The hotel industry is in the midst of a period of dramatic change. Facing the headwinds of strong online travel agencies like Flight Center and TravelStart, and growing traveler embrace of accommodation-sharing services like Airbnb, hotel chains (big and small) are relentlessly focusing on strategies to streamline operations and innovate their guest experiences. Amidst this dramatic period of innovation, mergers and reinvention, hotel loyalty programs, often considered the most popular feature of hotels’ marketing strategies, are facing a moment of wrenching change.
The past three years have seen an ongoing series of announcements by hotel chains devaluing their points programs in an effort to improve profitability. Meanwhile, dissatisfied loyalty members and jaded travelers are regularly bombarded by an onslaught of loyalty credit card offers and new loyalty spending promotions, creating a culture where travelers have grown accustomed to switching hotel brands. The state of the industry has left both customers and hotel executives alike increasingly questioning the current structure of such programs and asking how they might evolve.
But despite this range of challenges, a number of new loyalty strategies are emerging to help lead the programs into the 21st Century. A combination of new technology tools, new marketing strategies for better personalization and customization, and a renewed focus on program simplicity and flexibility, are all helping create a new playbook for a new type of loyalty program.
This report examines the current state of the industry, reviews key challenges facing hotel loyalty programs, and suggests a number of strategies savvy marketers are using to adapt their loyalty experience moving forward.
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