viabledesign

I'm currently on a road trip through Southeast Europe. Most of my hotel stays have been booked directly through the app of a specific hotel chain. However, I used a voucher from a hotel broker, which I received as a birthday gift, for two nights. Despite this, I remained loyal to my preferred hotel chain and used the voucher for stays in their properties. Throughout my guest journey at these hotels, I received mixed signals. The general message, however, was clear: "If you book through a third party, you won’t receive any points or other perks that you would normally be entitled to due to your loyalty status."One particularly puzzling experience occurred at a hotel in Austria. Upon check-in, the night porter thanked me for my loyalty, which was visible in my profile due to my status, and offered me a complimentary breakfast. In my room, I found two complimentary bottled drinks and a welcome note from the sales manager, also expressing gratitude for my loyalty. It was all the more surprising when, at checkout, the front office manager attempted to charge me for the breakfast and informed me that I wouldn’t earn points for additional expenses like parking. She explained that this was because I had not booked through the hotel’s own system. During my second stay, I was informed at check-in that I wouldn’t earn points, but that breakfast would still be offered free of charge.

I believe it's risky for hotels to tie the recognition of loyal customers' status to bookings made exclusively through their own channels. This inevitably raises the question: Are loyalty programs about loyalty to the hotel chain or loyalty to the booking channel? Excluding points and status benefits for third-party bookings has a decidedly "educational" undertone. From the perspective of loyal customers, it’s frustrating when the status and benefits they’ve earned over years are suddenly denied. It also squanders a valuable opportunity with new customers. Once they’ve crossed the threshold of the hotel, it would take relatively little effort to convert them into loyalty program members. From the hotel chains' perspective, the strategy is clear: they aim to protect their own sales channels and limit costs for less loyal customers, even as they deliberately adopt a multi-channel strategy to attract a broader customer base.

As a consultant, I believe this channel conflict needs to be resolved to prevent damage to both the hotel and the chain. Nothing is worse than frustrated customers and the negative impact they can have. But how can such a conflict be resolved in a way that satisfies both parties? One solution could be to offer reduced bonus benefits to loyalty members who book through third-party platforms, thereby rewarding their loyalty at least in part. It’s essential that this is communicated transparently to avoid conflicting messages to customers. Status members should be informed throughout their customer journey. Fundamentally, a hotel guest with status should always feel a bit better treated than a guest without status. Categorically excluding customers from earning points or other benefits may drive them to explore competitor offerings that might ultimately suit them better. Therefore, I recommend providing these customers with clearly defined benefits, such as a fixed number of points or a breakfast voucher, as they still generate revenue for the hotel and chain, even if indirectly. While commission payments to booking platforms are unavoidable, the net revenue driven by the customer still benefits the hotel.

Hotels and hotel chains often express concern about the decline in customer loyalty and the rise of hybrid customer behavior. Ironically, these same entities leverage hybrid sales systems, or multi-channel strategies, which, while beneficial, also create distribution conflicts. Allowing these conflicts to become visible to your most loyal customers signals a lack of strategic foresight regarding long-term customer development and retention. A shift in perspective is essential, as highlighted by the concept of "Customer Lifetime Value" (CLV), which advocates for a focus on sustainable, long-term relationships rather than short-term gains. In today’s increasingly complex customer landscape, where relationships extend beyond direct touchpoints, it is crucial to maintain a holistic view. The more stakeholders involved in the customer journey, as seen in multi-channel strategies, the more vital it becomes to prioritize the stabilization and nurturing of enduring customer relationships.