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March 18, 2013 / BSP Marketing

2015 Brand Loyalty in the Hospitality Industry

Are you one of the rare breed of travelers that always stays at the same brand of hotel? Will you only stay at a Hilton brand hotel, or are you partial to Marriott? Deloitte released the results of a survey they commissioned to better understand the behavior of the traveling public. The survey, entitled  A Restoration in Loyalty, found that only 8 percent of the 4,000 respondents said that they were completely loyal to the same hotel brand.
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Brand_Loyalty
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Brand Loyalty by Industry

Developing brand loyalty is more important in some businesses than others. A trip to the supermarket will show that shoppers are very brand loyal to some products and choose other products based strictly on price. When most people think of buying ketchup, they will only have to decide whether to buy a 16 ounce bottle of Heinz or a 28 ounce bottle of the tomato-based condiment. Cereal companies also have very loyal customers. While people will insist on Kellogg’s Frosted Flakes, they will be happy to save a few cents by purchasing the store brand of milk.

Some people will only buy a Ford. Some are Cadillac owners for life. When it comes to motorcycles, you should never try to sell a Honda to a loyal Harley Davidson rider.

While executives in the hotel industry are aware that their business does not generate the same kind of brand loyalty like consumers who will always choose Coke over Pepsi or an Apple instead of a Samsung smart phone, they still recognize the importance of building a brand for their hotel.

Inside the Hotel Industry

Consumers are much more driven by price than loyalty when it comes to selecting a hotel. To most, a three star hotel by Holiday Inn or Best Western is on the same level as a three star hotel by La Quinta or Ramada. Thus if a person is traveling on business to Charlotte or St. Louis and is looking for a $100 per night room, their choice of hotels will boil down more to location than to the particular brand of hotel.

Brand loyalty tends to grow stronger when you are talking about luxury hotels as discriminating travelers may develop a preference based on past experience with a certain luxury hotel brand. When a luxury hotel goes out of its way to create a unique experience that is hard to find elsewhere, it creates a stronger bond with their guests.

1) Hotel Reward Cards

Issuing hotel reward cards has been a major tool for building loyalty in the hotel industry for more than a decade. Reward cards allow holders to accumulate points that they can use for free rooms or upgrades when they stay at a particular hotel brand. They also provide valuable information for the marketing department of hotels.

While the Deloitte study indicates that not many hotel guests make their final decision about which hotel to stay in based on the brand of the hotel, there are about 50 percent of consumers who are happy that the hotel they are staying in has a hotel loyalty card program.

2) Lowering the Value of Hotel Points

It may seem odd that so many national hotel chains have decided to increase the number of points a hotel reward card holder needs to earn a free room. Companies like Hilton, Starwood and IHG have all recently announced that they are charging more points for a free room. They are dividing their hotel brands into a larger number of categories and boosting the point requirements on the highest quality hotels.

While this translates into less value and higher costs for card holders, there are some exceptions where economy level hotels are keeping the points the same or even lowering them slightly. Perhaps hotels are realizing that it is just not worth the cost because loyalty card usage does not necessarily mean bigger profits.

3) Living in the Age of Readily Accessible Information

Smartphones allow consumers to shop and compare hotel rooms and rates at any time or any place. There are numerous review sites online that rate hotel accommodations and experiences. With consumers being armed with so much information, a hotel has to really deliver a superior experience to sway customer loyalty.

4) Cutting Edge Hotel Loyalty Programs

Today, there are a number of innovative ways that hotel loyalty programs are gaining repeat customers. Instead of just offering a free room with every ten stays or taking 10 percent off the bill for hotel reward card holders, the rewards are getting better and more unique.

There are special experiences you can only get by being a member of a hotel rewards program. For instance, hotels may arrange for lunch with a celebrity if you have enough points or a cooking class with a world-famous chef. How would you like to fly on a private jet to a tropical island resort in the Caribbean? If you can think of a unique adventure, there are some very creative hotel marketing directors that can make it happen
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Important: What do Guests Want?

Depending on reward programs, coupons and special online rates to build customer loyalty may have worked in the past, but today’s more informed and sophisticated traveler is more influenced by the services and amenities that a hotel provides.

Hotels are more likely to attract and retain loyal guests by improving guest experiences. Visitors will respond better to comfortable mattresses and extra fancy linens than they will to a free basic breakfast buffet. Hotels that are constantly upgrading their property and services instill confidence in customers.

Engaging the consumer in a meaningful way is always a challenge. All methods from traditional advertising and social media to reward cards and special experiences should be considered. Hotels are in the people business and the relationship with guests is the key to hotel loyalty. When a hotel is able to establish consistent quality and also add amenities that add value to a hotel stay, guests leave with a good feeling and will want to come back.

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