Half of hotel loyalty program members claim that hotel loyalty programs are no longer delivering the value they once promised, according to Accenture’s latest Consumer Pulse survey.
Despite the fact that the programs remain a valuable tool to increase customer retention, consumers now have higher expectations when it comes to perks, with the majority (89%) of hotel loyalty program member respondents saying they want to choose their own rewards.
With 43% of hotel loyalty program members reporting to be active generative AI users, Accenture hypothesizes that the technology has the potential to transform loyalty programs by enabling hyper-personalization and dynamic engagement, ultimately leading to more experiential rewards.
Loyalty preferences are changing
Accenture’s latest Consumer Pulse survey — part of the report “Me, my brand, and AI: The new world of consumer engagement” — found that hotel loyalty schemes still matter, but their perceived value is waning, with 50% of members saying that the programs no longer offer the value they once did.
The survey of 18,000 consumers in 14 countries explores how the adoption of artificial intelligence is reinventing the consumer-brand relationship across industries, including hospitality.
According to the report, younger generations (Gen Z and millennials) are 19% more likely than older generations (Gen X and baby boomers) to participate in loyalty programs but are also quicker to shift allegiance when disappointed.
These survey results echo similar findings from a Morning Consult report published last December, which found that travel loyalty programs must “do more to make members feel like valued customers,” with less than half of program members (43%) saying their loyalty program makes them feel like a valued customer. Older (35%) and wealthier (32%) travelers, in particular, are most likely to believe that the value of their loyalty programs has decreased, according to the report.
Despite this dissatisfaction, the programs are still attracting consumers. Nearly six in 10 (57%) of the participants in Accenture’s survey said they belong to hotel loyalty programs, indicating that programs remain a valuable tool to increase customer retention, drive higher lifetime value and deliver stronger brand advocacy. In fact, more than nine in 10 (92%) of loyal hotel customers have recommended their favorite hotel brand or sub-brand to someone else, the report found.
Overall, though, loyalty programs aren’t offering the perks members are looking for. The majority (89%) of hotel loyalty program members in the survey said they want to choose their own rewards, while nine in 10 luxury travelers, in particular, said they would like to shape their own experiences.
“Hotel loyalty programs still have strong pull amongst guests, especially younger generations, however they risk losing some of their appeal by not evolving beyond transactional points for perks,” Emily Weiss, senior managing director and global travel lead at Accenture, said in a statement. “While point-based loyalty programs still have their place, they need to compete with experience-led rewards that capitalize on guests’ desires for immediate satisfaction and personalization.”
Gen AI poses an opportunity
According to Accenture, generative AI has the potential to transform these lagging loyalty programs by enabling hyper-personalization and dynamic engagement.
According to the survey, hotel loyalty program members are 1.6 times as likely to use a personal AI assistant to autonomously solve their travel needs, from initial inspiration to a seamless return home.
“A growing number of brands are using AI to improve customer experience with loyalty programs. For instance, these brands are using the technology to segment customer data and use this insight to tailor offers to the individual needs of each guest to further enhance satisfaction, boost revenues and garner loyalty,” Weiss said.
With generative AI, hotels can “craft experience-led rewards that feel more personal and meaningful” than points-based rewards, Weiss said. “This can help hotels create memorable experiences, streamline operations, and strengthen guest relationships, ultimately helping to boost loyalty and repeat business.”
During a recent fireside chat hosted by Hotel Dive, Nandika Suri, vice president of loyalty, co-brand credit card and partnerships at Choice Hotels International, also emphasized the importance of offering more experiential rewards. “Loyalty is about creating brand love and deepening that emotional connection, and experiences are often the driver of why consumers are actually traveling,” she said.
