Study: Hotels Are Struggling to Find Relevance Among Younger Guests

NEW YORK—Oracle released the findings of a global study titled, “The Loyalty Divide, Operator and Consumer Perspectives, Hotels 2018,” auditing consumer perceptions and hospitality brand realities of loyalty programs and influences.

“The Loyalty Divide” reveals that hotel operators believe they offer personalized and relevant rewards while consumers disagree and look to social influencers for aspirational recommendations that drive their travel experience.

“Oracle Hospitality envisions a future where loyal guests are rewarded for their behaviors as we evolve beyond a transaction-based redemption model,” said Mike Webster, SVP and GM, Oracle Hospitality. “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.”

Hotels believe that guests would openly sign up to every loyalty program (61%) compared to the reality that consumers are much more selective and look for programs with real relevance: 30% rarely join loyalty programs; 46% only sign up to select relevant programs; and 24% sign up to every loyalty program. The divide between brand offerings and consumer perception is more apparent when evaluating relevance with 54% of hotels believing their offers are mostly relevant while only 22% of guests believe those offers are mostly relevant and 39% feel those offers are rarely relevant. Alarmingly, hotel brands do not currently engage influencers (62%) or brand ambassadors (71%) despite consumers clearly indicating they are more likely to trust recommendations by YouTubers (43%) and influencers (37%).

The study was conducted in February among 13,000 consumers and 500 businesses across retail, hotels and restaurants in nine countries across North America, Europe, Latin America, Asia-Pacific, Australia, Brazil, China, France, Germany, India, Mexico, U.K., and U.S.

The Future of Loyalty

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, according to the study.

  • 38% of millennials (25-34) and 32% of pre-millennials (18 to 24) note they are more loyal to hotel brands than before.
  • 29% of millennials plan to sign up to every loyalty program while Baby Boomers (55 and older) are more discerning with 40% of respondents noting they will only sign up to select, relevant programs.
  • 40% of retailers will only take into account activity measures of loyalty (customer surveys, loyalty card data, transaction data, etc.)

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