U.S. weekly hotel occupancy hit its highest level (69.9%) since late October 2019, according to STR‘s latest data through June 26. This is only down 7.3% from the same week in 2019. Additionally, ADR and RevPAR were the highest of the pandemic-era, and weekend occupancy surpassed the 2019 comparable for the second time in three weeks, while ADR was 13% higher than the corresponding weekend from June 2019.
Undoubtedly, travelers are hitting the road and the skies in search of a vacation. As they do, customer engagement should be a priority for most hotel brands. However, what used to mean customer engagement in a pre-pandemic world will no longer be good enough for the modern traveler. So, what’s a brand to do? To find out, HT spoke with Geoff Ryskamp, Global Head- Hospitality, Travel & Leisure at Medallia to find out.
What did customer engagement mean before the pandemic?
Before the pandemic, service in travel and hospitality largely sat in two planes: transactional, where a specific location would manage a relationship and work to maximize the customer experience throughout their stay, and brand-based loyalty programs, where customers would make purchase decisions based on broader brand loyalty or associated program benefits.
With the distributed structure of most hospitality organizations, whether geographically or with ownership groups or companies representing a house of brands, an interesting principal/agent dynamic can arise when it comes to the customer experience. For example, a specific hotel manager or owner may be primarily concerned with a customer’s experience when they’re on the property. There was no incentive to do otherwise.
This industry dynamic made it challenging at times for brands or affiliations to connect the dots of the customer journey and create a holistic experience across channels and touchpoints.
What did it mean during the pandemic when travel was significantly reduced?
The between-stay period, when guests were back from business or personal travel and planning their next stay, had become a greater focus of the more sophisticated players in the industry. How do you ensure guests have great experiences that make them want to come back? Even as restrictions have lifted in large part, we’re in the midst of a forced longer term between-stay mode. Companies that didn’t establish methods to engage consumers and maintain a pulse for experience between stays were caught flat-footed. Take a business traveler who typically books a particular hotel with partial motivation to earn points. We have seen a year off from steady business travel has changed that behavior. As a result, you can no longer count on customer booking based on a loyalty program alone. Consumer purchase criteria has changed drastically, and it now leans heavily toward valuing the actual experience.
What does it mean now as consumers begin to plan travel?
It’s not overstepping to say the hospitality industry is undergoing the biggest disruption in customer loyalty ever. Even as people begin to travel again, there is a good chunk of customers who are not traveling as much as they were previously for business and are trying new brands or locations. Hospitality businesses now must find ways to continue to engage the customers they already have, and the vast pool of prospects looking to dip their toe in the water with a new brand.
What can hotels do to elicit engagement? What technologies do they need to use?
Today, customers are making purchases based on a different set of criteria. They are also using different channels to interact with hospitality companies in a meaningful way. Organizations need to use technology to both understand what the customer is looking for and to implement those experiences.
Companies that have a means of understanding what consumers are looking for, whether through analysis of contact center calls, digital booking channels, messaging on property or even good-old post-stay feedback, are investing in areas they have previously shied away from.
Also, it is critical that organizations look broadly at the customer touchpoints and stop thinking, “What department was that in?” They need to have a system that can enable them to look across the entirety of the organization and tell them what the customer experience is holistically. Great customer experience programs have always been about way more than watching a score go up and down, but what makes the score change. Deciphering unstructured data, open comments, behavior on digital channels and what’s said during engagements with the contact center provides this.
How do they need to change the way they engage with potential guests and actual guests?
There needs to be an understanding of how different parts of the organization interact with customers, as opposed to operating with a focus only on their silo. From the website to the contact center, on-premise staff and marketing team, technology can help organizations gain that important understanding.
Hospitality organizations also need to be thinking about the critical between-stay dynamic. A big part of what successful companies will do is after the customer leaves, thinking about how to get that customer back, how to engage that customer even when they’re not staying with them. And that approach needs to be omnichannel, where customers are.
With booking/cancellation policies now more flexible, guests have started looking at travel the way they used to 15 years ago, when they would put their travel reservations on hold and book/rebook. This creates a challenge of a prolonged purchase process, however companies that are being flexible today and understanding the experience at these purchase decision points (digital, call center, social etc.) are gaining and retaining customers because they are aware of the behavior and experience at each step.
How does engagement lead to loyalty?
There are not many other products that customers spend as much time preparing for, or getting excited about than hospitality & travel experiences. People are spending their hard-earned time and money to research and stay with a specific brand or location. Organizations that truly understand and listen across the journey have the ability to provide an experience that meets - and surpasses - customer expectations. Solving any gaps along that holistic omnichannel experience is what creates loyalty.