As the industry works to bounce back from the pandemic and the related downturn, hotel companies will be relying on the return of loyal guests to facilitate recovery.
As UK based GlobalData has observed, the industry’s largest players have been using loyalty programs to create value for customers and increase demand during and after the crisis. “Instead of advertising future room rates at discounted prices, offering perks through loyalty schemes means hotels can protect their pricing and margin strategies,” says Ralph Hollister, Analyst, Travel & Tourism, GlobalData. “Providing added value instead of price reductions, such as offering reward extensions as Hilton has done or following IHG’s lead and lowering the entry requirements for its next loyalty tier, should lead to more customer loyalty.”
“Frequent travellers are the backbone of any major hotel company’s customer base, often making up the majority of customers qualifying for ‘elite’ membership schemes,” he adds. “Hotels will therefore be wishing for a swift return to normality in order to welcome back this loyal and profitable part of their customer base.”
As Hollister noted, many companies have implemented status and reward extensions for their loyalty members. Some have also reduced status criteria for the year. InterContinental Hotels Group (IHG) reduced Elite membership criteria for its IHG Rewards Club by 25 per cent for 2020 and Choice Hotels international, Inc. reduced the number of nights required to qualify for elite status in 2021.
Keeping Members Engaged
Major companies have also implemented initiatives to keep members engaged at home. In April, Accor Live Limitless (ALL) launched a new global digital-entertainment campaign aimed at letting guests and the broader public discover new experiences and live their passions while at home during the pandemic. The company’s #ALLatHome social-media campaign featured content themed around ALL’s three pillars — sport, food and entertainment. The campaign comprised exclusive content and live streams on Instagram and Facebook, including masterclass cooking tutorials.