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The Elusiveness of Modern Brand Loyalty (by Rachel Watts)

In today's hospitality industry, companies are doing more and more to attract new customers. Money is poured into increased services, adaptations with changing technologies, corporate social responsibility programs, and intensive advertising strategies. So why is the concept of brand loyalty still so difficult to come by? According to Profitroom’s 2016 Report on Hotel Sales & Marketing Trends, consumers visit up to eighteen different websites before selecting a room. This includes company's social media pages, advising sites like Yelp, as well as the numerous OTAs (online travel agents) that are available.

The heavy argument in favor of OTAs is their sometimes-substantially-lowered price points and the fact that their presence increases competition and drives overall market prices down. In my time working for an independent 180 room hotel, I grew to resent the existence of OTAs. The expectation of a hotel visit is to have a nearly flawless experience, but OTA benefits abruptly stop as soon as the transaction goes through. I have watched numerous guests stand outside of the lobby frantically booking a room through a third party site on their mobile device and then waltzing in and attempting to check in. However, it can sometimes take up to a couple of hours for these transactions to get fully processed through the OTA and then integrated into the hotel PMS. Additionally, a front desk clerk will assume that anyone booking through an OTA is a one-time guest, and will not go through any extra lengths to improve the guest's stay. An OTA reservation will often be placed in a room that has fewer amenities, is a farther walk, or has a worse view. This is not intended as a slight on the customer, it is just a good business practice to save the better rooms for patrons that are more likely to give a return on the investment. With that in mind, if all a customer chooses to value is the dollar amount of the room, then it is reasonable to see the draw of OTAs.

Many businesses have intensive brand loyalty programs that promote a mutually beneficial relationship between the businesses and their consumers. According to the Pareto Principle, 20% of invested input is responsible for 80% of the results obtained. Therefore, in the hotel industry, it can be argued that 80% of profits derive from 20% of guests. Hotels are increasingly developing ways to personalize service, rather than separating guests into generalized categories. Although it is often considered a necessary evil, it is important to note the importance of email lists. Profitroom found that clients open e-mails with offers adapted to their needs 6% more often than those who read emails with no customized offers.

Other promotions such as sweepstakes can improve the brand’s image and awareness, and thus is an effective manner. “Marriott Rewards, the company’s award-winning loyalty program, launches its “50 to 50” campaign that includes a sweepstakes which gives members in three countries a once-in-a-lifetime chance to take a group of 50 of their friends and family to attend the game and enjoy an exclusive VIP Super Bowl 50 weekend in the San Francisco Bay area” (Herrera-Davila). Following the sweepstakes, Marriott unveiled a short film where the winner, alongside an NFL player, was able to tell his family the exciting news, which now has over 2.3 million views on YouTube.



The industry has barely begun to scratch the surface of how personalized service can rebuild brand loyalty. An overwhelming majority of modern hotel guests not only appreciate but expect highly personalized service at any property. It is clear that this is an inevitable trend that will continue to grow within the market; the only question that remains is which brands will be able to execute it successfully.

What are some other strategies that hotels can implement in order to build brand loyalty? How can current rewards programs be improved or modified to make them more appealing to guests?

About the Author: 

Rachel Watts is a junior student at The Collins College of Hospitality Management who transferred from the College of Marin in the Bay Area. She has years of industry experience at an independent hotel, and numerous serving/bartending jobs. Rachel is the 2016-2017 President of Eta Sigma Delta Academic Honor Society and will also serve as a Collins College Ambassador. Rachel is currently a Premium Management Intern with Legends at Angel Stadium. After graduating in spring 2017, she is planning to pursue a career in sports and entertainment.

References:

Herrera-Davila, N. (2015, September 10). Marriott International Creates Two Epic Super Bowl 50 Fan Experiences. Retrieved from http://news.marriott.com/2015/09/marriott-international-creates-two-epic-super-bowl-50-fan-experiences.html
Hotel Sales & Marketing Trends 2016. (n.d.). Retrieved from http://www.profitroom.net/trends-2016 

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