Hotel Groups Increase Flexibility to Guests Use of Loyalty Points

As hotels prepare and refine their loyalty program strategies for 2018 there are apparently three key hospitality trends that the collective industry needs to prioritize.

That is according to Barry Kirk, vp of loyalty at Maritz Motivation Solutions, which creates loyalty programs for U.S. and global companies. The first of these trends concerns liquid currency, which refers to the ability to spend points in a retail setting, as if it was actual money.

“It’s a growing loyalty trend that could help hotel brands significantly increase on-property spend outside of the portfolio,” Kirk said. “Some hotel brands may see value in having their points be totally liquid and spendable at any point of sale. This is the approach La Quinta has taken, but I suspect most companies will see value in a less liquid approach by enabling points to be spent only within the brand experience. This could include guests using points at an on-property restaurant, spa or gift shop.”

With consumers demanding more flexibility and less friction in their program experiences, a hotel’s point currency needs to be flexible enough to offer value that represents the member’s current life stage and needs. After all, not everyone wants an extra night’s stay in exchange for their loyalty, or they may have other high priority near-term needs that aren’t travel related.

“So, by enabling points to be used whenever, wherever, and for whatever, you are meeting the consumer where they are and that will have a lasting impact on loyalty,” Kirk said. “A caveat to this is that when a customer redeems points for a room night, you can see a clear path to that experience reinforcing brand loyalty. But, the more liquid your currency, the harder it will be to see that connection. If I spend my hotel points on gas or groceries, the positive impact on brand loyalty might be significantly reduced.”

A second trend is a rise in coalition programs, which represent the dominant form for loyalty strategies outside the U.S.

“These programs work by allowing consumers to earn and redeem points freely across a network of brands [the coalition],” Kirk said. “Over the last few years, American Express has attempted the first large-scale U.S. coalition program, Plenti, but it has seen little to no success. However, the apparent failure of large-scale coalition loyalty in the U.S. is a positive development for the hotel industry as it removes the temptation to join a coalition where their brand equity is likely to be diluted.”

Read rest of the article at Hotel Interactive