New Survey Reveals Travelers Think Grocery Stores Offer Better Loyalty Programs Than Hotels; Airlines

aadvantage cardLoyalty has gone out the window, a new Deloitte survey finds. Only eight percent of survey respondents say that they always stay at the same hotel brand, while just 14% say they always fly the same airline.

“With heightened competition and eroding customer loyalty, hotels and airlines, now, more than ever, need to focus on enhancing and personalizing the consumer experience,” said Adam Weissenberg, vice chairman, Deloitte LLP and U.S. Travel, Hospitality and Leisure leader in a release.

Despite most hotel brands touting that loyalty and reward programs drive travel, these programs ranked low on the list of consumer influences – value and past experience were much higher priority items. That said, more than half of survey respondents (55%) ranked loyalty programs “high importance” for airlines and just under half (45%) ranked loyalty programs high importance for hotels.

Why? Perhaps it’s because travelers find that loyalty programs just don’t offer that much. Most consumers actually believe that grocery store loyalty programs offer more bang for their buck than their travel reward program of choice.

Deloitte researchers also suppose that travelers have become more pragmatic in light of the economy, seeking value for money, comfort and location when choosing a hotel, while on-time arrivals and departures, safety and value for money are the most important factors for choosing an airline. One thing is for sure – value rules. In this vein, half of survey respondents (49%) said that they have used flash sale sites, although most admit to booking directly (61% for hotel; 59% for air travel).

What does this mean for the consumer? Not much – yet. But it doesn’t bode well for the travel industry. Brands wanting to up their loyalty membership engagement should focus on those things that really matter to the traveler – experience and value – rather than perks that sound good on paper but offer no real benefit.

The web-based survey was commissioned by Deloitte and polled 4,000 hotel and airline customers, based on hotel stay and/or airline travel during the past 12 months.

[Image Credit: American Airlines]

Deloitte business travel survey shows growth in corporate travel; split between generational preferences

business travelDeloitte’s new business travel survey for 2012 predicts an uptick in travel, particularly among Millennial and Gen X workers. Notably, the survey also showed a growing divide between the preferences of the younger (18-44) travelers and the 45+ demographic.

“Corporate travel plays a key role in driving growth for the travel industry as a whole,” said Adam Weissenberg, vice chairman, Deloitte LLP and global travel, hospitality and leisure sector leader. “The results of our survey offer an encouraging sign for hotels, airlines and other service-providers.”

Who Is Traveling
“The outlook for next year is relatively positive, which surprised me,” said Weissenberg. Of the 19 percent of business travelers who expect less travel in 2011, more than six of 10 (64 percent) cite the recession as the primary reason, and 14 percent say a job change. The survey particularly shows optimism in terms of younger workers, he noted.

Specifically, 85 percent of business travelers surveyed expect to take more or the same number of trips next year with 27 percent of 18-44 year olds expecting to take more trips in 2012, while only 16 percent of business travelers 45 years old and above are planning to take more trips next year.

Moreover, reflecting on 2011 travel activity, the majority of survey respondents (81 percent) anticipate taking more or the same number of business trips than they did in 2010.

Generation Gap May Define Hotel Preferences
The majority of business travelers surveyed feel experiences at hotels operating under the same brand name differ depending on location, with six in 10 (60 percent) noting that facilities and service quality vary widely.

However, when looking at perceptions around hotel consistency among different age groups, 49 percent of respondents aged 30 and older believe hotel brands are inconsistent whereas only 39 percent of those ages 18-29 indicate the same. When considering loyalty, nearly half (46 percent) of the 18-29 year olds say they prefer to stay at their favorite hotel brand even if it is not conveniently located, whereas 37 percent of those 30 and older do the same.

“While it’s important for hotels to focus on the burgeoning number of young business travelers, finding a middle ground to retain brand loyalty among Generation X and Y, and boosting brand loyalty among the potentially more discerning baby boomers, will likely be a challenge for hotels in 2012,” continued Weissenberg.

[Flickr via RegusMedia]
Younger Travelers Crave Social Work Spaces & Automation
Two-thirds of respondents (67 percent) say they often work in their hotel room, with younger business travelers enjoying working in more social spaces, such as executive/business lounges and the lobby or common area.

