Loyalty, Brand Preference and the Economy Segment Traveler
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To ready the discussion for Portada Miami, Portada's Chair of the Travel Marketing Board Trip Barret wrote the article below on Loyalty, Brand Preference, and the Economy Segment Traveler
What: With the tremendous growth of economy segment hotels and low-cost air carriers, hotel and travel companies as well as the airlines, have begun to take notice and adapt to this expanding segment of travelers.
Why it matters: To ensure that their brands stand out and become the best choice for these travelers, players in the travel industry are delving deeper into loyalty, personalization and brand preference in the economy travel segment.
A few weeks ago I traveled to Santiago, Chile. There was nothing unusual about the planning and preparation, packing and arranging after work meetings with friends, except for one thing: the gnawing sense of anxiety created by an impending unknown experience: the first time flying coach and staying at a Novotel, instead of one of my favorite (formerly) Starwood Properties! The client I would be meeting with had taken care of the arrangements and through their agency had booked me on LATAM (fortunately in one of the “Space +” seats in economy) and at the Novotel (my first experience in an Accor Hotel since staying at an Ibis property in Prague when backpacking through Europe many years ago).
Trip Personas and Travel Behaviors
Most frequent travelers have more than one “trip persona” and depending on the circumstances or purpose of the trip, their needs and expectations vary accordingly. A business traveler's needs and expectations differ from their leisure travel needs, which will differ even further depending on the circumstance (traveling single, as a couple, with the family; on a high adventure trip, resort/relaxation get-away, etc.) A few years ago, SITA, an air-transport communications and IT-solutions company, published the results from a survey indicating four types of travelers (to matrix even further one’s “trip persona”): 1) The Careful Planner wants to ensure nothing goes wrong (which can cause stress and anxiety), 2) The Independent and Hyper-Connected Traveler values efficiency and wants to be in control (but is less passionate about the actual travel), 3) The Pampered Traveler is used to the ‘status’ and perks associated with Five Star travel options, and 4) The Open-Minded Traveler is more interested in the destination or experience, and less on the ‘status’ aspects of the trip.
Given that I was traveling for Business (travel persona thus defined) I then had to fine-tune my travel behavior (flying economy does that) and so settled into the “Independent Traveler” mode. The flight would matter if it was on time, I would be able to get some work done, and most importantly I would be able to sleep (as much as you can with a 4" recline and 34” pitch); and the hotel if I was able to reserve early check-in, it offered fast WiFi, great breakfasts, a gym, and a comfortable bed.
Revisiting the 5 Human Truths… Are They Applicable to the Economy Travel Segment?
Over the last several years, leading-brand companies have developed strategies to better align their positioning and product delivery experience to build and strengthen the loyalty of their users. Starwood Hotels & Resorts rolled out “The 5 Human Truths” to connect more strongly with their guests through their individualized Lifestyle Brands as well as the provided services: 1) We need to be understood; 2) We want to belong; 3) We long to feel special; 4) We crave more control over our lives; and 5) We dream of reaching our potential. All this served as the basis for how Starwood communicated and interacted with its guests and clients. While emphasis on this theme was unique to Starwood, whose brands focused on more of the higher-end traveler, the concepts within the five truths are not unique or proprietary (and can be applied by all companies, especially those in the Travel and Hospitality Industries, across all segments from Budget to Luxury).
[The midscale and economy business are] getting tremendous attention right now because that's where the growth is.
In a recent interview discussing the acquisition of the La Quinta brand and its 890-hotel portfolio, Jeff Ballotti spoke of Wyndham’s pursuit of growth in the midscale and economy business, which Ballotti said is “getting tremendous attention right now… because that’s where the growth is. It’s an area of the market that, if we could elevate the experience, has tremendous growth potential.”
The increasing importance of the economy travel segment has also not been lost on Peter Fankhauser, CEO of Thomas Cook Travel, with new efforts and strategies focusing specifically on group travel and mass tourism. “We decided to individualize the mass market. Every customer is treated as an individual. If (they) have a problem in the first 24 hours of (their) trip, we’ll solve it…We’ve also added services like choosing your room in advance”. These new efforts are designed to allow the customer preferences to be more at the forefront, which in turn will create more satisfied and loyal customers.
There are several opportunities for brands to make a connection and develop or deepen a long-term relationship with customers— no matter what category of travel is selected.
By focusing more on the experience of each individual, both Wyndham and Thomas Cook are making concerted efforts to grow their business and are taking cues from the 5 Human Truths in helping their customers feel more understood, special and equally importantly, giving them control over their travel.
The Airlines are also paying more attention to this segment, especially as the Legacy carriers face Low-Cost Competitors flying the latest Boeing 787s, 737s, and Airbus A330’s and 350’s. As a result, most are introducing Basic Economy fares to give travelers more options (and to maintain their loyalty). Virgin Atlantic CEO Craig Kreeger gave the introduction a great marketing spin: “We’re unveiling the biggest change to our Economy cabin in over a decade— launching three new ways to fly, and a host of innovations on the ground and in the air as part of a wider £300 million investment in our customers. We know that one size doesn’t fit all… our customers can afford to be choosy…We always want flying with Virgin Atlantic to be more special than other airlines, and we’ll never compromise on excellent service, industry-leading food and drink and cutting-edge in-flight entertainment— regardless of which Economy ticket our customers are traveling on, they’ll be able to enjoy all this onboard.”
The concepts behind the 5 Human Truths are relevant and easily applied to the growing economy travel segment (which I witnessed first-hand during my recent trip to Chile). Whether it’s the first contact via the brand app, the cheerful and attentive smile of a flight attendant, the ability to stay connected throughout the journey, or the front desk associate offering suggestions of where to take in the best local cuisine, there are several opportunities for brands to make a connection and develop or deepen a long-term relationship with customers—no matter what category of travel is selected.
Trip Barrett is head of Travel Marketing Content and chairs the Portada's Travel Marketing Board, including top-notch executives from the Travel Industry like Jennifer Adams [MD-Integrated Marketing, American Airlines], Ricardo Casco[Global Sales & Integrated Marketing, Avis Budget Group], Pablo Chiozza [SVP USA, Canada & Caribbean, Latam Airlines], Alan Duggan [Regional VP Business Development, The Americas, Meliá Hotels], Roberto Muñoz [VP, Strategic Partnerships & Loyalty, Aeromexico], José Luis Pérez [Head, Marketing Performance, Volaris] , Luis Perillo [VP, Sales & Marketing, Caribbean & Latin America, Hilton], Ángel de la Tijera [Top Accounts Commercial Head Mexico & Latin America, American Express], and Alvaro Valeriani [Regional Vice President Sales & Marketing Latin America & Caribbean, Hyatt Hotels]. This board, as well as the other Portada councils, will meet at PORTADA MIAMI, on 18-19 April. Click here to save your spot!