New Ways of Thinking About Loyalty Today for Independent Hotel Brands

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As business travel continues to lag as the leisure market rebounds, hospitality loyalty programs have shifted the focus from business travelers to leisure customers seeking more flexibility on how they earn and spend rewards.

“Across industries, loyalty programs used to be very transactional,” said Kristi Gole, vice president, product manager at Global Hotel Alliance (GHA), the world’s largest association of independent hotel brands. “Hotel loyalty programs focused on business travelers because they traveled more frequently, but these programs have expanded in recent years to capture more of the guest experience, with an emphasis on the image of brand and engagement.”

While major hotel chains have refocused their loyalty programs on lifestyle rewards, providing guests with redemption opportunities outside of the core hotel product through ancillary spending or partnerships, many independent hotels have had struggled to compete or underestimated the value of a strong loyalty program.

“GHA is on a mission to help independent hotel brands compete globally,” Gole said. “It starts with educating independent hoteliers on how a loyalty solution gives them access, reach and profitable additional revenue.”

Reassess the value of loyalty

According to Gole, the value of a loyalty program is widely recognized in three key areas: data, marketing and profitability.

“Loyalty programs collect and store first-party data, which is a critical asset for all teams, especially with the shift to a cookie-free future,” Gole said. “Guest profiles are more complete and data is better because members are encouraged to keep their contact information up-to-date. They want to be recognized when they check in, receive credit for their stays, and notifications about their rewards. “

For hotel marketing teams, loyalty becomes the centerpiece of an effective customer relationship management (CRM) system. Loyalty programs engage customers with frequent communications and relevant content, as they are permission-based and provide ongoing messaging – account summaries, status tracking, updates showing rewards earned or expiring, new options of exchange and other personalized messages.

“It’s also a closed user group, helping with price parity contracts with online travel agencies (OTAs),” Gole added.

According to Skift Research, loyal members are also more profitable than non-members, contributing 30-60% of room nights. “Compared to non-members, the average daily rate for loyal members is often 10 to 15 percent higher, even with discounted member rates,” Gole said. “Loyalty programs give new and repeat guests a reason to book directly, with tier qualification and earned-and-burn rewards largely limited to direct channels such as the hotel’s website and app. , eliminating third-party fees such as OTAs.”

A loyalty solution for independent hotel brands

Independent hotel groups pride themselves on their individuality, and guests often like and seek them out, but these groups don’t have the reach or the resources to compete with the big chains.

“These largely private companies are often unable to invest millions, both initially and ongoing, in loyalty technology and program management, as well as global CRM and marketing efforts” , Gole said. “GHA allows them to tap into a central loyalty platform while retaining their individuality and personality.”

To this end, GHA brings together 40 independent hotel brands and more than 800 hotels under the banner of a global loyalty program, GHA discoverylaunched in 2010 as the first loyalty program dedicated to experiential travel.

“As we set out to refresh and transform our offering over the past few years, we did extensive quantitative and qualitative research to understand what customers really want,” Gole said. “And we’ve found that they want immediate, seemingly tangible rewards and flexibility in where that spend goes. So we’ve created a digital rewards currency. It’s better than points because it’s more simpler and more flexible.

How GHA Discovery Works

GHA Discovery provides a consistent membership number, tier structure and rewards currency that members can earn and use across properties. Members can use Discovery Dollars (D$) not only to purchase room nights, but also for hotel-wide spending.

“It’s about helping the members enjoy the moment,” Gole said. “They can use Discovery Dollars to upgrade to an opulent room, treat themselves to a nice bottle of wine at dinner, get a massage at the spa, explore a new destination with a curated experience, or save for something big, like a getaway. dream. What members choose to redeem is entirely up to them.

Members can earn 4-7% each time they stay in the GHA hotel network, and they can apply their Discovery Dollars as a form of payment at checkout, one Discovery Dollar equals one US dollar.

“Our new rewards currency is generous and transparent,” Gole said. “Unlike points programs which can be complex and difficult to redeem, Discovery Dollars make it easy to understand the value of the rewards. The program is also fair and inclusive as it does not only reward elite members. All members can earn Discovery Dollars from day one on hotel spending and track their balance on our GHA Discovery mobile app.

In addition to revamping its loyalty program with a rewards currency, GHA has expanded its membership tiers to provide members with additional ways to progress to elite status. Members can easily move between levels and share their status with friends or family members. This more flexible tier structure promotes multi-brand stays by rewarding members who explore the GHA portfolio, bringing new guests to lesser-known brands and hotels at a very low distribution cost.

“We used to only track nights spent, but now members can upgrade based on nights spent, amount spent, or by staying at different brands,” Gole said. “The latter has attracted a lot of attention due to its generosity – if a member simply stays in three different GHA brands (Kempinski, NH and Pan Pacific, for example) in one year, they will achieve Titanium status, which is usually 30 nights spent or $15,000 spent.

Beyond rewards, other key pillars of GHA Discovery include guest recognition and Live Local, an engagement strategy for locals who live near GHA hotels.

“For recognition, we’ve learned through our research that room upgrades are what matter most, so we’ve worked with our brands to adjust some of the lower-valued perks as a trade-off to take additional steps to better provide upgrades and focus more on quality. We also kept key hotel benefits like early check-in and late check-out. said Gole. “For our Live Local concept, we have created benefits for members living around our hotels. Even without a stay, they can earn perks like spa and dining deals and free access to our pools and beach clubs.

A promising path

Gole said the initial response to the 2021 relaunch of GHA Discovery has been overwhelmingly positive, both from alliance hotels and their guests.

“From a hotel perspective, staff are thrilled to have this new rewards offering and have re-engaged, enrolling more guests and pushing Discovery Dollars redemption,” Gole said. “From a customer perspective, we’ve heard great feedback from savvy travelers who have found it’s easier to level up and maintain status, and the new rewards currency is much more generous. Looking at the numbers, the relaunched program has doubled the rewards redemption rate and is driving desired customer behaviors. Discovery Dollars users are 7.7 times more likely to stay cross-brand, with 60% of their stays being at a different brand than where they signed up; they stay twice as long and spend on average 18 to 20 times more in cash than the redemption amount. As for our brands, they are now seeing an average return on investment of 17 times the new program, or 21% more than before. »

GHA Discovery delivers value to independent hotel brands looking to reward loyal customers and win new customers at a low cost of acquisition, while increasing their return on investment, and to customers – travelers and locals – seeking a simple way to earn and spend experiential rewards.

“It’s a great way to excite them, engage them and motivate them to come back again and again.”

The next article in this series will explore how the Global Hotel Alliance’s shared technology platform is helping independent hotel brands save money, boost guest recognition and generate incremental revenue.

For more information on GHA membership, visit Global Hotel Alliance. To learn more about GHA’s relaunched loyalty program, visit GHA Discovery.

This content was created in collaboration with Global Hotel Alliance and Skift’s branded content studio, SkiftX.

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