How Singapore is Building the City of the Future Sponsored This content is created collaboratively with one of our sponsors.
Brand loyalty in the travel industry has been an achilles heel with few being able to engender much of it. Miles and points are great, but it will be the experience, as well, that will make people keep coming back for more.
Hotels cater to elite members of their loyalty programs because they bring in lots of revenue. But even the elite aren’t overly loyal to a particular brand.
With brand loyalty ebbing as the age of the average guest skews younger, winning a hotel booking is becoming an increasingly rough and tumble endeavor.
That’s one of the sobering conclusions hoteliers will have to consider from a just-released white paper, “Who’s Sleeping With You? Detailed Look Into the U.S. Online Hotel Guest,” written by Henry Harteveldt, travel industry analyst for Hudson Crossing, using data from Adara, which helps hotel brands leverage Big Data to target prospective guests.
The study found that 40% of U.S. travelers who book on hotel websites belong to that hotel’s loyalty program at an elite level, and that they have wandering eyes: They average nine searches of other brands.
And, those 13% of loyalty program members who are at the basic level and book on hotel websites search other brands even more than the elite, averaging 11 searches, the study says.
And, when you consider that 47% of leisure travelers who book on hotel websites and 92% who book on online travel agency websites don’t belong to any hotel loyalty program, then you get an idea of the challenges that hotels face for repeat business.
“No guest business should ever be taken for granted, but hotels really don’t own their loyalty program members,” Harteveldt tells Skift.
Hoteliers should know that their loyalty program members “are also members of their key competitors’ programs,” Harteveldt says. “Even among your elites, they will shop other brands.”
This isn’t hoteliers’ only problem.
The study points out that hotel guests are skewing younger, and that Gen Y-ers, travelers age 24-36, now make up the largest group, accounting for 33% of guests. Guests age 18 to 23 make up about 10% of U.S. hotel guests.
And, with Baby Boomers (29%) fading as the dominant group, younger guests are less loyal in their lodging choices, the study found.
“It’s almost as if every stay is up for grabs,” Harteveldt says.
With leisure travelers who book online getting younger, on average, and often using mobile devices for research and booking, hoteliers need to realize that it is vital to get their messages out at the right time on mobile and other channels because online travel agencies generally have larger marketing budgets and they will be vying for room those bookings, Harteveldt says.
If the hotel doesn’t effectively advertise, then the traveler might not consider that hotel’s brand, or might ponder another brand first, he adds.
All of this dovetails, of course, with Adara’s business.
In that regard, the study found that members of a hotel loyalty program are 2.5 times as likely to “take action” after viewing online ads that are relevant to their travel-related searching and booking patterns, and that adding more customer data points in the messaging leads to better performance of travel ads.
“Understanding the guest on every possible level isn’t a ‘nice to have’ for hotels, says Layton Han, Adara’s CEO. “It’s a key strategic priority.”
“How well digital advertising campaigns succeed in converting online lookers into hotel bookers will depend on rich data, the insights derived from it, and the ability to act on it,” Han says.
Other findings from the study are included in the following Infographic: