For today's hospitality brands, loyalty programs are as much about repeat customers as they are about controlling distribution costs. Often times that means strategy at the property level, rather than at the brand level.
Today we are publishing our latest report for our Research subscription service. This time we address The State of Loyalty in Hospitality and how hotel brands are leveraging various schemes to build direct relationships with their customers. There’s a lot at stake with loyalty; different properties use these programs and strategies in different ways.
Branded hotel chains such as Marriott and Hilton deploy an asset-light strategy when it comes to growing their portfolios of properties, using the franchise model to grow their global footprints. Brand loyalty is one of the key offerings that these big chains have to offer hotel owners. Hoteliers sign up for franchises and branding agreements under the impression that it will help them fill rooms in a way that they might not have been able to without recognized branding.
Many consumers find themselves members of multiple programs for the sole purpose of collecting points, without really having any strong loyalty to one brand. Often, points-focused travelers instead opt to book through online travel agencies (OTAs), which have their own rewards programs, simply because it gives them more realistic chances to earn free stays than traditional brand-based memberships might.
“Even programs that say they don’t do blackouts, what they’ll do is only have a couple of room types or rooms available that you can redeem for,” says Jeff Low, founder and CEO of Stash Hotel Rewards, whose company uses dynamic rates for redemption. “With dynamic pricing, our partners are always happy to see someone redeem because they’re getting the rate that they set. I think that more hotel programs will hopefully move in that direction.”
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