Gen Z represents over $40B in spending power and has an outsized influence on household purchasing decisions. Already a powerful customer segment, they’ll soon be the largest population demographic and have the most disposable income. Clearly, when cultivating customers, travel brands need to ensure that loyalty programs keep pace with Gen Z’s evolving technology demands.

Today’s travelers respond positively to personalized offers; these can forge strong emotional connections as well as memorable travel experiences. And it’s these emotional connections that build a strong foundation of loyalty which directly impacts the bottom line. A recent CapGemini study found that 70% of emotionally-engaged consumers spend up to two times or more on brands they are loyal to, compared to less than half (49%) of consumers with low emotional engagement. For airlines and travel brands, the need to drive direct bookings and grow revenue is constant. Creating emotional connections with travelers is a successful way to achieve both; building brand loyalty that converts.

As we explored in our last blog post, ‘Using Flexible Loyalty Strategies to Reward Your High-Value Hotel Guests,’ travel brands can fuel greater loyalty program engagement by offering personalized and curated rewards offers to high-value guests who travel frequently and have a sizeable travel spend. But hotel brands shouldn’t discount the lower-value tier of hotel guests who might only book once or a few times a year. Your brand can unlock their potential value by keeping these guests loyal and engaged during their stay, even if infrequent. In this second part of our two-part series about successfully engaging guests across different tiers, we examine ways you can leverage customer data to identify what your lower-value guests desire most and how innovative travel ecommerce technology can enable flexible reward redemption.

Getting to Know Who Your Lower-Value Guests Are and Understanding Their Priorities

Your lower-value guests provide your hotel with a critical revenue stream and a way to help keep your rooms full. While they may exert a low social referral influence overall, if your loyalty program can address their needs with specific offers, they can prove to be a powerful revenue and referral source for your brand in future. These redemption offers are major opportunities for your hotel brand to show your guests that they’re both valued and important. That said, it can be a challenge to find the right offers to persuade them to enhance their stay with ancillary purchases and to return as future guests.

Keep in mind that although your lower-value guests often have lower points balances, they still want to burn them. Rewards that offer immediate redemption value (such as a free or discounted meal) are best for this segment. This way, your guests don’t have to wait until they accrue enough points for a larger purchase. Even simple rewards like fresh-baked chocolate chip cookies in the lobby can begin to build loyalty with guests.

Flexible Loyalty Redemption Enables Bigger Buy-In

Once your guests take notice of your personalized offers, they’ll want to start redeeming right away. How can you empower them to become active participants in your program?

No matter what their tier or segment, your guests must have actionable ways to redeem their current loyalty currency. Providing your loyalty program members with the ability to use points-plus-cash to earn and/or redeem offers increases your program’s value. When given access to points-plus-cash redemption, guests have a larger average cart size according to Switchfly data sourced from several leading hotel brand properties.

Customers often view loyalty points as their separate “bank account” and as extra money. This encourages people to spend more overall, because the rewards are being pulled from their different accounts (one in cash, one in loyalty currency). As a result, guests at all tiers have the freedom to “splurge” whenever they want. Our data also shows that offering points-plus-cash allows guests to ‘go big’ and make larger bookings contrasted with those using points only and creates engagement earlier in the rewards relationship. Points-plush-cash functionality thus doubles as a revenue driver and also an effective way to increase loyalty program participation for different guest segments.

Switchfly Platform Enables Personalization and Guest Segmentation

The full realization of points-plus-cash as a loyalty driver requires hotel brands to have a tech platform in place to turn customer data into irresistible offerings.

Switchfly’s feature-rich travel technology gives loyalty program managers an effective way to spotlight customer data and guest preferences, enabling relevant reward offers based on member behavior and segmentation. Our segmentation rules allow brands to customize their price offers for each group of users based on business rules.

By tailoring offers to your newer guests—and giving them the versatility to redeem with points and cash—your hotel brand will allow more loyalty program members to engage. You may soon find that your guests with lower balances are eager to redeem once you’ve given them added purchasing power.

Hotel brands with loyalty programs can benefit most from incentivizing different types of guests using personalized offers including rewards tailored to customer behaviors, a point I reinforced in a recent article in Hospitality Technology Magazine.

Prime among them are your high-value guests who travel frequently and typically spend more than other guests, making them your best customers. However, it can be a challenge to ensure that your brand’s loyalty program is relevant enough to keep them consistently satisfied and engaged. How can you identify the specific offers that speak directly to them? 

In this first part of our series on hotel loyalty strategies, we’ll examine what your high-value guests desire most—and how you can use innovative travel ecommerce and loyalty technology solutions to drive ongoing engagement with your brand and your loyalty program.