‘AI has become business critical’

AI aligned with loyalty is now essential to hotel operations, attendees of the latest HOSPA webinar, Beyond the Free Night: How AI is Forging the Future of Hotel Guest Loyalty, in partnership with Global Payments, heard.

Ruben Recio, VP of Sales·EMEA and APAC Como (A Global Payments Company), said: “The hotel section is undergoing one of the most significant changes we have ever seen. Loyalty used to be seen as marketing, but now loyalty programmes are the connective tissues between guests and brands. They allow hotels to differentiate themselves in ways that go beyond room rates and amenities. The shift is clear; loyalty is no longer optional, it is a core capability that allows the brands to compete for the modern traveller.

“The [major hotel] brands get 50% of their revenue from loyalty members. Members book more frequently, stay longer and contribute more to direct bookings and revenue. Loyalty members drive the financial engine that powers modern hospitality. Loyalty programmes have evolved into true revenue strategy engines. They operate as sophisticated commercial platforms, with cobranded credit cards and helping to target the right person at the right moment. They provide data to help shape commercial strategy. They unlock new ways to deepen engagement. Loyalty is about building a broader ecosystem that supports the guest behind their stay.

“Loyalty is one of the most powerful tools to strengthen their brand and build long-term relationships. It is a strategic imperative and the brands who will win while leveraging loyalty as a platform for sustainable growth.”

Jon Davis, CTO, Village Hotels, discussed the group’s application of AI to drive loyalty, adding: “We’re not just about beds, we are also about experience, we have gyms and golf, we’re a community hub and it’s how to bring that all together in loyalty. How do we extend beyond the bedroom, how do we understand the guests and find out what matters to them most? We focus on removing friction to ensure our platforms are quick and intuitive. It’s about pairing that with our teams and their warmth and creating that long-term relationship, to drive that true loyalty across all our areas.

“We have put a lot of focus on understanding the customer and meeting their expectations, which means we have a more sophisticated segmentation model. So we have leisure members, golf members, NHS members and F&B members. It’s important that these segments have instant rewards. It’s not the accumulation of points; simply by belonging to that membership they get  rewards immediately and we’re looking at getting those rewards where customers interact every day. It all comes back to the data and we’ve done a lot of work taking those silos of information and creating that customer profile.

“It’s equally important that, if you’re coming once or twice a month and have a coffee, that you are recognised and rewarded. If you give customers the right value at the right moment, loyalty goes up.”

Recio responded: “When we talk about loyalty it is very easy to talk abut points and rewards, but it is shaped by the experiences that we create and the emotions we evoke, it’s about making people feel understood, valued and confident that they’re in the right place. It could be a personal touch that shows we really see our customers. Real loyalty is deeply human. We’re not just earning points and tiers, we’re earning loyalty.

“When we remove fiction, we remove reasons for customers to look elsewhere. Value is not just abut points, it’s about customers believing they’re getting more. Trust and reliability is important, consistency builds confidence and that keeps customers coming back. Guests need to feel seen, understood and remembered, which is stronger that any discount or promotion. Recognition is the final element; people stay where they feel appreciated.

“We’ve seen growing demand for instant value, instant savings. People want value that they can feel right away and when a programme can deliver that, engagement improves straight away. Customers now expect hyper personalisation, which goes far beyond using someone’s name on an email. When done well, it makes customers feel understood. Modern consumers don’t want isolated perks at the side of everyday life, they want loyalty that feels like an ecosystem. The opportunity to brands is to bring these rewards together and integrate them into their daily lives, such as we see in the partnership between Marriott Bonvoy and Nectar.:

Looking at AI, Recio said: “When we talk about personalisation and AI it is in terms of RFM:  Recency, Frequency, and Monetary. AI places customers into segments and constantly adapts based on the data - and customers are moving in and out of segments constantly. AI looks at patterns, to understand behaviour. We also have automated follow ups and AI makes them smarter and more tailored. We also have AI-driven campaigns aided by an AI assistant, which takes into account frequency and average spend.”

Davis concluded: “What we’re seeing with AI is that it’s starting to become business critical. It has been bringing in customers that we wouldn’t have seen and it drives incremental revenue as the weeks pass and it increases as the system keeps learning. We’re finally seeing the green shoots of AI.”