Loylogic is a leading reward solutions provider to loyalty program sponsors worldwide, helping clients to steer and increase the value of their loyalty currency by combining state-of-the-art technology with an international reward network, an one-to-one with Steven Landuyt.

1. What makes loyalty programs particularly important for the hotel industry?

Customer loyalty is key to the success of many businesses worldwide.  Loyalty drives increased product usage, increased spend, and affinity between a brand and its customers.   As the travel industry continues to recover from the downturn, hotels can feel the benefits. 

However, it is a new type of guest that is accommodated today -  one that will be much more familiar with their options and the benefits and value they receive.  With more and more online booking engines commanding highly competitive rates, and budget air travel on the rise, low priced travel is increasingly available.  Hotels are in a more competitive environment than ever. 

A key differentiator for hotels can be their loyalty program.  It encourages direct booking, independent direct marketing, additional value and customer benefits, but most importantly it rewards customers for using a particular brand in this competitive environment. 

2. What kind of rewards and redemption options are important for hotels to be offering to their loyalty program members?

The rewards core to any program will always be extremely important to loyalty program members. Therefore, room upgrades, late check-outs, dining options, and hotel activities are fundamental to the success of a hotel loyalty program.  However, there are consumer segments that spend a lot of time in hotels and would like their loyalty to be rewarded in other ways. 

Similarly there are customer segments that travel less frequently and would like to be rewarded in ways more akin to their everyday lifestyle.  Therefore, in order to engage all customer segments, it is important for hotel loyalty programs to offer a range of reward options; from travel partnerships, to merchandise, to unique experiences.    With this reward mix customers can really choose the reward that excites them, and is the best opportunity for a program to command their loyalty.

3. Do you have any suggestions for how hotels can increase redemption/participation rates on their loyalty programs?

I would never dismiss the established mediums of direct marketing, incentive offers, and partnerships in order to drive redemption and participation rates in any loyalty program.  For hotels I think there are some key features that can drive an increase in customer acquisition, engagement levels in the program, as well as redemption rates, and they all stem from flexibility. 

Firstly, increase the means by which a customer can earn points.  Allow spend with your partners to earn points into your program.  Create shopping malls where customers can spend on their everyday goods, and receive points into your programs.  Highlight specific products that customers can purchase for a fixed number of points: these mechanisms all provide an increase in customer engagement by creating more program touch points, and at the same time can drive revenue and reward particular activity. 

I would encourage hotel loyalty programs to ‘go global': customers will visit your properties from all over the world, so don't exclude them from your loyalty program benefits just because they do not live in one of your core markets. 

Make the program flexible – as well as creating addition options to earn points, make it easy for them to redeem.  Keep the processes simple, and allow them access to the entire catalogue with points-plus-cash redemption technology. 

Customer value is critical.  I previously mentioned the value and benefit savvy customer of today; they will shop around to understand which program is best, and where the best value can be sought.  There are also many independent forums that will critique your program, and value is always the most vulnerable.  Keep the program as dynamic as your customers are diverse, and you will create a winning combination.

4. What trends do you see in hotel loyalty programs for 2011?

I see an increase in loyalty program partnerships as programs align, and large brands merge, which will drive the revolution of some of the most recognized programs in the travel sector.  This will also increase the flexibility customers can enjoy in the transference of their loyalty currency from one program to another, which will in turn further drive the importance of program quality and value.

 There will be an increase in mobile-managed loyalty programs which will not only give customers information at their fingertips, but will drive a more intrusive style of offer based marketing based on location and previous spend activity.  Social media will continue to cement its position through tools like Facebook advertising.  Community based segments like Groupon or Gilt will continue to grow and gain market share across the hotel industry particularly within their loyalty programs.

5. How has technology helped hotel brands engage with their loyalty customers?

Technology has played a huge role in increasing customer loyalty through increased engagement.  I recently conducted a survey questioning consumer's preferred contact medium with their loyalty program, and internet is far and away the market leader.  It provides the majority of loyalty program marketing, and hotels are no exception to this. 

We have also seen the hotel industry launch its first mobile applications which have been greeted with open arms by consumers and the industry alike, and it will not be long before the full extent of the loyalty programs can be found within these applications.  This technology has provided a significant part of the flexibility that I stressed earlier, which is fundamental in creating the level of engagement between a program and its customers that is required to achieve success.

6. How important is it for global hotel brands to offer global rewards?

For the global hotel brands, global rewards are in my opinion absolutely fundamental to making loyalty programs successful.  The programs should work to the principle that their reward offering is as good in countries where they have fewer customers, as it is in countries where they have the majority of their customers. 

All customers are valuable, and in fact those that travel from further reaching areas will tend to stay for longer periods given the distance travelled.  In order to ensure these customers feel valued and the benefits of the loyalty program are realized, the redemption options available to them should reflect your commitment to them as your consumers.

7. How can partnering with other brands help hotels engage more customers (i.e. airlines with hotels, car rentals with hotels, etc.)?

I think this is an excellent means by which to promote the flexibility I have mentioned.  Joint marketing ventures, for example the promotion of properties within a set destination, are a great way to increase your product appeal.  These partnerships can also move towards creating complete loyalty holiday ‘packages'; a nut that is still yet to be cracked. 

Ultimately, in a cash environment the hotel is one of a number of significant components that makes up a trip.  A customer will always need the other components.  The partnership of brands and cross-pollination of their loyalty offerings will be the first step to making a complete loyalty-funded trip possible.

Steve Landuyt
Executive Vice President, Sales

Steve is the consummate strategic sales professional. He has led sales teams at American Express, secured multi-million dollar global transactions, negotiated for the Citi Cards Thank You Rewards team, and delivered numerous strategic sales seminars both in the U.S. and Europe. He has been a featured speaker at The Conference Board, The Institute of Supply Management and The New York Cash Exchange as well as a recipient of numerous leadership and sales performance awards. Steve will lead the strategic sales and business development initiative for the key vertical segments in North America to expand our global customer and merchant footprint. He holds an MBA from Thunderbird (The American Graduate School of International Management) and a BA from Michigan State University.