What Hotels Can Do to Build Brand Loyalty with Millennials

By Lisa Ross President & Partner, rbb Communications | January 20, 2019

They're young, active, travel-savvy and eager to choose experiences over physical purchases, so it's easy to see why millennials are the group to nurture when it comes to hospitality. The challenge -- building brand loyalty with them is easier said than done. These travelers, many of whom had a front-row seat to the late 2000s financial crisis, are keenly aware of their own spending, making them a tough group to capture with old-school loyalty plays such as points programs. In fact, according to one study, 80 percent of millennial travelers said they would switch their brand allegiance just to save a few dollars.

So where does that leave brands? Building loyalty with this demographic will take more than a few generic offerings, meaning brands need to think big when it comes to strategy. Experiential offerings, social media engagement, corporate social responsibility and lifestyle-based partnerships should be at the heart of forward-thinking millennial loyalty initiatives. Here are a few ways hospitality brands should aim to earn – and keep – millennial attention.

Think Alternative

Though millennials are notoriously price-conscious, they're also open to benefits beyond the dollar. A 2018 study by Visa and Bond Brand Loyalty showed that the group places high importance on alternative benefits, such as quicker check-in and check-out for members or choice of room and/or floor. In fact, 46 percent of millennials are willing to pay more for enhanced loyalty benefits, the study found.

These include, for example, Amazon Prime – which offers free two-day shipping, streaming movies, special sales and other benefits – and Restoration Hardware's RH Members Program, which offers 25 percent savings on all purchases, as well as complimentary interior design consultations and concierge services. In addition to discounts and additional services, millennials are often willing to pay for convenience, such as Instacart's two-hour delivery from local stores.

As part of your loyalty programs, offer rewards for travelers who share their experiences. Non-hospitality brands have found that this generation responds to rewards offered for actions such as sharing posts on their social media, referring friends and responding to emails or surveys. In other words, millennials are looking for an equal partnership – be loyal to them and their needs and they'll be loyal to yours.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.