A lot of attention in the loyalty space in the past year has focused on integration: Marriott International integrated the Starwood program (triggering some complaints about status changes and difficulties in redeeming points) and introduced Bonvoy; this year, Accor rebranded and relaunched Le Club into the ALL “lifestyle” loyalty program encompassing hotel and non-hotel brands.
Both — along with many other hotel programs — are flogging experiences as ways to spend those points, whether you’re an elite or occasional guest.
“I travel 120 days average a year and I really don’t care about the experience,” confesses Paris-based travel marketing consultant Simone Puorto. Points, he argues, will always matter, but customers are increasingly looking to spend the points they earn on hotel brands elsewhere. Is loyalty still a thing? Maybe not so much.
HOTELS: Hotel companies are really revving up their loyalty programs.
Simone Puorto: Everybody’s bringing bigger marketing companies to create a perfect loyalty program, but when I look at the numbers, these new customers are not so loyal to the brands like we used to be or the generation before us used to be. These customers – first of all, they don’t want anything that is super-complicated and, of course, whenever it comes to merging, when it comes to integration, I can only understand the amount of crazy integration (hotel companies) are going through right now. But that is not an excuse. If you’re not ready, you’re not ready, and you don’t play with loyalty, especially in a historical moment where you have all this security breaches, issues that are surfacing every day.
So people are becoming less loyal to brands because, again, when it comes to a world that is overcomplicated, brands can help you out, because it can give you some kind of mental shortcut, if you will, and that means that you don’t have any level of complication – and a lot of this loyalty programs do.
Second, you need to give this sense of community and security and that, I think, these programs are lacking right now.
H: What does that lack of specific brand loyalty mean?
SP: Customers, now more than ever, want to be free to use points on different platforms. So I redeem my Marriott points, I’m buying something on Amazon, for example, shopping with points. And that makes sense. Google is doing something very similar… The future will be more in integration with different industries, so it’s making sure that you can actually use your points, not only to just sleep more, (but) to buy a drink, or get chocolate, or other stuff that it would be used for, and not even for experience… Nobody thinks about the fact that, usually, it’s mainly business people that are loyal, and they’re loyal because sometimes they can go on vacation for free… You want to have this elite status, but, when it comes to repeating guests, they just want a bed and a decent Wi-Fi connection.
H: What about the average loyalty program member?
SP: You don’t have to reinvent the wheel. There are people that will come to your property once that will never come back, and that’s fine. And that, if you want these users to be loyal, just give them something they can do with these points, rather than, “you sleep here, and you have this other complicated system that you will have to be loyal for all your life – but at some point these points are expiring, so you need to speed up.” And it makes no sense.
H: How could members be using their points?
SP: They want to have the freedom to do whatever they want to do with their points, because they used to that. And, in the retail world, it’s already like this… To me, loyalty is all about freedom to do whatever you want with these points. If you give me that freedom, but I can redeem my points somewhere else, I will stick with your brand because you give me the opportunity to do whatever I want, so I have the illusion of freedom … that I can actually spend my points in whatever way I want.
H: Is that truer of younger members?
SP: The pattern is that they’re not loyal. That’s it. They don’t care if they sleep at the Marriott one day, they sleep in Airbnb the day after, and then they sleep in an apartment. The main point is always the same: to have the freedom to do different things with your points. Flexibility. So, if you want one final word on the subject is that loyalty programs, to be effective, we’ll not have to focus on experiences, we’ll have to focus on flexibility.
H: Any predictions about how loyalty programs will evolve?
SP: First of all they will probably devolve, so it means that they will get more leaner and more agile, they will get rid of all this complexity – sometimes you really need a degree in quantum physics to understand what to do with these points. And, so, it will be like removing all this fiction and all this complexity and, I think, in that case, we are moving to the right direction… But the real difference will be when these brands actually understand that they need to make sure that these points can be redeemed outside the hotel.
H: It sounds like you personally don’t have a lot of interest in trading points for experiences.
SP: I just want to sleep. I want a good night’s sleep.
H: You don’t want to do 8 a.m. yoga with a goat or anything?
SP: I just need a pretty good bed and that’s it. And decent Wi-Fi.
