What is driving consumer loyalty?
Redwood Shores, California – 15 February 2017
Oracle revealed studies identifying the consumer drivers for loyalty in the food and beverage and hotel industries and the impact of technology in curating a unique hotel guest experience. Insights from both studies highlight a global demand for loyalty programs in the hospitality industry and the critical role of technology to inspire hotel staff to create memorable guest experiences.
Loyalty programs are a critical driver of repeat business for both the food and beverage and hotel industries with their ability to identify consumer habits, demographics and personalization opportunities. With these insights the hospitality industry can more effectively create frictionless experiences that encourage repeat engagement. To better understand what makes loyalty programs most effective Oracle Hospitality recently conducted a survey of 6,500 global food and beverage consumers and 8,000 hotel travelers represented by the U.S., Brazil, Mexico, Australia, U.K., Germany, France and Japan.
Key insights from the research for the food and beverage industry include:
- Consumers around the world want to join loyalty programs. In the U.S., 65 percent of consumers are already members of one or more food and beverage programs. Even in Japan, where the lowest percentage of consumers were already members of a program from our survey, nearly one-third belonged to a loyalty program.
- Plastic loyalty cards remain the preferred loyalty tool with mobile applications gaining popularity. At 62 percent overall, plastic swipe cards were the most preferred method across all generations. At a 56 percent preference, Millennials wanted to use apps for loyalty programs and 50 percent of Gen Xers also agreed that apps are a preferable method.
- Perceived personal savings drive loyalty. Money off of every purchase (71 percent) and free products (63 percent) were the top two most attractive rewards to consumers.
“Loyalty programs provide restaurant operators with the opportunity to reward guests for repeat business, to create a marketing database for personalized promotions, and to guide the strategy for future programs ensuring their relevancy,” said Mike Webster, senior vice president and general manager, Oracle Hospitality and Oracle Retail. “Oracle Hospitality has a differentiated offering that leverages best-in-class, cloud POS with an integrated gift and loyalty solution and cloud analytics suite that minimizes the creation of disparate data silos which can create false perspectives of guest engagement.”
What Do Consumers Want from a Hotel Loyalty Program?
Key insights from the research for the hotel industry include:
- Hoteliers still have a chance to create long-term relationships. Among all survey participants, 58.7 percent reported that they do not belong to a hotel loyalty program. A mere 3.2 percent stated that they belong to 5 or more.
- Loyalty initiatives are “sticky” and encourage repeat stays. Globally a pattern of repeat business was evident among respondents, ranging from 33.6 percent of Australians to 53.8 percent of Mexicans who said they often stay in hotels that offer loyalty programs.
- Consumers want control over how they redeem rewards. Globally a majority of consumers identified that they are interested in being able to choose how they redeem their rewards (61 percent) and 57 percent are interested or very interested in being able to customize their hotel guest experience (room choice, newspaper, late check out, etc.).
Creating the Coveted Hotel Guest Experience
Oracle Hospitality also polled more than 2,700 travelers from the U.S., U.K., France and Germany to better understand technology’s impact on the hotel-guest experience and gain insight into how technology investments can be a differentiator for winning consumer business. The study also adds perspectives of hoteliers, both chains and independents, to shed light on their technological pursuits and gauge alignment with consumer expectations.
Key insights from the study highlight opportunities to engage guests prior to and during their hotel stay:
- Nearly two-thirds of U.S. guests said it was “very or extremely important” for hotels to continue investing in technology to enhance the guest experience.
- Ninety-four percent of business travelers and 80 percent of leisure travelers value the ability to use their smartphones to request service and message hotel staff.
- Guests are comfortable sharing with hoteliers a fair amount of personal information: 71 percent would share information about food preferences/allergies and 64 percent would share their entertainment preferences.
- Sixty-two percent of guests used non-hotel sources such as the Internet for dinner reservations and activity recommendations, bypassing the concierge from whom guests say they would prefer to get such assistance.
The full findings of the report can be accessed here and point to a critical opportunity for hoteliers. Once travelers arrive in the lobby, their notion of a memorable experience can be shaped entirely by the deeds and words of hotel staff which can be informed and augmented by technology investments.
“Rather than worry that greater reliance on technology will erode the human aspect of hospitality, hoteliers need to embrace it for what it can be – an invaluable tool to better understand their guests and orchestrate stays that they will long remember,” said Mike Webster, senior vice president and general manager, Oracle Hospitality and Oracle Retail. “Technology can address the industry’s dual challenge of operating efficiently at scale and simultaneously providing individualized service.”