What’s driving brand loyalty this summer?

June 13, 2016

And other highlights of the first Hospitality Thought Leadership Series panel

Low gas prices and an uptick in employment are fueling a busy summer travel season this year.

Over this past Memorial Day weekend alone, an estimated 38 million Americans traveled, according to AAA—the second-highest volume on record for this holiday.

With throngs of consumers making lodging and travel decisions these next few months, the hospitality industry is keeping a close eye on the shifting concepts of brand loyalty within the rapidly changing, hyper-competitive digital marketplace.

Senior-level women hospitality industry leaders serving as panelists for the inaugural Cornell Hospitality Thought Leadership Series event

Senior-level women hospitality industry leaders serving as panelists for the inaugural Cornell Hospitality Thought Leadership Series event

Anticipating this landscape, the Cornell University School of Hotel Administration (SHA) brought together several industry matriarchs this past spring to share their expertise on the matter, at the launch of a new Cornell Hospitality Thought Leadership Series.

The April 11 event was held at the St. Regis in Washington, D.C., and attended by nearly 100 alumni, academics, and industry professionals.

Moderated by Kathy LaTour—associate professor of services marketing at SHA, and an expert in the area of marketing hedonic experiences—the Women in Senior Leadership panel explored brand loyalty challenges and forecasts faced by the airline, hotel, cruise, luxury, and food-and-beverage sectors.

“The old ways of gaining loyalty are starting to dissipate, as we get into this new digital customer value era,” LaTour said, kicking off the session. “There are lots of digital customer values that differ from old-fashioned customer values, and we haven’t really gotten the formula right yet. There is a way to generate brand loyalty for the future, but we’re all still struggling to find out what that is. We’re at a bit of an inflection point.”

That point generated an hour of debate from leading female experts, ranging from topics of high-spending versus high-volume loyalty programs, maintaining loyalty during crisis, and—most notably—attracting and retaining millennials.

Panelist Suzanne Boda, senior vice president of hubs and gateways at American Airlines, commented on how frequent-flyer programs are changing, now rewarding on a revenue basis versus a miles basis.

“The old ways of gaining loyalty are starting to dissipate, as we get into this new digital customer value era. There is a way to generate brand loyalty for the future, but we’re all still struggling to find out what that is.” – Kathy LaTour, associate professor of services marketing“Thirteen percent of our travelers fly

[with] us all the time,” Boda said, “whereas 87 percent of our travelers only fly [with] us once a year. We need both, but we have to start honoring the smaller, more loyal group that is really paying the bills. Many loyalty programs across the industry are following this trend.”

Other panelists aimed to redefine the millennial generation altogether.

“First of all, I think the term ‘millennials’ is broader than just a demographic connotation; it is really a psychographic categorization,” said Janet Brashear, managing director and head of the Hospitality and Travel Practice at Accenture Strategy. “The term ‘millennials’ is often shorthand for digital lifestyle. In travel, people [simply] want what they have seen in other industries and know is possible, such as the simplicity and intuitiveness around interactions that saves time and leads to great experiences, whether it is using a smartphone to check in and open the room door or to find a past receipt.”

And some sectors of the industry are more inclined to succeed with this new demographic, as Elizabeth Blau, MS ’14—founder and CEO of Blau & Associates, and one of the industry monoliths who helped develop Las Vegas’s food-and-beverage sector—pointed out about her niche.

“The restaurant sector of the hospitality industry is so high-touch to begin with, so I think we’re making a great impact on the millennial, tech-savvy group. It used to be the reservationist who answered the phone, but now no one wants to do that. They want to reserve on OpenTable, and have a place within ten seconds, without having to interact with people. The whole financial transaction is done at the table. They hand you a computer.”

Vicki Freed, senior vice president of sales and trade support and service at Royal Caribbean International, described a study her company conducted, investigating what it was that millennials insisted upon.

“The term ‘millennials’ is broader than just a demographic connotation; it is really a psychographic categorization,” – Janet Brashear, managing director and head of the Hospitality and Travel Practice at Accenture Strategy“Ease,” she said. “Easy was critical. So we began to develop a series of brand-relevant apps for this group to use while on board. They don’t like carrying paper around. So we looked at things they needed to make their experience easy. Wi-Fi was it, so we invested heavily in it and now have the fastest Wi-Fi at sea.”

Helping define brand loyalty for the luxury segment, Lisa Holladay, vice president of global brand marketing at the Ritz-Carlton Hotel Company, noted there really isn’t a generational gap among her audiences.

“Regardless of your age, when you’re spending that much money, you want to do it the way you want to do it,” Holladay said. “Whether that’s checking in with a concierge in person, or checking in on your phone. So we have to consider all possible needs and options. I think a bigger challenge with millennials is having a product that is more expensive than a younger person can afford. So, we’re learning how to drive brand loyalty with an audience that might not be able to buy the product just yet.”

The panelists all agreed that there are still many moving parts behind captivating the millennial audiences and that it’s likely to change faster than many companies can keep up with.

The Cornell Hospitality Thought Leadership Series—sponsored by Questex Hospitality Group, Hilton Worldwide, USA Today, InterContinental Hotels Group, and Taj Hotels Resorts and Palaces—will hold its next event this coming September in San Francisco, focusing on the topic of the shared economy.

Registration opens in July, so be sure to check the website for details later this summer, after you’ve gotten a few vacations under your belt.

Senior-level women hospitality industry leaders serving as panelists for the inaugural Cornell Hospitality Thought Leadership Series event

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