Nurturing guest loyalty is a key aspect of any successful hotel group’s commercial strategy. Get it right and you bolster one of the most important booking channels and create a band of powerful brand advocates. Fail to meet the demands of an increasingly expectant clientele and there’s no shortage of other schemes for frequent travellers to choose from.
It’s little wonder, then, that players across the hotel sector are putting more emphasis on researching what their guests want from loyalty schemes and rethinking, or, in some cases entirely overhauling, their programmes.
While IHG, which has more than 100 million members in its IHG Rewards Club, has slowly but surely been enhancing its programme since 2015, Hilton Worldwide announced a completely new system at the beginning of the year that gives its 60 million loyalty members unprecedented flexibility on how to redeem their points.
Not only can members of the new scheme (which replaced the HHonors programme after three decades of service in January) use their points to purchase products on Amazon.com, they can also redeem their points for an award night, or a stay using a flexible combination of points and money, which can be easily calculated using a points and money slider, and combine – or ‘pool’ – their points with up to ten friends or family members for free.
IHG has also made it easier for its rewards club members to redeem points. In addition to flexible features like No Blackout Dates on Reward Nights, and the ability to use a combination of points and cash, members can earn points right away through hotel stays, car rentals, dining out and more.
Direct benefits
Moreover, thanks to the group’s Book Direct initiative, which was rolled out last year across certain European markets, guests are guaranteed that they will get the lowest price when they book their hotel stay directly through the club.
“This campaign has helped IHG achieve an almost 20% channel shift towards our direct channels, and a tripling of online enrolments,” says Apurva Pratap, vice-president of distribution and commercial marketing at IHG Europe.
It is not enough merely to join a database and receive a reward; people want a sense of belonging. They do not just want to log in, and link up. They want a relationship.
“Guests can save up to 7% by booking their hotels through IHG Rewards Club, with travellers saving up to £20 million a year on stays across Europe.”
AccorHotels, meanwhile, has started to focus more on ‘surprising and delighting’ its 20 million Le Club members, explains vice-president of sales, distribution and loyalty, Chris Roe: “There is a very simple scheme, clearly stating what points you earn for every euro, pound or dollar you spend, and what that means in terms of reward points.
“Customers can also spend their points on ‘money can’t buy’ events such as VIP seats and backstage passes at the tennis finals at the O2 Arena.
“They know they can use points to stay in a hotel anywhere in the world, but AccorHotels also wants to give them something that they wouldn’t expect from a hotel chain.”
Recognising uniqueness
Choice and flexibility might be crucial when it comes to rewards, but what’s even more important to loyalty club members is recognition, something IHG realised and responded to in 2015, when the group announced a new echelon to its loyalty programme.
“Spire Elite was introduced in order to recognise IHG’s most loyal members and came about following extensive research into what IHG Rewards Club members wanted from loyalty programmes,” Pratap explains.
“It’s a way of saying thank you to our most loyal members, who will benefit from the ability to earn 100% extra bonus points on all qualifying stays across the IHG hotel portfolio.
“Elite members also have the benefit of exclusive rates, free internet, points that don’t expire and exclusive Hertz Gold Plus rewards, plus complimentary room upgrades.”
Just as crucially, IHG’s trends report, Meaningful Membership: Transforming Membership in the Age of I, found that consumers not only wanted their uniqueness to be recognised they also wanted to be part of something of value.
“It is not enough merely to join a database and receive a reward,” Pratap stresses. “People want a sense of belonging. They do not just want to log in, and link up. They want a relationship. Guests are looking for loyalty programmes that not only recognises and rewards their loyalty but also recognises the universal needs of the community, through personalisation and what resonates with individual members – their likes and dislikes, what they need and when they need it.”
For this reason, the group recently made major changes to its programme to enhance the individuality of each membership, a prime example being the introduction of ‘pre-stay preferences’ by which members are able to personalise every element of their stay prior to check-in, from the floor level of their room to the type of pillows on their bed.
If Mr Smith has complained that his breakfast wasn’t very good in the previous hotel, it would be great for that to be recognised in his next stay.
At AccorHotels, which last year acquired Fairmont Raffles Hotels International (FRHI), and will therefore contend with the task of marrying two different loyalty systems over the coming years, the goal will be to take the best of both worlds and combine them into one integrated scheme.
“The Fairmont luxury brand was more around recognising the customer’s requirements and needs, and understanding what they want, and while that’s really important to Accor guests, I think it’s where we have the ability to learn from that luxury sector, and adapt and evolve to get better at recognising customer needs within the budget and mass market,” Roe believes.
“On the other side, FRHI has never really been around points. When the two schemes merge, members will have a points-based scheme as well as one founded on recognition, meaning Accor customers benefit from more personalisation, and FRHI customers can access a lot more hotels and have a lot more global reach in terms of points and partnerships with airlines.”
It’s not going to be an easy process, however. “FRHI only has around 100 properties, so there isn’t a large volume of guests, but there are 4,000 properties in the Accor network all over the world,” Roe explains. “A key question we need to ask is ‘how do you scale the personalisation that customers want to brands like Ibis Budget?’. It might be that the recognition in an Ibis will never be as high as it is in a Fairmont or Sofitel. The biggest challenge is scale versus personalisation.”
Behind the scenes
The level of personalisation that groups like IHG and AccorHotels are already achieving has largely been made possible through the use of technology. For example, not only does IHG use data captured on guest arrival report and pre-stay preferences to offer more personalised, promotions, customer service and rewards that fit members’ stay patterns and personal needs, the team also uses social media networks as data sources in order to understand members’ concerns and experiences, and spot emerging trends.
Similarly, at AccorHotels, information, including credit card details and guests’ preferences – from their welcome drink of choice to their favourite pillow type – are already stored in the back office and are increasingly being used to personalise the check-in process.
“The UK hotels are gradually converting to the new welcome programme,” Roe notes. “At Ibis Cambridge, for example, there is no reception desk, just a boutique coffee shop where team members, who are visible in informal red T-shirts, approach guests directly with a smartphone to greet and check them in.
“They’ll ask your name, see you’re a Le Club member, and be able to offer you your usual welcome drink. As Le Club members are preregistered, we also know their credit card details, so can give them their key card immediately. The check-in process is much quicker and more personalised.”
The ultimate goal is to have a single customer view for all loyalty members, whether they were original Le Club members, or came from FRHI.
Make it better
On top of transactional history and preferences, the tool will also include information about each member’s customer service interaction complete with questionnaires they’ve filled in or complaints they’ve made.
“If Mr Smith has complained that his breakfast wasn’t very good in the previous hotel, it would be great for that to be recognised in his next stay,” Roe remarks, adding that while technology can certainly have a big impact on how personal the hotel experience is for loyalty members, there’s no substitute for human interaction.
It’s about bringing people out of the back office to the front office, taking the reception desk away and making it a little bit more personable.
“On peak nights, when there are a lot of corporate customers at the hotel, general managers and front of house teams are encouraged to throw cocktail parties or informal gatherings to meet with Le Club members and ask them questions about what has been done well and what might be improved. It’s about bringing people out of the back office to the front office, taking the reception desk away and making it a little bit more personable, but at the same time satisfying customers’ needs.”
Something to remember
In the same vein, IHG is currently piloting behavioural science research in 30 of its hotels across Europe to explore how the group can make recognition at check-in more memorable and thus make the experience even more personal to guests than it already is.
When combined with choice and flexibility in how points can be redeemed, this level of personalisation is fast becoming an expectation for the frequent travellers of today.
