As the distribution landscape continues to evolve and more guests turn to online and mobile sources to research and book their stays, hotel companies need to devote more energy and dollars toward achieving long-term consumer loyalty, says Umar Riaz, the North American lead for Accenture’s Hospitality Industry.
This year, Accenture, a management, consulting, and technology firm, surveyed 12,867 customers in 32 different countries about the hotel and lodging industry. Research found that although consumer satisfaction with hotels ranks high (36 percent), guest loyalty for specific companies and brands remains low, with only 14 percent of respondents staying loyal to one company.
“Across all the industries—consumer electronic retailers, retail banking, wireless phone providers, gas and utility providers—the hotel and lodging industry has the highest satisfaction score. That’s a big testament to the product investments that companies in this sector have made over the years,” says Riaz. “Despite all that, only 20 percent of customers feel very loyal to their provider.”
Advancements in technology have made it easier for consumers to switch from brand to brand based on the best price. And price remains a key component in booking hotel stays, with 41 percent of consumers responding that deals are the top differentiator when choosing a hotel. Riaz explains that the multiple digital distribution platforms, including online travel agencies (OTAs), make consumer flip-flopping a common practice.
Riaz warns that hotel companies run the risk of ceding the digital landscape to third-party OTAs such as TripAdvisor, Expedia, and Priceline. “These third parties have become very powerful brands by themselves, so it’s hard to completely get mindshare away from them,” he says. “But the hotel and lodging companies have to find a way to get customers’ mindshare focused on their brands, their websites, and their mobile sites.”
To ramp up the number of brand-loyal guests, Riaz says hotel companies need to make a bigger impact online and take back control of their marketing and messages. To do this, hotels have to figure out how to create engaging, multichannel experiences that extend beyond a guest’s stay. Riaz cites examples of grocery stores tapping into foodie culture by promoting recipes, chef partnerships, and rich, multimedia content; or a sneaker company creating more brand awareness by touting wellness initiatives and a healthy lifestyle. “With the digital economy, you really have to give customers an experience that creates stickiness for your brand,” says Riaz. “It goes beyond just the product.”
A good starting point, says Riaz, is a hotel’s own website. Compared to some third-party booking sites, most hotel websites don’t use big data and guest information to their advantage. Instead of giving users a generic booking experience, hotels should focus on a personalized and tailored approach that takes a customer’s preferences, history, and tastes into account.
Riaz also explains that social media and the mobile channel will continue to be increasingly valuable tools for building brand loyalty and engaging with guests in the future. According to the Accenture study, 41 percent of consumers use their mobile devices to search for products and services, and 33 percent use these devices to make online purchases. Riaz says companies that make investments in mobile technology and allocate resources to enhancing social media engagement and marketing will ultimately get ahead.
“Promoting your brand online has become a very sophisticated science,” he says. “Some of it does require additional investment, but some of it is just a strategic priority that these companies need to set.”
As online bookings continue to dominate, hoteliers have to work harder to make themselves stand out in a crowded space. But Riaz says that half of the equation—high guest satisfaction—is already there. “One of the big drivers of loyalty is how satisfied people are with your product. In this industry we have that covered,” he says. “The key is to invest more—in strategic prioritization or in dollars—to raise the game in terms of driving customer loyalty beyond just points.”
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