What Millennials Really Want in a Hotel Loyalty Program
Millennials have often received a bad reputation when it comes to their loyalty to brands, mainly because they have been approached with the same advertising mindset that was used for their predecessors.
This is a new breed of consumer that will take a new way of thinking to earn their allegiance. Once this mentality has been adopted, it will ultimately dissolve any unfair connotations that have been linked to this generation – and show you why you can get your Millennial guests to be brand loyal.
We’ve been diving into this topic to help marketers better understand what drives this demographic. In our last article on Millennials and loyalty, we uncovered that Millennials want brands to publish authentic content, they want to be approached on their own terms and they aren’t influenced by traditional advertising. Does that mean Millennials will never become brand loyal consumers?
A new study conducted by Software Advice (a hotel management research firm) surveyed a group of 18 to 34 years old Millennials consumers to determine their views on hotel loyalty programs. This survey helps flesh out a clearer understanding on what it takes to get this generation to repeatedly book with your hotel and why Millennials are actually more brand loyal than they get credit for.
“The idea that Millennials are less brand loyal than past generations is being refuted by new reports that show they can be more brand loyal. They just have more information by which to make decisions, so they’re pickier about brands they choose to do business with,” said Taylor Short, Market Research Associate, Software Advice.
“With that in mind, hotels should be able to attract these travelers by remaining relatable in marketing campaigns and appealing to Millennials’ desire for immediacy and transparency. Hotels need to clearly present a loyalty program that offers easy-to-earn and useful benefits.”
Let’s take a closer look at the results of the study.
Millennial Enrollment in Hotel Loyalty Programs
Of those surveyed, only 14% of Millennials are enrolled in at least one loyalty program. This presents an unbelievable opportunity for future growth. Getting Millennials to engage with your hotel’s loyalty program helps not only boost customer retention but as they earn more points in the future, they tend to spend more with that particular hotel brand. If 86% of the respondents to the study claim to not currently participate in a program, this leaves a massive gap proving it’s time to start strategically cater to Millennials.
Millennials Join Hotel Programs Because of Brand Loyalty
46% of respondents in the study join hotel rewards programs because of their loyalty to a brand and 41% join because the rewards are easy to earn. Millennials crave simplicity. If a program is loaded with restrictions or you have to jump through a ton of hoops just to redeem the rewards, they have already tuned you out.
A personal connection also goes a long way with Generation Y. A “surprise and delight” approach by occasionally sprinkling in unexpected rewards in the form of a thank you note or a coupon to the restaurant is a small gesture that can really go a long way.
Now brings the million dollar question as to what they want to use their points towards. 51% say they would redeem their points on free or discounted stays, as opposed to 19% and 12% opting for room upgrades or airline tickets, respectively.
Now with regards to the realm of social media, some hotels award points for guests who post about their property on Facebook or Twitter. However, the study showed mixed results with 53% respondents saying they are “very or moderately likely” to post with 47% “minimally or not at all likely” to post about a hotel on the social sphere to earn points.
We know that Millennials live on social media and frequently post on behalf of a brand, but there has to be an authentic connection where they fully buy into the message of a certain campaign or what the organization as a whole stands for. We’ve seen this theme remain consistent when measuring Millennials and what plays a factor in their brand loyalty.
Most Millennials Find Mobile Loyalty Apps Valuable
Mobile devices reign supreme with Millennials as many use them like it provides oxygen. 58% combined say they would find a mobile app for a hotel’s loyalty program “very” or “moderately valuable.” Mobile apps will eventually play a key role in how Millennials engage with a loyalty program but hotels need to first prove it’s beneficial for them to download.
“Hotels can take a few tips from companies that derive big business from Millennial consumers. For example, they eat at Chipotle often, and it’s because the restaurant chain consistently touts messaging that taps into Millennial values—organic, fresh food from free-range animals without antibiotics or pretension,” said Taylor Short. “When traveling, Millennials want a unique, personalized trip at a good price, so when marketing to them, hotels should demonstrate how their loyalty program can help deliver that experience.”
This study provides a solid benchmark in terms of bridging this wide gap. Millennials are set to take over the workforce in five years and will account for 1/3 of the adult population in the United States. In the next five to ten years, as Millennials enter their peak earning period, this generation will provide the majority of spending for travel and leisure, so targeting them now in terms of loyalty is a smart investment towards this highly lucrative group.
Here are a few key findings from the study.
- Millennials want simplicity, relevance and surprise. A hotel loyalty program should be easy to join and earn points through.
- It should include unique rewards that are personal and unexpected. A combined 70% of Millennials most often spend loyalty program points on a free or discounted stay or a room upgrade.
- The opportunity to attract new Millennials (18-34 years old) to enroll in a hotel loyalty program is huge: 86% do not currently participate in a program.
- 46% of Millennials say the number one reason for joining a hotel rewards program is because they are loyal to the hotel brand.
To help facilitate your expanding knowledge of Generation Y, download our eBook: Let’s Talk Targeting-Volume 1: The Millennial Traveler.