How hotels can rebuild customer loyalty

By Danielle Harvey

Once considered the budget-friendly options for travelers, the rising costs and unexpected fees associated with vacation rental sites like Airbnb and Vrbo have pushed travelers away—and now they’re returning to hotels.

For travel and hospitality brands, now’s the time to take advantage and enhance the customer’s experience, both in person and digitally, to lock in the loyalty of travelers seeking places to stay. So, how can they enhance their customer experiences to foster loyalty and retention?

It all starts with the digital journey.

Focus on the first steps of the travel funnel

As travelers seek out alternatives to Airbnb and Vrbo, travel and hospitality brands have the opportunity to attract new customers and build loyalty retention through digital channels. To do so, they’ll need to understand why travelers choose to stay in vacation rentals like Airbnb and Vrbo in the first place.

The first reason travelers favor vacation rentals is obvious: the amenities. More often than not, vacation rentals guarantee guest access to conveniences like a kitchen and washer/dryer on-site–must-haves for long-term stays for families or groups.

Second is the search and trip planning experience that vacation rental sites provide. For example, last year, Airbnb gave customers the ability to search by categories like “Lakefront,” “Amazing Pools,” and even “OMG!” to inspire vacation ideas and allow travelers to discover new destinations.

So, where can brands not only highlight the advantages of a hotel stay but take a page from Airbnb’s playbook and bring this kind of magic to their digital experience and inspire more travelers to book with them?

Consider how to facilitate a better search experience, letting travelers explore the vast options available and enable them to search by location, property, and amenities as well as the ability to book connecting hotel rooms to make family and group travel easier. Highlight nearby conveniences and the types of amenities Airbnbs and Vrbos don’t offer, like a pool, gym, spa, parking and restaurants or bars on-site.

Hotel brands should also consider how they can leverage generative AI to better engage customers earlier in the travel buying journey. Online travel agencies have typically dominated the top of the funnel in the past, and today have started to embrace AI tools like ChatGPT to further their ease of use. Hotel brands have an opportunity to also incorporate AI to scale their content generation and become a helpful resource for travelers earlier in the trip-planning process when they’re still researching ideas and options. That way, they can become the place where travelers go for inspiration, not just where they stay.

Outside of search and trip planning, hotels have another advantage over vacation rentals they can lean on in their digital strategy, and that’s the consistency they provide. When travelers book a hotel, what they see is what they get, making hotel stays a safer bet with no surprises.

Leveraging data to take the traveler’s experience to the next level

As the majority of today’s travelers prefer to book and manage their stays through online channels, a hotel brand’s direct digital presence has never been more important. And the best way to improve it is by understanding customer data and leveraging it to enhance the traveler’s digital experience.

But what are the most important data points and metrics travel brands should pay attention to?

To understand the purpose and motivation behind the traveler’s booking, explore all the data available, whether explicit or implicit, like voice of customer (VoC) feedback or attributes of their search (e.g., the number of rooms/guests being searched for, weekend vs. weekday check-in).

Using digital tools and platforms to cut through the data noise and uncover insights into the traveler’s journey will also make it easier for travel and hospitality brands to understand how to cater to each customer segment.

For example, suppose a hotel wanted to see how loyal guests and newly acquired customers respond to different touch points throughout the digital journey. In that case, they could segment the two groups to see differences in behavior and optimize the funnel based on their findings.

Creating exceptional experiences will build long-lasting loyalty

While the outlook for hotels is promising as enthusiasm for vacation rentals wavers, travel and hospitality brands must be impactful when approaching new and existing customers to make a true comeback, especially as they try to build and lock in loyalty.

But how can they keep guests coming back? By embracing digital as a critical part of the traveler’s journey, prioritizing digital initiatives, and leveraging data to inform future customer experiences. Doing so will ensure the best end-to-end experience for the traveler and help travel brands succeed long-term.

Danielle Harvey is VP, travel and hospitality strategy at Quantum Metric. She provides expertise that helps airlines, hotels and other travel providers optimize the digital customer experience. She has 15 years of experience as a practitioner in the travel industry, having spent 11 years with Wyndham Hotels and Resorts and four years with Avis Budget Group. 

This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.