Many hotels have done a good job evolving these lobbies from the stuffy and uncomfortable marble spaces of yore, Weissenberg said, noting that the biggest point of contention amongst travelers, particularly younger ones, is the lack of free internet in some hotels.

As a whole, 77 percent of business travelers surveyed indicated that complimentary internet is important to them, and 63 percent are satisfied with the availability of free Wi-Fi in hotels.
Nearly two-fifths (36 percent) of the 18-44 year olds surveyed say they often work in the lobby or common area, while only 17 percent of those 45 and older do the same. When it comes to interacting with hotel staff for check-in, almost two-fifths (36 percent) of the 18-44 respondents favor automated kiosks rather than checking in with a hotel employee at the front desk, whereas only 19 percent of the 45 and older survey participants say they prefer automated kiosks.

In next year’s survey, Weissenberg said that the company will likely further break down the age bands to better target generational preferences. “It’s becoming more drastic in terms of what baby boomers are looking for versus Gen X and Gen Y,” he said.

Travelers Prioritize Amenities and Efficiencies
Amenities continue to play a key role in the overall hotel experience, with six in 10 respondents (61 percent) expecting more from hotels with regards to amenities and services now that hotel prices have increased.

The survey also found that concerns around air travel are important, with survey respondents listing flight delays (37 percent) and security-related delays (30 percent) at airports as the leading grievances about business travel today. Additionally, respondents indicate that issues with air travel are more of a concern than hotel challenges, such as inattentive staff and lack of amenities at hotels.

The survey was commissioned by Deloitte and conducted online by an independent research company between September 26 and September 27, 2011.

Slight uptick predicted in Memorial Day travel

Memorial DayPlanning on hitting the road for Memorial Day? So are just under one in four Americans. A new survey from Deloitte predicts that 22% of Americans will travel over Memorial Day, up from the 19% who traveled in 2010.

As for the remainder of the summer months, nearly half (45%) of the survey respondents expect to take a trip between June 1 and Labor Day, which is relatively flat compared with those who traveled a year ago (46%). Furthermore, this year nearly one-third (30%) of the expected travelers plan to spend more money on this year’s summer trips than they did last year, while two in five (41%) plan to spend the same amount.

“Although industry data show overall levels of leisure travel are still below levels seen prior to the recession, our latest survey indicates that in 2011, consumers are more willing to spend on summer trips than last year,” said Adam Weissenberg, Deloitte’s U.S. tourism, hospitality and leisure sector leader.

[Flickr via ]

What might prevent people from traveling?

More than one-quarter (27%) cite lingering financial concerns while 18% point to high gas prices – a number that almost doubled from last year’s survey (10%). Higher fuel prices are not only prompting some would-be travelers to cancel their trips, but are also leading almost six out of 10 Memorial Day weekend travelers to modify or scale down their plans to offset the increased gas expense.

Concerns surrounding air travel also have some consumers altering their vacation plans, though most are not canceling plans altogether. Among the 67% of respondents who say they’ve noticed an increase in airline fees, only 14 percent have changed their summer travel destination or canceled their summer flight altogether. Additionally, more than one-quarter (26%) of survey respondents are looking into alternative means of travel other than flying due to higher airfares, additional airline or government fees, and/or security issues at airports.

“With additional costs hitting consumers in the air and at the pump, leisure travelers have no choice but to allocate additional funds towards transportation,” added Weissenberg. “In turn, they are looking to cut costs in other areas by choosing a vacation spot closer to home or curtailing spending on food and local activities.”

What about you – will you be cutting back or hitting the road this Memorial Day?

Hotels gearing up for battle over the business traveler’s wallet

Hotels gearing up for battle over the business traveler's walletNow that business travelers are coming back into the travel market, everyone can’t stop talking about it. Of course, this is great news for airlines and hotels, as business travelers tend to spend more time on the road, have more financial flexibility and are willing to pay more for exactly the flights and locations they need. The occasional leisure traveler who hunts around for bargains, quite simply, doesn’t have the big cash.

