As the industry works to bounce back from the pandemic and the related downturn, hotel companies will be relying on the return of loyal customers to facilitate recovery.
As U.K.-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.
IHG has also launched social campaigns to engage customers. “When the time was right, we moved to create engaging, creative social campaigns on our brand channels to inspire future travel and provide at-home re-creations of what they may find at our hotels, such as recipes from some of our chefs,” shares Heather Balsley, SVP, Global Loyalty and Partnerships, IHG. “We’ve also seen positive user engagement in our online challenges, such as the #TravelHomeChallenge ,where our social followers recreated their favourite travel memories at home.”
As Katie MacDonald-Serna, director, Loyalty & Customer Engagement, Choice Hotels Canada, notes, Choice Privileges has been highlighting additional ways its members can spend and earn points while travel is largely on hold. “The Choice Privileges program offers a variety of gift cards that members can purchase with points to use for essential items such as groceries, or to support local businesses through restaurant delivery and more. Members can also earn points through other mediums, such as car rentals, or through exchanging points from other rewards programs.”
An additional element of member engagement through the COVID-19 crisis has been community outreach, including points-donation initiatives, with companies such and Marriott, Wyndham and Hilton encouraging members to donate to relief efforts through their loyalty programs’ giving platforms.
Additionally, Choice Hotels International, Inc. has partnered with mattress brand Serta, Inc., to contribute to its “Stay Home, Send Beds” initiative, allowing Choice Privileges members to donate their points toward beds for hospitals in need.
As part of a relief package for frontline workers, Best Western Hotels & Resorts also created channels for its loyalty members to donate to crisis relief. Through the initiative, point donations from Best Western Rewards (BWR) members to the company’s charitable arm, Best Western for a Better World, or charitable partner, the Red Cross, have been directed to supporting COVID-19 relief efforts.
As part of the frontline-relief package launched in April, Best Western also introduced a custom loyalty offering for essential workers, offering BWR Elite status upgrade to those working on the front lines. In a similar initiative, Wyndham Rewards is gifting Gold membership status to essential workers, which is valid through December 31, 2021.
Looking to the Future
In the current environment, loyalty strategies — like most aspects of the travel industry — are currently a moving target. Communicating commitments to health and safety (and associated on-property changes) to members has also been a key focus as many jurisdictions move to tentatively re-open economies.
“As we have seen with all major global events in the past, there will be an evolution in consumer behaviour. And the industry will adjust — as it always does — to meet new guest needs,” says Balsley. “This includes consumer confidence around cleanliness processes and flexible travel policies, building on the extensive work we have already done in these areas.”
“For the many Choice-branded hotels currently open in Canada, we’ve enhanced cleaning best practices and new guest-interaction protocols to ensure the health and safety of our guests, franchisees and their staff,” MacDonald- Serna agrees. “As the situation evolves, we’ll continue to evaluate opportunities around our loyalty program, rewards and status levels and will keep our members updated on all loyalty program changes through email and on our website,” she adds.
