Hoteliers are faced with increasing challenges and opportunities. The key to success lies in smart use of segmentation and personalization to provide great experiences.
More than half of Americans – 55% – took to the skies for business or leisure in the last two years, according to the 2016 “The Future of Travel” research by LoyaltyOne. Add to that the millions more who ventured out by train and automobile and one thing is crystal clear: Americans love to travel and have no plans to stop; year-over-year travel rose 5.5% last year.
What’s less clear, however, is who these tens of millions of travelers really are and what they want. They’re all explorers, but the reality is they’re individuals, comprising a wide range of ages, income levels, business and personal needs and preferences.
How do travel industry leaders, and hospitality providers in particular, better understand their needs, preferences and rising expectations and leverage that understanding to create better experiences – particularly in a world where technology chips away at face-to-face relationships?
Technology’s pain – and promise
Some technologies – smartphones, mobile apps, kiosks and robots – will continue to distance travel and hospitality providers from their guests. Other innovations are creating enormous opportunities to fulfill customers’ unmet needs, help them make decisions and remove friction from their experiences. This can build closer relationships while driving additional revenue and engagement.
The trick lies in segmentation and personalization – understanding data, examining customer experiences and leveraging new technologies to flexibly adapt to guests’ unique and ever-changing needs and situations. Personalization is particularly important in building stronger connections with business travelers – road warriors who value a higher, more tailored, on-property and time-sensitive level of service. In fact, 81% of business guests say service has an impact on how they evaluate a travel or hospitality loyalty program
The quest for personalization also exposes preconceived notions that can have an impact on how well experiences are delivered. As an example: Guests are often pigeonholed as either leisure or business travelers. In reality, many are both – earning loyalty points as business travelers with one set of service expectations, and redeeming points as leisure travelers with their families, necessitating a completely different set of services, amenities and expectations. Leveraging technology to adapt can make a big difference for hospitality providers.
What’s more, understanding a guest’s changing needs isn’t simply a leisure-versus-business-traveler binary. Often, it’s far more complex. COLLOQUY’s study found a full 76% of business guests would extend their trips for a little leisure time if hotels offered discounts for additional nights or the chance to have a friend or family member join them at a discounted rate.
With the right data, hotels should be able to create more agile rewards programs that predict when business or leisure guests might be more inclined to book into a network’s budget, boutique, mid-range, luxury or resort and spa brands.
A question asked often: How far can personalization go? Ultimately, it’s about leveraging technology to let guests customize as they see fit. Hilton Worldwide’s Conrad Concierge program is a prime example. Launched in 2012, it was the first hospitality software application that enabled guests to customize their experiences through tablets or smartphones – selecting rooms from a digital floor plan, purchasing upgrades and requesting delivery of amenities to their rooms before their arrivals.
Hyatt introduced “Hyatt Has It” in 2013 after an 18-month analysis of female travelers, including 40 facilitated group discussions around the world. Hyatt said listening to guests and digging deeper has led to more meaningful findings.
With conveniences targeted at businesswomen – offering essentials such as phone chargers, curling irons, steamers, yoga mats, makeup remover wipes and razors to keep, borrow or buy – the initiative creates an easy way to obtain items forgotten at home and limits the need to overpack.
Talkin’ ’bout my generation
One of the most talked-about customer segment differentiators is generational, a facet of personalization that dovetails nicely into travel and hospitality. Born in the last two decades of the 20th century, America’s 75 million millennials are adults now – tech-savvy, incredibly connected via social media and with broad spending power. In fact, the United Nations estimates millennials generate more than $180 billion in annual tourism revenue, a jump of 30% over the last decade. Research suggests millennials are leading the charge in the pursuit of experiences over things – and disruptors like Airbnb are paying attention, as evidenced by the homestay network’s new local experiences offerings.
According to LoyaltyOne’s 2016 “The Future of Travel” research, millennials are more likely to pay more for luxury car rentals, special dining and events, presenting hospitality leaders with interesting coalition opportunities to explore.
Other groundbreakers, like the Global Hotel Alliance, are recognizing unique expectations of customer segments and providing authentic and unusual local experiences. Global Hotel Alliance’s Discovery program promotes experiences to members through frequent targeted emails that offer hyper-local rewards – like a day with a fisherman off the coast of Portugal followed by a meal of the day’s catch.
Chicago’s boutique ACME Hotel is a great example of targeting millennials, focusing on trendy art, high-tech services, craft cocktails in the hotel bar and an in-house bakery – all while sporting a low impact on the wallet. Other services created with millennials in mind: morning coffee delivery; “knock and drop” room service so guests don’t have to interact directly with room service hosts; hangover cure packages at the front desk; and free Fitbit rentals.
While millennials get a lot of attention, no one should forget that 75 million baby boomers and 66 million Generation Xers remain major players in travel and hospitality. And the young Generation Z members should not be discounted as they get older and come to market with a new set of expectations.
The future, like the past, is about relationships
With technology being intelligently exploited to create omnipresent and fluid travel experiences, successful hotels of the future must find smarter ways to interact with guests, build emotional connections and respond quickly when technology begins to commoditize or circumvent these relationship- building efforts.
The key to keeping relationships and bottom lines healthy, as Warby Parker co-CEO Neil Blumenthal said recently, is to “eliminate low-value interactions and amplify high-value interactions.” Fortunately, technology is helping leaders in hospitality do exactly that — efficiently dealing with low-value interactions, like check-ins and checkouts – while devoting more time to high-value human interactions, such as custom room accessories or specialized maid service.
The great news: Even with the accelerated pace of technological change and rising traveler expectations, leaders in the travel industry who invest in personalized rewards, thoughtful and next-level technology and unique customer experiences will be well-positioned to drive long-term loyalty and profitability.
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