Qualitative Research: Loyalty Programs and their Effectiveness on the Hotel Guest

By Johnna Freud Qualitative Research Moderator, Saul Cohen & Associates | May 19, 2010

Program Attributes

It is impossible to determine what makes consumers more attracted to one hotel loyalty program rather than another unless you ask them. Through qualitative research, we have identified loyalty program attributes that consumers find appealing -- or not. They want the rewards to be attainable. Programs that offer too few points for members' purchases, require too many points for redemptions, or have too many rules and blackout dates frustrate consumers rather than build loyalty. Additionally, consumers are more attracted to programs that enable them to acquire points from purchases at partner companies or additional bonus points for specific purchases (i.e, purchases made in the hotel or resort's restaurants or shops qualifying for more points per dollar spent).

Consumers also want options for point redemption. For example, while some loyal guests might save their hotel reward points to use for future free accommodations, others may travel so frequently that they acquire more points than they could ever use only for free accommodations. For them, it is important that the program offer redemption alternatives, such as the ability to redeem points for merchandise or upgraded accommodations.

Additionally, consumers want rewards programs to be written in simple language without legal jargon, hidden restrictions or fees. They want assurances that any personal information they provide will be used only for the loyalty program.

Targeting Your Loyalty Program

A key element to a successful loyalty program is that it offers rewards that consumers want. On this topic, a frequent business traveler once told me, "If I am loyal to a particular hotel, then I want them to be loyal to me. I want them to make the reward benefits worth my while."

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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.