IMPORTANCE OF LOYALTY

Hotel loyalty program partnerships critical to customer satisfaction, JD Power study finds.

Having a diverse portfolio of reward options with hotel loyalty rewards programs is a key driver of member satisfaction. According to the J.D. Power 2017 Hotel Loyalty Program Satisfaction Study, released this week, overall satisfaction is higher among program members who redeem rewards for dining, product purchases and special events than among those redeeming rewards for hotel stays alone.

The study measures customer satisfaction by examining four factors (in order of importance): ease of earning and redeeming rewards (35%); program benefits (27%); account management (22%); and member communication (16%). Satisfaction is measured on a 1,000-point scale.

“As loyalty and rewards programs of every type continue to saturate virtually every consumer market, the key to success for hotel loyalty programs is variety of reward offerings,” said Rick Garlick, Travel and Hospitality Practice Lead at J.D. Power. “Flexibility in how to redeem points and the ease with which customers can redeem those points are the key drivers of customer satisfaction in this space, which makes forming strong partnerships with third-party service providers a priority for hotel loyalty programs.”

Following are some key findings of the study:

  • Frequent travellers want more than hotel stays: Overall satisfaction is 138 points higher among hotel loyalty members redeeming rewards for product purchases at retailers. Satisfaction also is higher for redemptions involving special events (+124 points); car rentals (+103 points); and dining (+86 points).  Redeeming for hotel stays adds only 4 points, on average, to loyalty members’ overall satisfaction with a program.
  • Many customers do not understand how to redeem rewards: Among customers who say they fully understand how to redeem their points, overall satisfaction is 147 points higher than those who say they do not fully understand the process. Despite this powerful effect on satisfaction, nearly half of all loyalty program members indicate a less-than-clear understanding of how to earn their points and only 50% know how to redeem them.
  • Loyalty program satisfaction boosts brand loyalty: Of hotel stays booked in the past 12 months, 47% were booked with a brand affiliated with the member’s loyalty program. That percentage increased to 52% among members who say they are delighted with their loyalty program.

Hotel Loyalty Program Rankings

Marriott Rewards ranks highest in the 2017 study, and receives the Gold award for overall member satisfaction with a score of 806. World of Hyatt is the Silver award recipient with a score of 805, followed by Hilton HHonors, the Bronze award recipient, with a score of 793.

JD Power Rankings.jpgThe 2017 Hotel Loyalty Program Satisfaction Study measures member satisfaction with hotel rewards and loyalty programs. The study is based on 4,682 responses from rewards program members who experienced five or more trips in the past 12 months and was fielded in September-October 2017.