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Oracle Study Reveals Travelers’ Preferences and Perceptions of Hotel Loyalty Programs

Oracle Study Reveals Travelers’ Preferences and Perceptions of Hotel Loyalty Programs

When it comes to choosing where to travel and stay on their journey, many consumers are looking to social influencers for aspirational recommendations. That’s according to the findings of a recent global study by Oracle auditing consumer perceptions and hospitality brand realities of loyalty programs and influences. The study took into account the perspective of 13,000 consumers and 500 businesses across retail, hotels, and restaurants in nine countries: Australia, Brazil, China, France, Germany, India, Mexico, the United Kingdom, and the United States.

According to the report, 43 percent of consumers indicate that they are more likely to trust recommendations by YouTubers rather than branded advertising or communications, and 37 percent agree that hotels used and recommended by social influencers are more trustworthy than those recommended by celebrities. When it comes to hotel brands, 62 percent do not currently engage influencers and 71 percent do not engage brand ambassadors.

The study also found that consumers are selective when it comes to signing up for loyalty programs and look for real relevance. In fact, 30 percent rarely join loyalty programs, 46 percent only sign up to select relevant programs, and just 24 percent sign up to every loyalty program. More than half of hotel professionals surveyed believe their offers are mostly relevant while just 22 percent of guests believe those offers are mostly relevant and 39 percent feel those offers are rarely relevant.

“Oracle Hospitality envisions a future where loyal guests are rewarded for their behaviors as we evolve beyond a transaction-based redemption model,” Mike Webster, senior vice president and general manager of Oracle Hospitality, says. “Hotel brands and operators need to deliver unique and personalized connections that improve revenue capture and help engage guests in the discovery of new properties and travel destinations.”

 

Navigating the New Loyalty Paradigm

Although there is a clear disconnect between hotel brands and guests on the relevancy and efficacy of loyalty programs, properties should remain optimistic with younger demographics noting the highest propensity to join loyalty programs and say their loyalty is growing. About one in three adult travelers under the age of 35 say that they are more loyal to hotel brands than before. And while 40 percent of baby boomers—those over the age of 55—note that they will only sign up to select, relevant loyalty programs, 29 percent of millennials plan to sign up to every loyalty program.

 

The Rise of Social Advocacy

Social media and online review sites continue to have a growing influence on guest choice as travelers’ digital peers highlight unique and memorable experiences. More than half (57 percent) of guests are likely to research brands on social media before buying, according to the Oracle report and 56 percent are likely to share photos of hotel experiences on social media. About half (48 percent) are likely to feature the hotel on social media in exchange for a reward and 46 percent and likely to link social media activity to a rewards program with automatic rewards for posts.

 

Personalization: Connected and Immediate

For hotel guests, personalization is fundamentally about being recognized by hotel staff with relevant connections to amenities and experiences combined with convenience. Personalized offers that are based on stated preferences appealed to 69 percent of travelers surveyed, and 65 percent said personalized offers based on purchase history are appealing, too. A more personal service from staff appealed to 65 percent of travelers as well.

When it comes to immediate benefits versus accumulating points as part of a loyalty program, 78 percent of guests preferred immediate benefits. Three in four said that a single loyalty program that can be used at a range of brands is appealing. Nearly three in four said a loyalty program with frequent rewards that are not dependent on earning points is appealing.

 

The Role of Technology

Technology can provide more connected and convenient service for hotel guests and familiar tools can make their travel experiences easier and quicker. The vast majority (90 percent) of guests in the study liked the ability to accept or reject offers so that the hotel loyalty program can learn what products and offers are most interesting. A mobile app that supports check-in, checkout, and provides relevant and personalized information about the hotel appealed to 88 percent of those surveyed. And 87 percent of guests liked the idea of exploring hotel rooms through virtual reality before deciding on which hotel to stay in or which room to choose as part of the booking process.

Four Loyalty Archetypes to Anticipate

Oracle’s report uncovered and outlined four archetypes of guest behavior:

The Broadcaster—This guest type flits between brands but shouts about his or her experiences, good or bad. One in three of these guests will recommend to others hotels that they are most loyal to and 38 percent will rave about a great hotel experience online. Just 14 percent are driven to build a high status on social media and review sites, but 38 percent would submit a product review through YouTube in exchange for an offer or reward.

The Enthusiast—This guest is an engaged hotel brand follower who is loyal but not loud. Thirty-eight percent of these consumers are most loyal to brands of which they have a high opinion. More than half say exceptional service is most important and 65 percent say excellent facilities are. Nineteen percent will follow their favorite brands on social media but even more—41 percent—say it’s important that they can engage with new and exciting features in hotels that they are loyal to.

The Lazy Loyal—This guests is typically unengaged but tends to be loyal to hotels because it’s easy to be. A desirable location is important to 63 percent of these guests. One in three will typically stick to the brands they like rather than shop around, and one in six are unlikely to even read reviews before staying at a hotel. Eighty-six percent think it would be appealing for staff to have access to a mobile device or tablet so they can offer services from anywhere.

The Seeker—This guests likes to shop around for the best value and holds little affinity to brands. Sixty-six percent choose a hotel because of a competitive price or promotion and 59 percent would always shop around. Almost one in three noted that they rarely signed up to hotel loyalty programs, but 55 percent would exchange personal details in exchange for a personalized offer or promotion.

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