How the Road Warrior Chooses a Hotel: Price, UGC and Loyalty
By Kelly McGuire Vice President, Advanced Analytics, Wyndham Destination Network | May 29, 2016
Co-authored by Breffni Noone, Associate Professor at the Pennsylvania State University School
Consumers have more information than ever before when they are making a hotel room purchase. In addition to traditional information like price and brand, they now have access to new information like reviews, ratings and TripAdvisor Rank. The question is: how do consumers use all this information, with price, to establish value and ultimately make a purchase decision? Understanding this, particularly across different segments of guests, will help hotels make better pricing and positioning decisions.
We wrote about our study results, that compared and contrasted business and leisure traveler's decision making processes, in this publication previously. In this article, we describe a new look at business traveler behavior. The road warrior, or frequent business traveler, represents a large and very valuable segment for hotels, most particularly, the unmanaged business traveler, those that are not overly governed by a corporate travel policy. As we starting thinking about this growing segment, we realized that this group is potentially highly influenced by their loyalty affiliation. Loyalty programs reward frequent travel with free nights, which can be a very attractive benefit. Would this desire to collect points for free stays impact the business travelers' decision making process?
Frequent travelers, given all the time they spend away from home, might also gravitate to a brand that they feel comfortable with, and know will take care of them while they are on the road. In fact, the impact of this feeling of loyalty to a particular brand is well researched.
Research shows that the more loyal a consumer feels towards their preferred brand, the more they display the outcome behaviors hotels love, like likelihood to recommend, likelihood to return, and increased share of wallet. We wondered if these feelings of loyalty might also cause them to react differently during the decision making process, impacting their reaction to the price and non-price information they have access to while making a booking.