NATIONAL REPORT—As Millennials increasingly impact market trends across industries, PwC U.S. has released a new report as a part of its ongoing Consumer Intelligence Series titled, “What’s driving customer loyalty for today’s hotel brands?”
This report, which reveals findings from a survey of more than 1,000 business and leisure travelers, examines if Millennials’ preferences regarding hotel loyalty programs differ from other demographics, and what significance these shifting consumer preferences will have on the future of the travel and leisure industry.
The survey found that Millennial leisure travelers had the fewest hotel loyalty program memberships, with an average of 2.3. While Millennials have had less time to accrue loyalty memberships, this demographic is also the most likely to take part in sharing economy vs. traditional hotels.
While all demographics said they would most prefer to spend their points on extra hotel nights, 36% of Millennial travelers chose room upgrades as their second preferred reward—underscoring their preference for experiences—compared with only 16% of other travelers.
However, the differences in loyalty preferences uncovered in the survey were not significant enough to suggest a vast difference between millennials and 30+ travelers. According to the report, the tendency to over-index for millennials might well ignore a larger macro trend that spans Millennials and beyond.
As leisure summer travel season begins, guest experiences and engagement through experiential offerings will continue to be an important factor in driving guest loyalty and brand commitment. According to PwC U.S., hotel companies should continually assess their overall loyalty programs as well as their ability to create special moments that drive loyalty.
For hotel brands looking to adjust their loyalty programs, understanding the many different motivations and preferences for the Millennial guest can be difficult and time-consuming and could lead to reduced engagement, according to Adam Kennedy, advisory hospitality & leisure leader, PwC, U.S.
“The brand that figures out how to profitably walk away from traditional tiers and reimagine how loyalty is measured stands to appeal to the millennial base and even more broadly to today’s consumer,” said Kennedy. “One way that brands outside of the hotel industry have pursued this concept is through gamification. Gamification is a direct response to keeping consumers engaged with brands outside of the typical buying journey. If we apply the concept to hotel loyalty programs and find a way to keep guests actively invested, then the industry may be better positioned to feed the immediate gratification that millennials respond to, while also providing a unique experience.”
Another way brands can best cater to the Millennial preference is providing experiences that truly showcase how the brand knows the individual, suggested Kennedy. “Personalization done well and innovatively requires a firm grasp on customer data, which can oftentimes be housed in disparate systems internally or may be difficult to mine on external sources,” he said. “Combining these data sets to drive a cohesive vision across CX, digital, marketing and branding could really differentiate a brand and the engagement with Millennials.”
Some methods hotel companies could continually assess their overall loyalty programs, as well as their ability to create moments to drive loyalty include catering to both business and leisure travelers in a customized manner. While leisure travelers are more price-sensitive, business travelers are looking for the most points’ offerings for use on a future personal trip. Brands are well advised to tailor benefits and loyalty programs accordingly.
PwC, U.S. also suggests recognizing all age groups to shape and implement loyalty programs. While Millennials are driving rapid change across industries, their attitudes and behaviors toward loyalty programs are not unique. The survey found that while some preferences may vary, Millennials’ criterion for a desirable hotel loyalty program is closely aligned with older age demographics.
—Matthew Marin