The End of Hotel Loyalty as We Know It

For years, I have observed hotel loyalty programmes, and I have finally concluded that loyalty as we know it is dead . Well... not dead, but rapidly evolving, with points and redemption models that fail to impress the modern traveller. After several years of healthy debate with hoteliers on this topic, and some alarming research, it is time to revisit this complex and sometimes controversial subject.

• Let us start with the good news. The good news, or opportunity, is that a fundamental shift is taking place in marketing, with a greater focus on the consumer than ever before. This means that smart brands can capitalise on it and gain a competitive advantage
• The bad news? Across 125,000 consumers and 30 categories, only three of those categories were "loyalty-driven". This means that most consumers are not buying the same brand without first comparing it with others, creating serious challenges for any hotel aspiring to compete seriously.

So, what does all this mean for hotels?

Being Considered

First and foremost, your brand is highly vulnerable. You face competitors, OTAs and, increasingly, Google and Airbnb. Consumers essentially have endless options when booking a trip. Secondly, travellers can be fickle as they progress through their research, adding and removing brands along the way. It is therefore vital that hotels focus on initial consideration, meaning being top of mind when travellers are planning a trip or purchase occasion. And even if your brand is part of the initial consideration set, it must remain there. Let us delve deeper into these concepts.

Unlock Your Customer Data

All too often, I hear hoteliers fall into the trap of paying for initial consideration by investing money in search and loyalty programmes. For example, hotels investing €20,000 per month in PPC while their ROI is only 3:1. Ouch!