We recently caught up with Ryan MacDonald, Vice President of Revenue Management and eCommerce at Palm Holdings, about the shift in approach to hotel loyalty strategies. Ryan will be joining a panel of hoteliers at the upcoming Direct Booking Summit: Miami to share his own experience of creating loyalty strategies that can help to unlock a whole new guest demographic for hotels of all sizes.
Make sure you join us at Loews Miami Beach Hotel on October 22-23 for his session, Has technology twisted the concept of loyalty?. Find out more about the panel discussion and check out the full agenda here - or read on for a sneak preview.
Why do loyalty programs matter?
At Palm Holdings, we see that loyalty members are 1. willing to spend more on accommodation; 2. travelling to our hotels more frequently than other customers; 3. willing to be a bit more forgiving if something doesn't go well during their stay. The latter is especially interesting - if a hotel doesn't deliver top service for one reason or another, the guest knows that it isn't the usual standard of the brand and are willing to show compassion without becoming frustrated with the experience.
How has the concept of hotel loyalty changed over the years?
I guess the biggest change is that most hotels now offer a loyalty program, which definitely didn't use to be the case! The concept of loyalty has also widened to include more than just points.
In the past, loyalty points used to only be redeemable at a hotel property. Now, loyalty schemes offer things like experiences - for example, a culinary class or a hot air balloon ride!
You have to keep up with the times - we're now looking at a much younger demographic of loyalty members than used to be the case. You need to tailor your loyalty programs to their wishes and needs to stay relevant.
Also, the objective of signing up for a loyalty program has definitely shifted from getting a good deal on staying at the same hotel again, to being able to make the most of a loyalty program's offerings.
So, given that objective has shifted, what role does loyalty now play in a direct booking strategy?
For us, loyalty is a key part of direct booking strategy. We make sure that our offers are not only relevant but also competitive in the market. We have hotels across Canada, the US and more, and some of them are located around tourist attractions. These places are populated with many other hotels. We need to make sure that our members are getting recognized, and that our offers are relevant to them.
IHG members have multiple hotels to choose from, so as part of that brand we recognize that these members are our top guests and their demographics or reasons for visiting a hotel might be very different. That's why we need to make sure every hotel's offer is relevant to these guests specifically.
Can loyalty be a differentiator for hotels competing with OTAs?
Offering new, exciting things to loyalty members is important, because for example Expedia offers an easy loyalty program - book 10 night and get an 11th free. Now that Marriott allows using points for experiences, such as game tickets, we're attracting a new demographic that we didn't have in the past. It's a competitive market when it comes to rewards programs, and it's exciting to see hotel brands thinking outside of the box. That makes booking direct even more exciting!
And how has technology impacted loyalty schemes? Now everything is done through an app! You can do anything - don't need a room key or wallet. Hotels need to keep up. Loyalty members want autonomy. Make sure that you can meet their technology needs and expectations.
You're joining the Direct Booking Summit as a speaker for the second consecutive year! Why were you excited to come back?
The Direct Booking Summit brings hoteliers together to talk about the real issues we're all facing so that we can work together to resolve them. There are no wholesalers or OTAs in the room, just hoteliers and some selected vendors dedicated to driving more direct bookings!
At last year's Summit in Dallas, I was surprised to discover that the challenges of independent hotels were very similar to those that branded properties are facing. Not only did we have the same issues, but we could also learn from each other!
So what can attendees expect to learn from your panel? Different ways of looking at loyalty. We'll be asking questions like, "what can you do as a branded property beyond brand components?" And we'll be looking at what we can all learn from both independents and chains.
Join us on 22-23 October at the Direct Booking Summit in Miami to learn more from Google Travel, Hilton, AccorHotels, Wyndham Hotels & Resorts, MGM, Hard Rock International and other key industry players. See you there!