This article is part of our August series on travel and hospitality. Click here for more.
Hotels have always known they are in the game of providing little “wow” moments that drive loyalty. The latest trend in the industry is to use that brand love to get customers booking direct, avoiding the temptation to seek out a better deal on an aggregator’s site.
By launching apps that make the customer journey as seamless and as pleasant as possible, the hotel chains hope customers will come back to them through the app to book direct.
Geraldine Calpin, CMO of Hilton Hotel Group, revealed that delighting customers is central to the company’s new strategy, as borne out by her appearing on three Cannes panels this year that concentrated on how brands are becoming experience businesses.
“It’s not just marketing anymore–we’re in the experience business,” she said. “We want people to love us, become loyal, and come back direct through our loyalty app, and so we looked at any friction points the app might be able to help with. Part of that was looking at how others who may also have them have dealt with similar issue, and the obvious choice was travel.”
Lessons About Choice
One of the early observations was that airlines use mobile apps to offer consumers more choice so they can avoid the dreaded seat in the middle of a row, as well as speeding up the journey, where possible.
“Picking your seat and checking in the day before were obvious lessons we could learn, and we have,” Calpin said. “We always let people select a preference for the type of room and location within a hotel, such as near the lift or the ice dispenser, but now we are beginning to allow people to actually choose their room in some properties.”
To do so, Hilton is overlaying Google Maps, enabling users to move around the hotel and pick the room facing whichever direction they prefer.
“They can then check in the day before, so their arrival is a lot more seamless, and we’ve just started rolling out using the app as the key to your room so you don’t need to approach the front desk if you’d prefer not to,” Calpin said. “You can also use the app to check out.”
Cutting Out The Middleman
InterContinental Hotels Group (IHG), the global brand, which includes Crowne Plaza and Holiday Inn, has undergone a very basic switch. Apurva Pratap, vice president for distribution and commercial marketing, revealed the group has adopted a dual strategy of improving customer experience as well as reducing how much inventory third-party sites can access. By not selling large numbers of rooms in advance to wholesalers, its rooms should not now be found cheaper elsewhere than when booked direct.
Pratap revealed IHG also has been working to ensure app users have a friction-free customer journey, so, hopefully, they should never want to look elsewhere.
“Having our loyalty app is a little like having an Apple ID,” he said. “It means you get instant Wi-Fi access without having to ask anyone for a code, and we’re working on a beacon project in China to see how people react to being shown what services and offers are available in each part of the hotel as they move through a property. If it’s popular, we’ll likely roll it out.”
Leisure Or Business?
One missing piece in the customer journey was not always offering full customisation of a visit, which might change when someone is in work mode or on leisure, Pratap said. So each app user now has two profiles that can store favourites for each type of trip.
“We’re now rolling out further customisation, starting off with 20 British hotels in July where we’ll have dozens of variables,” he said. “It might be the types of pillow or bed choice, for work or leisure trips, or whether a guest needs an ironing board. We’ve also rolled out guest requests across 500 hotels in the Americas where guests can order room service and other services through the mobile app, and they can even stream content from their phone on to the room’s TV.”
Pratap said the strategy is paying off in the U.S., where its app technology was first rolled out last year. Previously, there was an even split between third parties and direct customers, but now the latter accounts for two in three bookings. In the U.K. and E.U., there is, similarly, a near-even split between direct and indirect booking, which Pratap predicted will move away from aggregators next year when more of tech advances trialled in the U.S. are rolled out.
Rick Garlick, global practice lead for travel and hospitality at market researcher JD Power, said his research has shown this trend of trying to cut off third-party sites in favour of a brand’s own app is a strategy many chains are pursuing. He jokingly referred to it as a “cold war” that has emerged from the “love-hate” relationship between hotel brands and the online travel agents. The trouble is, some significant challenges await.
“Both in the E.U. and North America, the customer isn’t quite where the hotel brands want them to be,” he said. “Around one in five will download their app, but only one in 20 will book through it. Not making yourself visible on third-party sites also cuts down on the chances of someone discovering you on another site and then looking you up to book direct.”
The hotel brands are right in seeing the mobile app as a means of improving customer experience, he added, because the research firm has found high customer satisfaction ratings are linked to an app users find useful. However, he warns technology might not be the only answer because helpful staff and great customer service are always the best ways to build strong loyalty.
Garlick also pointed out how, in America, most hotels are part of a branded chain and customers like a predictable “cookie-cutter” experience. The same does not apply in the E.U., particularly the U.K. In Britain, fewer than half of hotels are part of a well-known chain, so customers tend to be less brand-conscious.
Building up brand loyalty to the point where customers are minded to book direct through a chain’s app, then, is a twin challenge that will require hotels to significantly change customer behaviour, he said.