Here's an academic treatise on loyalty, one in a series of reports from Cornell University's Hotel School.
"What we found is that the frequent guests became even more frequent after they joined the program, and the result was a 50-percent increase in revenue compared to those who did not join the program," said Voorhees, an associate professor at Michigan State University. "It's important to note that these guests are already some of the hotels' best customers, so the program is not only attracting the best subset of customers, but also fundamentally increasing their patronage too after they join."
Worth a read, for sure.
Anadyr: thanks and just proves what we all know. Now Maybe (but I am not holding my breath,that is just self defeating) Marriott management will listen and stop disenfranching us, the loyal life time butt in bed members, to chase the millenials who dont command the wallet power we do and are not nearly as loyal. Marriott has probaly lost $20K since December in my business spend (and for those who I direct) and that will continue as my form of protest. I can oly vote with my $$$ and that is what I am doing.
Excellent post stelzer001,
The millenials for the most part do not have the wallet power as you say, nor do most know how to use what they have yet there as some exceptions such as kharada46 and a few like him. Most millenials I know and took traveling with me when I worked did not understand the loyalty programs or didn't care to be part of them, simply put they were like cows wandering around the field seeking some hay to be tossed from the truck for free.
Not sure a company can give that order, not to participate in a loyalty program. Not sure how they would even know if you show your card when you check in.
I know some government agencies *require* their employees to use loyalty programs then turn the benefits (upgrade coupons, award tickets, etc.) over to the government to use.
The IRS keeps threatening to start taxing FF miles. I expect hotel points won't be far behind.
Mine was a USG rule. We could not really accumulate FF miles, but as long as we never sat in First Class on purpose we could be upgraded there, based on the status of the flier we were (go figure). So as a 1K, my miles and points went to Uncle Sam, but my upgrades went to me.
The U.S. Government Agency I worked for did allow us to keep all of our loyalty program points/miles, so not sure your statement is totally correct. I never turned over a single upgrade to them nor did the ask. The only time I got even questioned was when the airline receipt showed me in First Class yet having paid the for the full fare coach ticket and was upgraded upon purchase. That was easily explained away in about 10 seconds when I told them as a 1K that was an automatic upgrade.
I agree. Loyalty is not a priority with millennials. They are not staying in the same job and they are switching companies (even careers) at a fast rate. It is going to be a hard group for Marriott to target. They might be better off focusing their efforts on lower hanging fruit.
Well said! What everyone else is saying is true... but what you say is also true. There are those of us that are smart enough to take advantage of loyalty programs, though few... I'm trying to get more of my peers involved, though it's hard to convince them that sometimes spending a little more for loyalty is better than always chasing the lowest rate!
Funny, though... I know quite a few boomers & Gen Xers that think I'm insane for doing what I do.... some even think I'm pretentious... haha
I've worked with a lot of people in their 20s that travel to LA from Chicago/New York on a weekly basis. Most of them use Starwood. For airlines, a lot of them prefer Virgin (even if they have to split their miles with another airline since Virgin still has limited routes) and Southwest. I can understand why Marriott is going after them because they will make up a significant amount of travel business 20-30 years from now. The millennial issue is not exclusive to Marriott though--millennials prefer the Capital One Venture credit card vs. a Delta credit card, Marriott one, SPG one, etc.
That being said, these millennial heavy business travelers might be a small % of 20-29 years olds in the country. With Expedia, Travelocity, Priceline, etc., a lot of millennials' first choice is not their preferred brand when on personal travel, which might be why many don't even have a preferred brand. They are looking for cheapest price and best opportunity for a luxurious room (I've used Priceline and those other bid sites in the past though...they are a gamble even when you think you have a good shot of getting that 4-star / 5-star hotel you really want).
I can confirm this marriottmemberfromla. Many of my peers are this way. Always chasing the lowest price, the best deal. I, however, have been an AAdvantage member since 1999... let's just say I'm in my mid to late 20's now. From there, I decided to join Marriott when I started traveling on my own.
Kharada46 and Marriottmemberfromla: At my company (we are not the USG), we auto enroll new joiners in *wood, Marriott and Hyatt, as well as DL, AA and UA so that when they travel, they have an account and can decide what is best for them (and we all book thru a central Internet secure travel site for our company). I can tell you that many of the 21, 22, 23 year olds (and some a few years older), dont shop by price, even when doing personal travel, they shop by convenience factor, like home airport and destination airport, how close is hotel to work site, or personal event site, etc. Loyalty is not really there for them, as much as convenience is. They dont have the life learning or background to understand loyalty and (pardon my finance analogy) compound interest. What I mean is that if we dont force them into the 401(k) and related other retirement plans (and believe it or not, we have to force them into healthcare plans, since they are young and dont see the need to pay health insurance, even tho my Company subsidizes over 75% of the premium) then they wouldn't save $$ for later on in life, and wouldnt earn any returns for the future. I see loyalty programs much the same, as a traveler, you bank and build until you can have enough to use for whatever. Having said this, the millennial crowd doesnt seem as patient as those of us who are (ahem) over 40 who have learned that you need to start somewhere, save as you can, then use the (insert money or loyalty points) for a desired or needed trip. The millennials I work with seem to feel that it isnt worth saving, that (for the most part) they will either a) get an inheritance, b) get a big bonus or stock option windfall, c) win the lottery, or d) the government will ensure their security in old age, and most have a view of a combination of factors that will take them where they need to be when they retire. The insidious downside of everyone gets a trophy is that these kids (sorry, when you get to be my age, you are kids) expect instant gratification, and dont see why they need to "save" for the long term. And to Kharada46, kudos to you for being in a loyalty program from a young age, you seem to be the exception to what I am saying. I teach my children to save for the long term (as well as to give to charity in a meaningful way), and they each have airline accounts which they use to build and fly themselves places. They marvel at how much forethought I had to set these up, pay for tickets, get them bonuses, and build up balances they can use. So, why the rant and the like? I see Millenarians every day, they work for me, and all I share is what I see, what comes up in conversations with them over shared meals, and how they view life. They seem to think I am "lucky" because of the fact I have worked hard, built some good retirement and loyalty balances, and that I was in the right place at the right time. While I am older and have worked longer, I have been a diligent saver, a long term thinker and planner, and didnt live like many of my peers, that is, I lived within my means, didnt go borrow like crazy, didnt (and dont) carry any debt other than a home mortgage. My message is simple, think over long horizons, leverage every $ you spend to get the best deal and the future benefit (like loyalty points), and dont touch balances unless there is an extreme emergency. If we could get Millennials to think like this, we would have a fantastic savings rate, wouldnt expect the USG to do things for us, now or later in life, and we would be a financial powerhouse in the world. Sadly, the USA isnt one anymore, and the state of the population is to want more from the USG (and State and local), and for one, being a taxpayer, I start to resent the wealth transfer as I work darn hard and have been doing so for over 30 years, and to take more of what I have saved (i.e., Marriott, you are a taker as well, since you devalue points I earned and banked) is just not fair or proper. Living in Belize in retirement is starting to sound awfully good.