So, it comes as no surprise at all that hotels are getting ready to welcome the business travelers back into the fold. It’s been lonely without these guys for the past two years, I suspect, especially with the budgets they command. And make no mistake about it: though they aren’t actually paying the tab, road warriors do have at least some choice in which hotels and airlines they choose.

Think about a frequent business traveler who spends three nights a week in hotel rooms for 40 weeks a year (it’s not as rare as you think). That’s 120 room-nights. At $200 a night (not unusual for business-friendly hotels in big cities), you’re looking at $24,000 per business traveler per year. That’s a hell of a lot more than a leisure traveler who spends nine nights a year in a hotel and is more price conscious … which could yield less than 10 percent of what one frequent business traveler brings to the table.

What do business travelers want? Obviously, a lot.Last month, I wrote about the findings of a recent Deloitte survey, which found that road warriors (such as those employed by Deloitte itself) want a lot more than a clean room. Work-friendly conditions, in fact, are at the top of the list. The memory of this from my white-collar travel days has not escaped me. I remember setting up my “office” in the room immediately after check-in, and that’s where I spent most of my in-room time during each stay (with crazy business schedules, the bed doesn’t get much use).

According to an article on MSNBC, I’m not alone. For example:

“I try to replicate what’s in my office” said Denis Lacerda, a partner for Rafael Cennamo, a fashion house, who commutes regularly between São Paulo, New York and Miami. Lacerda is currently a guest at the AKA Central Park, an extended-stay hotel that he says provides everything from office supplies and a printer/fax/copy machine to high-speed Internet and access to business TV channels. “All the important things you don’t think about but need to have,” he said.

Why is this so important? Well, back in my consulting days, it wasn’t unusual to put in an 80- or 90-hour work week, much of it coming on the road. You need to know you’ll be comfortable (to the extent possible) while pushing through an insane workload. We’re looking for all kinds of stuff – that hotels are adding – including “bigger desks, better lighting, more outlets and ergonomically correct chairs.”

The eagerness to please business travelers has risen to incredible levels, MSNBC continues:

“It’s a little bit of an arms race,” said Jan Freitag, vice president of global development for STR, a hotel research company. He compares it to when Westin’s “Heavenly Bed” was introduced. “People laughed,” he said, “but there was buzz. Everybody wanted them. Suddenly, it was ‘the Bed Wars.’ “

The needs of business travelers have been exacerbated by technology advancements. With the ubiquity of high-speed internet access and mobile devices, the workday doesn’t end shortly after the sun sets … and in some cases, it can last until shortly before it rises. MSNBC adds:

“With the Internet, e-mail, and cell phone, communication never stops,” said Bruce Ross, chief executive of Celebrity Fashion Group, a private label merchandising company. “You’ve got to work twice as hard today.”

In many cases, the in-room conveniences that this class of traveler wants is a tool in helping them to survive the quickening pace of business rather than merely stay in front of it.

Hotels, hungry for additional revenue and the lower sales costs associated with repeat guests, are investing in improving the business traveler experience, as it will be a critical factor in which brand takes the lead in the coming travel market recovery. The road warrior is coming back, and the hotels are waiting.

So, business travelers, what do you like in a hotel room? Leave a comment below to let us know!

Business travelers want mobile, Expedia picks up Mobiata

I guess Expedia is watching the market. The online travel agency just snapped up mobile travel application developer Mobiata. Mobiata’s claim to fame is FlightTrack, and the other apps in its portfolio include TripDeck, HotelPal, FlightBoard and FareCompare. For Expedia, it was a no-brainer, as 4 percent of its traffic is coming from devices, a number the company would like to kick a bit higher, according to TechCrunch.

Beyond the fact that it gets more reach and better footing in the mobile space, Expedia’s Mobiata acquisition is interesting in light of a recent Deloitte survey. Business travelers are increasingly turning to their smartphones to research and book travel. The global professional services firm reported that 63 percent of business travelers earning more than $150,000 a year have web-enabled smartphones. Twenty-six percent of survey respondents, Deloitte said, have even downloaded hotel apps to these devices.

Given this trend in business travel, an important market for the travel industry, Expedia’s pickup makes good sense. The big question: who’s next?

[photo by Ed Yourdon via Flickr]