The hospitality industry has never faced a challenge like the 2020 outbreak of Covid-19. Many hotels are at low occupancy or vacant, significant numbers of industry employees are furloughed, and few experts can agree on when travelers will come back in significant numbers. But despite the hardships, now is not the moment for hotel executives, owners, and operators to retreat. Instead, the hotel brands that will ultimately survive and thrive in a post- Covid-19 world are already planning their recovery strategies and what hospitality will look like in the future.
It is amidst this unprecedented moment of change that more hotel executives are taking a fresh look at one of the most popular, but also misunderstood, aspects of the hospitality business: loyalty programs. On one hand, loyalty programs have never been more popular. Consider the results of a 2019 study conducted by YouGov, which found that 64 percent of consumers in the U.S. were already members of at least one loyalty program. On the other hand, travelers don’t appear to be engaging with loyalty programs in ways that create meaningful long-term relationships with hotel brands. That’s underlined by the findings of another recent loyalty insights study, which reported in 2019 that of 14.8 million memberships, only 6.7 million were active.
What these findings suggest is that designing a loyalty program solely focused on collecting huge numbers of points is no longer enough. In order for loyalty to deliver results in today’s rapidly changing hospitality sector, owners and operators need to reassess why they operate a loyalty program in the first place. That means moving away from short- term engagement tactics like sign-up bonuses that suddenly lack importance during a global crisis. In their place, loyalty programs must start the hard work to foster sustainable long-term relationships with travelers. It’s only by shifting to this new mindset that hospitality businesses will truly begin to understand and respond to customers’ needs at every step of their journey.
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