Maybe price is not the right word but value/deal for what they are paying (for this, I am talking about personal travel and not business travel). I think people read price and think that means millennials would be staying at the Motel 6 and saving all of their money. It is more about getting the deal, which is why sites such as Groupon, Amazon (especially Amazon Prime), Expedia, etc. are so popular with millennials. The deal becomes less of a deal though when you get addicted to the spending...millennials are traveling on personal trips at a much younger age than previous generations...they are also purchasing (actually leasing) luxury automobiles at a much younger age...maybe it is not spending wisely or saving much, but it is what is.
I book through Marriott.com. It is good because it is the lowest "advertised" price and you get points. However, it is not the cheapest rate out there. If you book/bid through Priceline or some other online site, you are going to get a better price (especially if you are booking last minute). Many millennials would think: "Why book through the hotel website? You could get a much better hotel for your money elsewhere."
Convenience is a factor too, but I think that applies more to airlines than hotels for millennials. If you asked 100 millennials if they could stay at the Marriott across the street from the event they are attending or at the W several miles away at the same rate...most will take the W and pay the cab fare. Same in Vegas...the event at is at the Mandalay Bay Convention Center, but The hotel at Mandalay Bay is booked...and they have the option of Mandalay Bay, Four Seasons at Mandalay Bay or The Cosmopolitan...most millennials would take The Cosmopolitan.
For airlines though, convenience is a big factor...right time and a direct flight. That is why the Capital One Venture credit card is so popular...I can use the miles for the direct flight at the time I want as opposed to be forced to go with a preferred airline. However, Virgin does appeal millennials because of its youthful feel and Southwest appeals because of its unique benefits--free checked bag and then the companion pass for their elites.
bpelican: thanks. I am so tired of all of the travel companies trying to cater to those witout a wallet or means. I have never used priceline and probably never will. If I wanted the leftovers, I would go to the macy's outlet to get last season's look, which is the way I see priceline as it gives you (in its classic model) little choice over carrier or time, so I fail to see how this fits the convenience factor so many Millenails seem to desire. As to an airline like virgin seeming as "hip" or youth oriented, this too (like a kidney stone) shall pass, as youth cant hang on forever, and the model of catering to youth lasts maybe 10 years until the next generation comes around. Look at how long in the tooth some of the W hotels seem, and even the millenials I work with seem to be tired of the wierdly set up rooms, the sharp angles, etc. and now want more creature comforts, and a less edgy feel. So, my message to Marriott is go ahead, chase those Millenails, they have little to no loyalty to you or your brand, they will desert you once the shiny new feel goes away (and it will), and all you will have is the old geezers like me who are spending down our point balances.
Us "old geezers" sure think alike, stelzer001. Never have used Priceline, nor will I ever use them. I'll take an "old" recently renovated full service Marriott anytime even if it costs me an extra few bucks. Moreover, I'll usually spend a good bit in the full service Marriott restaurant(s) in addition to spending down my points.
anadyr: yup, geezer I am and I am still on my first wife. No need for a trophy wife, I married right the first and only time. Your Fried Green Tomato analogy made me laugh out loud, thanks, I needed that. I dont chase youth, dont long to be young (although according to my wife, I sure do act like a 3 year old) and just try to enjoy life every day. Let Marriott chase the Millennials, and when the leave, we will still be here!
I have no doubt that Marriott is fishing for customers of all ages, and bully for them, but don't forget us ancients, the ones who saved the world, brought down the wall in Berlin, and of course, allowed the British Invasion to occur uncontested. As a friend in the music business always says, All We Need is Love, or something like that.
The revenge, be it ever so sweet, is that the Millennials will be replaced by the whatever-they -are-called group that follows, and the new group will find the Millennials irrelevant and out of step with the newest thing.
The W in LA does get bad reviews on TripAdvisor; however, it still attracts a lot of youth. I think your point about trying to chase youth means you will always have to chase what's new is very true. Millennials are even giving up on Facebook to pursue other sites, apps, etc.
I'm not sure what Marriott's millennial strategy is...I guess mobile check-in is one of their efforts...though I haven't used it yet. I personally think mobile check-in (in its current design) provides only a small value.
I imagine their other strategy is making the public areas more lively. I'm okay with that. Marriott bathrooms and bedrooms need the most work though.