UAE. Two-thirds (66 percent) of millennial high-frequency travellers rate “unique rewards” as an important factor when choosing a hotel loyalty program, compared with just 43 percent of their older counterparts, according to a new Deloitte study, “Winning the Race for Guest Loyalty”.
“Our study indicates that customers are waiting to see which program 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 Limited (regulated by the DIFC).
“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.”
“The race is on for brands to provide swift gratification, particularly for the savvy millennial travellers, who are quick to share their positive experiences or broadcast their discontent over their social networks, and who are acutely aware of the rewards that come to loyal customers. As such, the brand that locks in the customer’s loyalty first and wins that race — is the brand that wins that customer, and potentially their loyalty.”
Three-quarters (75 percent) of millennial respondents also indicate they would remain loyal to a hotel brand even if they lost all their points and status, compared with two-thirds (66 percent) among other travellers.
Additionally, the types of program benefits millennial travellers expect are no longer solely points-focused. Overall, 68 percent of frequent travellers indicate that they consider themselves loyal to the program 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 percent) of millennials indicate that unique experiences matter, compared with half (50 percent) 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 percent) of millennials check social media or customer review sites before booking a hotel, whereas only 16 percent check with family.
The ‘tipping point’ and the power of true loyalty
The study showed that mere enrolment in a loyalty program does not alone lead to active loyalty. Seven in 10 (69 percent) of frequent travellers belong to more than one hotel loyalty program, and on average, travellers are enrolled in nearly three (2.6) loyalty programs. As such, finding a traveller’s “tipping point” that converts episodic guests into dedicated loyalists — can transform the hotel loyalty program from a cost center to a revenue engine.
The study revealed that once customers establish allegiance to one brand loyalty program, they will go out of their way to patronize that brand, and millennials are most likely to do so. Millennials indicate they would pay $41 more per night and travel up to 15 minutes out of their way to stay with their preferred brand, compared with business travellers in other age groups, who are willing to pay an extra $29.
This behavior spills into leisure travel, where millennial travellers would pay up to $35 more per night to stay with their chosen brand, compared with $20 among non-millennials.
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 program and a customer who makes regular, truly loyal use of the brand because of it,” continued Salter. “In the mind of the traveller, particularly millennials, only one brand truly wins their long-term loyalty. To journey past a customer’s tipping point and turn them into loyal and enthusiastic brand devotees, companies must understand how travellers view and use rewards, and use that knowledge to craft a program that goes beyond the ordinary and the expected. The prize will be dedicated relationships that enhance long-term revenue.”
To view the whole report, go to: http://bit.ly/1qLdheb
About the Survey
The survey was commissioned by Deloitte and conducted online by an independent research organization over an eight-week period in early 2014. The survey polled 3,001 high-frequency U.S. travelers, defined as individuals who spent more than 25 nights in a hotel in 12 months prior to taking the survey.
About Deloitte:
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.
Deloitte’s professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte’s professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities.
About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with around 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).
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