With COVID-19 restrictions lifted, the travel and hospitality industry is experiencing a significant rebound in 2023. A study by The Mastercard Economics Institute reveals global leisure travel is up by 31% in March 2023 vs 2019. Travel & hospitality brands know cultivating and retaining customer loyalty is pivotal to business success in this highly competitive space.
This is an industry that thrives on delivering exceptional experiences. With an ever-increasing number of competitors entering the industry, customers have even more options available to choose from. Businesses must go the extra mile to earn trust and foster customer loyalty.
This blog aims to explore best practices and inspiring real-world case studies and arrive at common strategies to unlock customer loyalty in the travel & hospitality sector.
Significance of Customer Loyalty in Travel & Hospitality
– Repeat business
Loyal patrons are more inclined to come back. This behavior stems from prior positive experiences, and they may repeatedly choose the same hotel or hotel chain for their future accommodation needs.
– Increased Spending
Loyal customers spend on room upgrades, on-site dining, spa, and wellness facilities and contribute additional revenue.
– Brand Advocacy
Loyal customers often spread positive word of mouth and actively promote the hotel or chain on social media platforms, review websites, and travel forums. When customers write positive online reviews, they also help the business manage its online reputation, an essential metric for the Travel and Hospitality Industry. In doing so, loyal customers contribute to a brand’s organic marketing efforts and substantially enhance the business’s visibility.
Download for Free: The Customer Experience Guide for Travel & Hospitality Apps in 2022Top 5 Emerging Trends in Customer Loyalty that are Helping the Travel & Hospitality
1. Embracing the Power of Personalization
In today’s digital era, customers value personalized experiences. When we access platforms like Netflix, YouTube, or Amazon, personalized recommendations have become an expected norm, but is it also the norm in the Travel and Hospitality industry? Well, not really, and early adopters can cash in on this strategy.
By leveraging the insights from an SCV (a single customer view is a comprehensive profile of user data from all channels, including purchase history, product proliferation, website activity, social media, geolocation data, etc.), businesses can better understand their customer’s needs, improve marketing strategies, and make informed decisions.
Proper customer segmentation is crucial in running highly personalized campaigns. For example, airlines can provide tailored holiday recommendations based on travel history, while hotels can personalize room amenities, food recommendations, and add-on services.
Today businesses must also adopt marketing technology that allows real-time segmentation and offers automated personalized communications like in-app messages based on the customer segments. Brands can create customized upsell offerings, convert regular event-goers, and nurture visitors with relevant recommendations.
Timely engagement through on-site overlays and banners allows businesses to deliver the right message at the right time, influencing customer behavior and capturing interest. These practices contribute to building customer loyalty, increasing engagement, and improving the overall customer experience in the travel and hospitality industry.
Case Study: La Cantera Resort & Spa, Texas
This resort implemented a personalization strategy for customer segments – families, couples, and summer travelers. Their tactics included key guest persona research and demographic profiles, persona-based homepage personalizations, an interactive quiz to segment audiences and homepage personalizations.
The results were remarkable, as the hotel’s conversion rate for chosen segments increased within weeks, reaching an average of 3.9%, a 217% increase compared to the site’s average.
The summer travelers segment saw a remarkable conversion rate of over 6%. Visitors with personalized journeys spent 8% more on average than the control group, demonstrating the strategy’s effectiveness in boosting customer engagement and spending.
Download for Free: Travel & Hospitality Push Notification Templates that Actually Work!2. Driving Customer Retention Using Technology
India is moving towards modern loyalty, where mobile apps are particularly attractive. A study by Nielsen found that 2 out of 3 loyalty program members agree they’re more likely to participate in a loyalty program if a mobile app is available.
With the widespread adoption of smartphones and mobile applications, businesses can establish direct and personalized connections with their customers and boost engagement. Personalized offers, targeted notifications, and omnichannel earn-burn can entice customers to make repeat visits.
Additionally, utilizing technology-driven data analytics allows for valuable insights into customer behaviors, preferences, and purchasing patterns, facilitating the delivery of tailored journeys.
Moreover, brands can differentiate themselves in the competitive landscape by adopting a multi-channel strategy across various touch points like mobile apps, websites, social media, email, and physical stores.
Discover Customer Retention Hacks for Travel and Hospitality Apps!
Case Study: Heineken Biertegoed
The “Beer Credit Wallet Programme” by Heineken showcases an exemplary use of mobile technology, mobile wallets, and gamification to drive customer loyalty. This innovative loyalty program rewards customers who purchase Heineken cans or bottles in supermarkets with a free, freshly-drafted beer when they visit a bar. Call that Hospitality business!
By entering a code from the product packaging purchased from the supermarket into the mobile app, consumers earn Beer Credits, which can later be redeemed for a beer at participating bars, creating a semi-Omni-channel experience by engaging customers across distribution channels. The Beer Credit Wallet Programme has garnered significant success in the Netherlands, boasting over 100,000 downloads.
Enrollment in the program is unpaid, and customers earn Beer Credits as rewards. The program’s success earned it an award for “Best Use of Mobile within the Loyalty Strategy, including Mobile Wallets.” Notably, around one-third of Biertegoed users reported an improved attitude towards Heineken due to their experience with the loyalty program.
Curious about how How Can Gamification Help Travel-hospitality Grow Economies?
3. Leveraging Loyalty Programs and Rewards
A loyalty program is a marketing strategy to encourage and reward customer loyalty and repeat business. These programs offer members various benefits, rewards, and special perks based on their engagement and spending level.
Loyalty programs can come in different forms, like point-based systems, membership tiers, cashback programs, exclusive event access, personalized offers, or partnerships with other businesses for more rewards. The structure and benefits of a loyalty program depend on the type of business, its target customers, and its goals.
