iSeatz State of Loyalty Hospitality Rewards Report

The Newest in Lodge Loyalty – Prioritizing On-Property Engagement and Personalization

Within the mixture, lodge loyalty applications are inclined to evolve progressively, however one of many notable traits over the previous few years was hospitality manufacturers leveraging their loyalty and rewards applications to interact with company off-property and to drive income when occupancy charges and on-property spending have been low. We tracked this pattern in our annual evaluation of main lodge chain loyalty applications, discovering that earn-and-burn choices elevated between 2019 and 2021, notably for flights, excursions and actions, and floor transportation.

In accordance with our most up-to-date State of Loyalty: Hospitality Rewards Report, nevertheless, this pattern appears to have run its course. Buoyed by sturdy journey demand in 2022, which continues even amid financial uncertainties, reward choices have both plateaued or decreased because the hospitality trade turns its consideration again to its core product: room gross sales and on-property choices. What influence has this improvement had on loyalty applications? Based mostly on our evaluation, there are a few rising traits in hospitality that match neatly inside the loyalty construction: the unbundling and upselling of ancillaries and AI-fueled personalization.

What each have in widespread is the concept lodge company ought to have extra management over their experiences.    

Staying à la carte:  Lodge Ancillaries on the Rise

Although resorts have at all times supplied company with choices when reserving (two double beds vs a king, as an example), many points of their keep have been bundled below one umbrella. Now, resorts are taking a web page from the airline playbook by breaking up bookings and providing perceived upgrades like flooring choice, room location, view, and early check-in as ancillary merchandise. Though initially derided, this pricing technique has paid dividends for airways. In accordance with the U.S. Bureau of Transportation Providers, after airways transformed checked baggage into a definite product within the early aughts, revenues from this class elevated seven-fold from 2007 to 2010.

Hoteliers consider that unbundling merchandise and upselling them as ancillaries can do the identical for his or her trade. A research by Skift and Oracle launched final yr discovered that 85% of hospitality leaders count on ancillary revenues to make up a bigger share of their annual income by 2025. Whereas not all company will care about whether or not their room is on a excessive flooring or comes with a picturesque view, sufficient do this it might make an actual distinction. In accordance with the American Lodge & Lodging Affiliation (AHLA), “over half of customers from internationally (54%) stated they’re prepared to pay extra to decide on their view; 38% to decide on their room; and 32% to decide on their room flooring.”

What these numbers sign is a need amongst hospitality clients to select and select (and pay for) the options they most care about.

Integrating Ancillaries into the Rewards Construction

Alongside the unbundling and upselling pattern, lodge manufacturers have additionally boosted the power of their loyalty members to pay for on-premise objects utilizing their factors, notably eating and wellness companies. Not like some reward redemption classes which have stagnated or decreased in the course of the present journey rebound, lodge eating and wellness have seen regular progress within the final 18 months, enabling loyalty members to reinforce their stays whereas rising spend on the property. Radisson Inns America, for instance, added the power for loyalty members to redeem factors towards on-property wellness companies this yr, whereas Melia Inns launched the power to earn factors on eating.

Increasing the incomes and redemption alternatives out there to company whereas they’re on property helps enhance the utility and perceived worth of the loyalty program whereas maintaining the rewards foreign money inside the lodge ecosystem. Ancillary companies or experiences could be built-in into the loyalty framework, encompassing the whole lot from unique cooking lessons with a chef to premium seaside entry. This integration offers members with incentives to interact with this system all through their complete keep.

By encouraging repeated engagement with their loyalty program by on-site redemption choices, lodge manufacturers can gather invaluable information about traveler behaviors and the way company are consuming the out there services and products. Incorporating extra on-property earn and burn choices can assist lodge loyalty applications with comparatively slender rewards portfolios entice members who wish to maximize worth on their journeys and compete with probably the most feature-rich applications like Marriott Bonvoy and Hilton Honors.

The Chat GPT-ification of Journey

Personalization is much from an rising pattern in hospitality. However the meteoric rise of synthetic intelligence through Chat GPT indicators a brand new manner for customers to seek for journey and develop their itinerary. Since launching in October of final yr, massive names in journey like Expedia and Kayak are already incorporating it into their reserving platforms. Whereas Chat GPT can assist ship the kinds of customized experiences hospitality customers are in search of, with out strong information, it dangers falling brief. Inns that may join totally different information sources, together with reserving platform information and knowledge of their Buyer Relationship Administration instruments will higher have the ability to create fashions that predict buyer wants.

Loyalty applications are an information goldmine. iSeatz mapped loyalty member information with transaction information on our journey rewards platform and located that members who often used the platform to earn and redeem factors on rewards like automotive rental and excursions and actions had a 5X larger 10-year common buyer worth, booked 8X extra often (with 50% fewer cancellations), and had a 10X larger spend on core merchandise. Inns can study patterns amongst their company with the very best Buyer Lifetime Worth and ship customized presents to company with related attributes robotically utilizing Chat GPT or different AI and machine studying instruments. 

Although the unbundling and upselling of ancillaries and delivering customized experiences by AI may not appear related on the outset, each allow company to have extra management over their stays. Each additionally require expertise investments in loyalty platforms to render them extra dynamic to allow them to higher leverage information and ship rewarding individualized experiences that construct true model loyalty. Because the journey surge continues – for ever and ever – count on extra resorts to construct out these capabilities (and resume increasing their rewards portfolios) to compete extra successfully and maximize each income and buyer lifetime worth within the present high-demand surroundings.


Andy Hermo is the Chief Business Officer at iSeatz, a loyalty expertise firm.

As iSeatz’ CCO, Andy leads the event and implementation of the iSeatz business technique to drive enterprise progress, profitability, and enhance buyer satisfaction. Andy has over 30 years of management and business technique expertise within the journey and hospitality, shopper packaged items/retailing and monetary companies industries. Previous to becoming a member of iSeatz, he was VP and Common Supervisor of Enterprise accounts at Sabre Hospitality Options and a founding companion with Hudson Crossing, a Journey Trade consultancy. Andy additionally held business management positions with different esteemed manufacturers, together with Cendant Journey Distribution Providers, Dun & Bradstreet, and GE.

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