Posted in Business on 3 August, 2016

Technology is proving to be something of a double edged sword for the big hotel chains. JLL explains…

On the one hand it’s helping them to engage with guests through easily scalable and cost-effective initiatives and drive loyalty in new ways. Apps and interfaces allow integration with other relevant products and service providers, and encourage customer engagement through multiple touchpoints.

On the other hand, rapidly evolving technology is fuelling fierce competition from online travel agencies.

Nevertheless, “employing tech is one of the best ways to drive loyalty for hotel chains,” says Dale Nix, Hospitality Consultant at Avenue9, part of JLL Group. Indeed, many of the big players, including Hilton, Hyatt, Marriott and Starwood (the latter two are expected to merge later this year), have recently revamped their loyalty programs, driven by digital opportunities, as well as a desire to encourage direct bookings.

Starwood Hotels and Resorts led the way with exclusive discounted rates and free wifi when booking direct. Marriott’s Rewards members now receive lower rates when booking direct, and also benefit from free wifi, mobile check-in, and an option to earn points or discounts when reserving their room on the chain’s website. Likewise, Hilton has recently introduced discounted rates and online check-in for HHonors members.

The battle for hearts and minds

Luring new members with discounted rates is one thing; engendering enduring loyalty is quite another. “The trouble with points schemes is that you end up commoditising your product,” says Nix. “There’s not much you can do to separate your own brand identity from any other. I see that happening now with hotels.”

For the hotels’ part, many are taking a multi-pronged approach to loyalty. “There’s no question that our focus and everyone’s focus seems to be to further enhance and develop the relationships that we have with our own customers,” says president and CEO of Hyatt Hotels, Mark Hoplamazian, in an April interview with Skift.

Hilton has approached the points vs loyalty dilemma by allowing members to redeem points on exclusive experiences under their @Play banner. Current opportunities include a sumo lesson and seats to view the grand tournament for visitors to Tokyo, and a private concert by indie band JR JR at the Hilton Toronto.

Branded experiences are also offered by the likes of Marriott (including Ritz-Carlton), who have just introduced more exclusive features for its members. Their “experiences marketplace”, a lot like Hilton’s @Play platform, lets members bid on intimate or immersive experiences like cooking classes and in-room music gigs. Also on the cards for Elite members is a dedicated concierge service that helps guests plan their travel. Additionally, Gold, Platinum and Elite members receive that most coveted of amenities: Guaranteed late checkout until 4pm.

In a related moves pillared by tech integration, Intercontinental, Starwood and Hilton have all partnered with Uber, variously amalgamating app functionality, encouraging cross sales, and points accumulation opportunities—all available exclusively to loyalty program members, of course.

Big data, big opportunities

To create a truly personalised guest experience, hotels need to collect as much information as possible about each individual. “One of the things that loyalty can do, and how technology helps, is that we’re able to gather the finer details about our guests,” says Nix. “If you encourage guests to use the loyalty program at every touchpoint, you start getting a really good picture of the buying habits of your customer, such as recency, frequency and value of the spend.”

At present, the biggest challenge is processing all the data and turning it into actionable steps. It may be a work in progress, but as emerging technology become mainstream, the opportunity to convert data into truly tangible value will be employed by savvy hotel brands, to everyone’s benefit, says Nix.

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