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A short article by Ganna Koval, Director of Loyalty Programs at NH Hotel Group

The travel industry has experienced unparalleled turbulence in the last three years, with the global pandemic and travel restrictions causing significant disruptions. And hospitality sector was among the hardest hit, with each successive wave of the pandemic heavily impacting direct demand. As a result, it has become increasingly clear that developing a loyal customer base is crucial for businesses to recover as loyalty program members have played a particularly important role, being among the first to return to hotels and showing their confidence in the brand and its standards even during uncertain times.
According to a recent report by IAG, loyalty programs are now at the forefront of consumers’ minds, with 92% of respondents utilizing them to obtain added value amidst the current economic challenges.
Thankfully, the pandemic is now behind us, but it has permanently altered the way we travel and consume, and certain trends that emerged during this time are expected to continue.

How Loyalty Programs Can Help Travelers Maximize Value

The pandemic has influenced a new trend in loyalty programs, as customers focus on saving money during financially challenging times. Back then, hotels extended the validity of rewards as customers were unable to travel extensively, turning loyalty points into tangible currency and providing a guarantee for future travel. As a result, travellers now take a more strategic approach, aiming to optimize the number of points they earn and cash them in for tangible rewards. This shift has made loyalty programs even more valuable to customers, providing a way to save money and earn rewards at the same time. Customers want to feel like their efforts in earning rewards are worth it and that they can easily redeem their rewards for something tangible and valuable, providing a convenient and easy-to-use redemption process to keep customers engaged and satisfied with the program.
During the redesign of our loyalty program at NH, we surveyed our members and found that 74% consider points to be a minimum expectation. Getting the basics right is crucial, and loyalty programs offering clear and reliable rewards system serve as a trustworthy partner for guests even when they are not travelling. Point-based programs increase the frequency of purchases accordingly to The Wise Marketer research, showing that 82% of members of these programs are more likely to purchase more often. Going even further, the more redemption options hotels provide – more destinations, more brands, more concepts, like staycation or offers for local communities – the more engaged members stay with the program.

Winning Guests’ Hearts: The Power of Emotional Connection

Recent KPMG research shows that 96% of millennials believe that companies should explore innovative methods to incentivize their customers. Connecting on an emotional level may be a good solution for that.
Over the last few years, there has been a noticeable shift in the way hotel guests seek out meaningful experiences and emotional connections with brands, both at home and away. They prioritize making a positive impact on local economies and show a growing interest in sustainable travel choices while steering clear of crowded tourist destinations.
As the travel industry strive to cater to the evolving preferences of their guests, creating opportunities for members to indulge in authentic and local experiences has become a top priority. As a result, hotels and resorts are really stepping up their game by adding unique and exciting experiences to their loyalty programs, making them even more enticing for guests. For example, members can indulge in exclusive experiences, like a private flamenco show in Madrid or a masterclass with a renowned hotel chef, which is only accessible to them. These types of unique offerings can truly make a difference. And all these experiences can be enjoyed even if you do not travel, which is something that the pandemic has also left us, to rediscover where we live.

Customer-Centric Approach and Multi-Channel Communication

By taking a holistic approach to customer data, hotels can prioritize the needs of their guests and develop new product concepts while creating meaningful interactions throughout every stage of the customer journey.
As remote work gains popularity, the boundaries between business and leisure travel are blurring. The trend of “bleisure” has given way to a new concept of “leisureness,” where people choose destinations based on their desire to work in scenic locations, enjoy good weather and explore new places. Hotels can cater to these working travellers by offering a range of amenities such as comfortable workspaces, free high-speed WiFi, and co-working spaces. By creating an environment that facilitates both work and relaxation, hotels can ensure that their guests have a productive and enjoyable stay, whether it is for a weekend or a longer period. Consequently, hotel stays become longer, and they need to adjust their proposition to this new trend.
Using customer data to their benefit is the key. According to the Accenture 2023 life trends report, as people gain more control over their data, businesses will have to work harder via loyalty programs and incentives to demonstrate to customers the value of sharing their data.
The use of multiple communication channels through omni-channeling, coupled with the willingness of organizations to invest in these platforms, can foster a strong bond with customers through the strength of loyalty programs. However, it is important to remember that the customer journey should guide the choice of the right communication channel. The key is to utilize efficient and advanced CRM technology that provides a 360-degree view of the customer. This ensures that communication is delivered at the right time and prevents customers from being bombarded with irrelevant marketing messages. After all, who wants to receive a promotional email when they are trying to resolve an issue or have already booked their trip?
Also, customers want options when it comes to communication, and they are not settling for impersonal interactions anymore. Take social media, for example, the power of direct feedback. By staying connected with our clients through, we can quickly respond to their needs, provide top-notch support, and improve their overall experience.
Overall, digitalization gains the podium for loyalty program as it enables seamless processes and boosts even more members´ engagement with hotel brands.

The Emergence of Collaborative Loyalty Programs

Today hotels are increasingly adopting loyalty models that offer their members greater choice, with more brands, destinations, and ways to earn and redeem rewards across participating businesses. We see much more emphasis on partnerships that brings together multiple brands, such as hotels, airlines, or mobility solutions. A good example would be NH Hotel Group’s joining Global Hotel Alliance in 2022, which allows the company to improve the value proposition of its loyalty program NH DISCOVERY and offer its members a broader range of options, with access to over 40 hotel brands worldwide.
No doubt that the travel paradigm has undergone significant changes in recent times, as consumer trends have evolved more rapidly than before. As a result, hotel chains continue adapting their approach to building relationships with customers, placing them at the forefront of all their activities in a deliberate and conscious manner. According to the IAG study, more than half of customers are discovering new ways to accumulate loyalty points, and 20% of guests will have a greater inclination towards brands that offer loyalty programs.
Especially it becomes evident that in today’s volatile business environment, marked by various macro factors that significantly impact business strategies, customer loyalty has emerged as a critical priority in hospitality companies´ agendas.
As a result, today hotel loyalty program should combine tangible rewards system with emotional element, be able to support customer needs in a multi-brand ecosystem and need to have transversal communication and customer view with 360 digital experiences by prioritizing speed to market and introducing innovative concepts and experiences.

Do not miss out and join us together with Ganna at our 13th Annual Enhancing Customer Loyalty & Retention Summit on 14th – 15th June 2023 in Barcelona

Ganna Koval is a Director of Loyalty Programs at NH Hotel Group. At this global position she took the instrumental role in the revamp and implementation of NH DISCOVERY loyalty program for 350+ hotels worldwide, including system integration, implementation of new program brand identity, set up of new procedures and membership services for over 10 million members. Ganna has 18+ years of experience leading marketing, loyalty and CRM projects in hospitality, retail and restaurant brands. Passionate about travel, discovering different cultures and learning new languages.

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