They serve as effective tools for incentivizing repeat business, driving user engagement, and capitalizing on consumer psychology. By offering exclusive benefits and incentives, businesses can motivate customers to choose their brand over competitors. Loyalty programs can be structured in various ways, such as point systems, tiered memberships, or personalized rewards.
To create a differentiated loyalty offering in the travel industry, travel brands should have clear answers to key questions about their financial, customer, and brand objectives.
What do I want to accomplish with my loyalty program? Which customer segments will I prioritize? Which purchasing behaviors will it influence, and how? How will the loyalty program contribute to the overall business strategy? Do I want to create a coalition and partnership-based program?
Case Study: Marriott Bonvoy
Marriott Bonvoy, the loyalty program by Marriott International, presents an excellent example of a successful multi-tiered rewards program. The program earned the #1 rank for the Best Hotel Rewards Program by U.S. News, with over 120 million program members in 2023. This program offers six membership tiers, from Member to Ambassador Elite, providing increasingly valuable benefits as members move up.
Image Source: Marriot
Members can earn points for their stays and dining across all of their hotels or shopping with a Marriott Bonvoy credit card and redeem these points for free nights, room upgrades, and other exclusive benefits. For example, the top tier members can enjoy more than 100 nights per year. Members can also exchange points for car rentals, flights, gift cards, and free nights or donate them to support disaster relief efforts.
The program’s user-friendly rewards portal provides clear information, labeled sections, and appealing visuals, ensuring a pleasant browsing experience for new and existing members. By providing a range of rewards and partnering with various brands, Marriott Bonvoy ensures customers are enticed to choose their hotels and remain loyal to the brand. This not only drives customer loyalty but also maintains user engagement by offering tangible rewards for their loyalty.
4. Creating Emotional Connections via Feedback
Travel experiences often evoke profound emotions, and businesses that tap into these emotions can foster strong customer bonds. By creating memorable and emotional experiences, companies can nurture customer loyalty beyond the immediate trip. This emotional connection leads to repeat business and positive word-of-mouth recommendations.
A simple way to enhance emotional connection is to take customers’ feedback and act upon it. By regularly gathering customer feedback, businesses can identify areas that need improvement and gain valuable insights into customer preferences.
Also, read What are in-app surveys, and why are they a reliable source for getting feedback?
By actively implementing these changes based on customer feedback, businesses can demonstrate their commitment to customer satisfaction and continuously adapt their offerings to align with customer needs, ultimately leading to enhanced customer loyalty and satisfaction.
Case Study: Airbnb
Airbnb is widely acclaimed for its focus on creating unique and authentic travel experiences. Through gamification elements such as reviews, ratings, and badges, Airbnb encourages user engagement and fosters a sense of friendly competition among hosts.
This motivates hosts to provide exceptional experiences and allows guests to feel a sense of accomplishment and reward when leaving positive reviews. Airbnb has built a loyal customer base that actively participates in the community, shares experiences through feedback and ultimately drives customer loyalty.
5. Delivering Exceptional Customer Service
Providing exceptional customer service is a fundamental pillar for fostering customer loyalty in any industry, including travel and hospitality. Travelers appreciate attentive and responsive service, especially when facing challenges. By going above and beyond to resolve issues and ensure a seamless experience, businesses can leave a lasting positive impression on customers, driving user onboarding, engagement, and loyalty.
Case Study: Southwest Airlines
Southwest Airlines serves over 11 million passengers a month and is renowned for its outstanding customer service. From their friendly and helpful flight attendants to their flexible ticket policies, Southwest consistently prioritizes customer satisfaction. Southwest has built an impeccable reputation by putting customers first and by making sure their employees are content and financially secure.
This commitment has garnered the airline industry’s highest score in the Temkin Experience Ratings, consistently outperforming competitors since 2011. With a focus on functionality, accessibility, and emotion, Southwest Airlines has achieved an impressive 76% score, surpassing the industry average by 10 percentage points.
By ensuring a positive experience from booking to landing, Southwest has cultivated a loyal following of customers who appreciate their commitment to exceptional service. This commitment not only drives customer loyalty but also enhances user engagement by fostering a positive brand perception.
Pro-Tip: Businesses should invest in Upskilling and Empowering Internal Teams
This is crucial for travel and hospitality businesses to effectively leverage data and technology. Teams that effectively collect, analyze, and interpret customer data can uncover valuable insights.
Upskilling fosters innovation and adaptability, empowering teams to identify trends, leverage new technologies, meet evolving customer expectations, and define data-driven loyalty strategies.
By investing in upskilling, businesses equip their teams with the necessary skills to maximize data and technology, leading to informed decision-making, ultimately driving customer loyalty, and achieving long-term success.
Conclusion
Cultivating customer loyalty stands as a vital objective for businesses in the travel & hospitality industry. By implementing effective strategies and drawing inspiration from successful cases, companies can unlock the potential of customer loyalty.
From personalized experiences and emotional connections to loyalty programs, gamification, and an understanding of consumer psychology, success lies in comprehending and catering to customer needs and desires.
By prioritizing customer loyalty, travel & hospitality businesses can thrive in a competitive landscape and succeed in this dynamic industry.
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About The Author
Bhavya Garg
Bhavya helps businesses build and implement marketing strategies for customer acquisition and retention. She has 12+ years of experience building loyalty, CRM, and MarTech strategies. She has assisted businesses in launching and optimizing loyalty programs using cloud-based CRM SaaS Technologies. She has consulted iconic brands such as PVR, Lifestyle, Mahindra and Mahindra, The Body Shop in India, Standard Chartered Bank in Singapore, Carter in Dubai, and more.
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