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Unique rewards crucial for millennial hotel guests

DUBAI, September 14, 2014

Two-thirds (66 per cent) of millennial high-frequency travellers rate “unique rewards” as an important factor when choosing a hotel loyalty programme, compared with just 43 per cent of their older counterparts, according to a new study.

“The Deloitte study, “Winning the Race for Guest Loyalty”, indicates that customers are waiting to see which programme will provide them with the greatest relevant rewards before they commit to a brand, but they will not wait for too long,” said Grant Salter, director, head of travel, hospitality and leisure (THL) advisory, at Deloitte Corporate Finance.

Millennials are the demographic cohort born between early 1980s to the early 2000s.

“The rapid growth in the number of hotels across the Middle East is providing travellers with more choice of brand than ever before as new and different brands emerge. Brand loyalty is becoming more challenging for hoteliers in this market and meeting the needs of the various travel groupings is becoming vital in winning the loyalty battle,” said Salter.

Three-quarters (75 per cent) of millennial respondents also indicated they would remain loyal to a hotel brand even if they lost all their points and status, compared with two-thirds (66 per cent) among other travellers.

Additionally, the types of programme benefits travellers expect are no longer solely points-focused. Overall, 68 per cent of frequent travellers indicate that they consider themselves loyal to the programme where they have accumulated the most points. However, millennials highly value “soft” benefits such as VIP treatments and exclusive experiences more than other groups. Two-thirds (66 per cent) of millennials indicate that unique experiences matter, compared with half (50 per cent) of frequent travellers in other age groups.

The study also revealed that the average millennial traveller checks 10 online sources before making a travel purchase, and trusts advice from strangers online more than their own friends and family. Roughly one-quarter (24 per cent) of millennials check social media or customer review sites before booking a hotel, whereas only 16 per cent check with family.

The study showed that mere enrolment in a loyalty programme does not alone lead to active loyalty. Seven in 10 (69 per cent) of frequent travellers belong to more than one hotel loyalty program, and on average, travellers are enrolled in nearly three loyalty programmes. As such, finding a traveller’s “tipping point” that converts episodic guests into dedicated loyalists — can transform the hotel loyalty programme from a cost centre to a revenue engine.

Turning casual visitors into active loyalists may be easier said than done, as travellers expect services, traditionally considered perks, to now be a standard part of the hotel experience. For example, the study revealed that for frequent traveling millennials, free Wi-Fi ranked with cleanliness and comfort as a top three hotel attribute — not a perk, but as an expected basic.

“Ultimately, there is a distinction between a customer who has enrolled in a loyalty programme and a customer who makes regular, truly loyal use of the brand because of it,” said Salter. - TradeArabia News Service




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