A Restoration in Hotel Loyalty: Developing a Blueprint for Reinventing Loyalty Programs
In October 2012, Deloitte’s Travel, Hospitality, and Leisure practice engaged in extensive consumer loyalty research, surveying over 4,000 travelers and conducting two in-depth focus groups with frequent business and leisure travelers. This research has given us deep insights into hotel guests’ travel behaviors, attitudes, and engagement preferences.
Developing a blueprint for reinventing loyalty programs
In this report, "A restoration in hotel loyalty: Developing a blueprint for reinventing loyalty programs", we explore how to increase the effectiveness of loyalty programs. Our research points to two over-arching and compelling conclusions:
- The best-case scenario is that hotel loyalty programs as they are constituted today have either little or no impact on travelers’ purchase decisions, and, worst case, these programs drive undesirable brand-switching behavior.
- Hotel brands and owners that choose to instead build differentiated loyalty programs and a customer experience that anticipates and integrates priority customers’ personalized needs have the potential to capture incremental market share, as indicated by these facts:
- Roughly 30 percent, on average, of hotel loyalty members are “at risk” of switching their preferred brand
- Nearly 50 percent, on average, of hotel loyalty members’ annual hotel spend is not with their preferred brand
Despite these sobering statistics, we are excited for the future because hotel brands and owners are well-positioned to restore loyalty in their brands. Within this report, we provide strategies for companies to consider as they endeavor to rebuild their loyalty programs, these strategies include:
- Encourage specific behaviors with unexpected rewards
- Make rewards personally meaningful
- Provide in-the-moment accessible rewards
- Be forgiving; don’t penalize behavior that loyalty programs encourage
- Reshape the customer experience
- Reinvest in capabilities and infrastructure
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