Higher-Demand Weekends Produce More Loyalty Point Redemption for Hotels – CoStar
Hotel Brands Drive Loyalty Among Less-Frequent Travelers
The focus of hotel brand loyalty programs is shifting to the recruitment of less-frequent travelers and younger generations through strategies that include reducing the number of overnight stays required in a year to reach the first status level.
A rise in loyalty point redemption is sparking hotel brand companies to leverage strategies that drive greater brand loyalty among untapped traveler segments.
One such segment is the less-frequent traveler, said Gilbert Arredondo, senior vice president of revenue strategy at third-party management company Remington Hotels.
He said the road warrior or power traveler, who books 50 or more overnight hotel stays per year, is already especially brand-loyal, but there’s untapped potential to capture those who travel and book less frequently.
Remington manages hotels affiliated with Marriott International, Hilton, Hyatt Hotels Corp., IHG Hotels & Resorts, and Wyndham Hotels & Resorts brands.
“You’ve always had the power traveler who’s going to stay 50-, 60-plus nights a year in a hotel room. Those aren’t going away. I think [brands are thinking] how can we tap into the person who travels once a month, couple times a quarter, who probably generates 20-30 room nights a year but doesn’t qualify for anything but they’re still valuable,” he said. “If we can tap into those and make those folks a little bit loyal, maybe they then move up to the next [status] or if not, is there something we can do to make sure they’re always loyal to us?”
Arredondo said there was an uptick during the pandemic of travelers booking a couple of overnight leisure stays a few times a year. He’s noticed that many hotel brand loyalty programs have reduced the number of nights needed to obtain status.
Marriott, for example, requires 10 overnight stays in a calendar year to reach Marriott Bonvoy Silver Elite status. IHG significantly dropped its threshold to reach its first two status levels, Arredondo said.
“If you think about that, that’s three or four trips a year for a few nights, you become silver. It doesn’t per se get you a lot; it gets you a couple of perks but, hey, you hit the first threshold,” he said. “I think people like that.”
Nearly all brands have also rolled out the ability to combine cash and loyalty points. Arredondo expects that trend to continue as many travelers accrued points during the pandemic but might not yet have enough to redeem for a reward.
“If you have saved up 20,000 points over the course of a couple years through your travels with Marriott hotels, and you want to go to New York City and stay a couple nights [but] you don’t have enough points, you can technically take your 20,000, give it to Marriott and they’ll tell you the difference for the stay and cash,” he said. “I think you’ll see more and more of that. IHG was kind of the pioneer on that, and Hilton and Marriott have really pushed that.”
Michael Herr, regional revenue manager at third-party management company McKibbon Hospitality, said the brands continue to evolve their loyalty programs from an engagement standpoint. Brands are looking to be more tech-savvy and offer new features on their mobile apps, he said.
McKibbon Hospitality manages hotels under brands including Hilton, Kimpton, Hyatt, Marriott and Sonesta.
Guests “now have the availability to choose the room that you want, the floor that you stay on and to get a key pushed to your phone all before you step foot into the property,” Herr said. “Not that we want to limit that guest interaction, but the engagement is still taking place in providing them the option through their loyalty programs to have this benefit. I think [this] is where the brands are taking it from the traveler’s preferences.”
Andrew Jordan, chief marketing officer at global third-party management company Aimbridge, said in an email interview that hotel brands, like many other companies, are looking for ways to appeal to customers and strengthen brand loyalty as demographics shift.
“As we work with all the brands, we see frequent guest programs evolving to resonate with post-pandemic travelers and as consumer preferences change. The biggest shift post-pandemic may be the work environment — remote and flexible — which has implications for how to optimize hotel stays. And bleisure is here to stay,” he said.
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