events, to intriguing travel packages.

Keeping it simple and flexible:

It was noted how simple sign-ups and redemptions were key to attracting and retaining loyalty members, ensuring all processes were friction-free. Tapping into new travel patterns whereby loyalty programme members might want to use their points to extend a work trip or pay for non-business extras, was a prime example. They cited Elie Maalouf, CEO, IHG, who at the recent IHIF Forum talked about strategies for enhancing the IHG One Rewards programme: “The blending of business and leisure travel is here to stay, and this hybrid business model is driving strategies, such as allowing our members to use their points for ancillaries,” he said. “We want to make it easy for them to use their points.”

Points top-ups and purchases pay dividends:

Offering loyalty members the chance to top-up or purchase points leads to sales and revenue gains, according to data and research revealed by Plusgrade. Dan noted how after launching top-up for one global hotel partner, that company witnessed an 87% increase in total sales across their product suite. Implementing top up helped this partner to grow incremental revenue and acquire numerous new transactors, while minimising overlap with existing products. Top-up can be optimised to target a new member segment at a different point in the customer journey; buying points at time of booking to complete transaction enhances satisfaction and breeds loyalty. In terms of those most likely to top up, it’s members with elite status; they have larger balances and have been members for longer. The average age of top-up members is 44, and 58% of topper-uppers use their desktop to purchase points. In addition, 22% of points purchasers are co-brand credit card holders; they also redeem points 2.4 times more quickly.

HSMAI Europe next steps

The insights generated by Curate attendees confirmed that HSMAI Europe should expand the conversation around loyalty, with a focus on awareness and training at local (hotel) level. Ideas suggested for upcoming events included a loyalty conference to be staged in a major European city and a podcast series, with loyalty now firmly on the association’s agenda for 2024 and beyond.