Customer Retention Strategies as Premium Travel Reverts to Mean.
By Vijay Dandapani
Friday, 13th August 2010
The Wall Street Journal last week carried a report headlined 'Premium Traffic Returning for Airlines', the article notes that Qantas and other Asia-Pacific airlines saw growth in premium and economy classes and that is now being driven by business travellers rather than holidaymakers.

It was particularly true of Asia-Pacific where premium traffic grew by more than 20 per cent as compared to last year. And intra-European premium traffic also showed strong growth of 23 per cent. That overall trend was true of the US as well where the US Dept. of Transportation noted that " load factors (occupancy) were at 82.5 percent for domestic flights and 79.3 percent for international flights, the highest recorded in any April."

Almost on cue, hotel earnings reported an uptick with Marriott reporting an increase in rates for the first time in two years with its Ritz Carlton chain leading the way. Others will, presumably, follow before long. However, there are pointers to be mindful of and lessons one could draw from the drought in luxe travel whose end one hopes is nigh.

For starters, the returning upscale customer is likely to be considerably more discerning and demanding with regard to both service and the product itself. Speed of response to service issues likely will set apart the good from the bad. At the very top of the former category is probably this example from the Pan Pacific Hotel in Singapore where a customer's web response during the day about the mattress quality was redressed by late evening!

Products could include a greater accent on eco friendly choices, a hit with customers across segments, besides featuring new products as was very creatively done by the high end chain, Fairmont, recently where its US based hotel guests will be able to take out BMW's specialty Cruise Bikes for free, a scheme that worked well in Canada.

The hotel chain also allowed for members of its loyalty program to hire adidas exercise apparel and pre-loaded MP3 players to use during their session. The Los Angeles Times reports on how some hotel groups are radically revamping their gift shops both to augment scarce top line numbers and to offer a "unique localized experience" driven by customers' urge to indulge in shopping besides spa or golf activity.

Finally, it is pertinent to be continually aware that luxury customers, like most others, are fickle and likely to revert to their shells at the first hint of fresh economic malaise, whether domestic or international.

The New York Times notes somewhat ominously that the wealthy have reduced buying in a blow to the recovery and that "at the high end, luxury hotel chains like the Four Seasons and Ritz Carlton said bookings were much stronger earlier this year but had recently slowed." Most hoteliers know that few other industries are as immediately affected by economic vicissitudes as theirs.

It is as yet unclear whether the luxury customer is here to stay a while or is merely testing the waters.

Vijay is Chief Operating Officer and part-founder of Apple Core Hotels- a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city.Member of the board of Directors - Hotel Association of New York.

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