NASHVILLE, Tennessee — Without the massive scale of international brands or the ability to coax guests to return with points programs, independent hoteliers must focus on experience to build "true loyalty," according to experts.
Speaking during the "Independent and Soft Brand" panel at the 2024 spring meeting of the Hospitality Asset Managers Association, This Assembly and Practice Hospitality Founder and CEO Bashar Wali said traditional hotel loyalty programs are a misnomer.
"That is the point, and make no mistake about it," he said. "Do not call it a loyalty program. It is a bribery program, and you the owner is paying for it."
Owner's investments shouldn't be focused on redemption programs but should be used to ensure better experiences for guests on property, Wali said.
"So you either pay for those or you pay for the moments that ultimately build true loyalty," he said.
Jeff Toscano, executive vice president of luxury and lifestyle hotels at Highgate, said hotel companies should focus on creating a service culture that is "tailored, unique and sophisticated."
"It doesn't need to be overcomplicated, but very simple and really get the point across so that people will understand how they should interact with customers based on those simple things instead of this complicated 600-page [standard operating procedure] manual," he said.
Tom Luersen, president of CoralTree Hospitality, said building that culture and focusing on how to customize and personalize experience is of paramount importance but it's also "the hardest thing to train and to hire for."
"When you've got a full-service hotel that's got scale in a high-turnover, high-wage market, that's very challenging to keep people," he said. "Retention becomes very expensive."
He said solving for that problem has to be addressed "at a very individual level."
"The training is not in a classroom with 25 people," Luersen said. "Teaching and creating that behavior is like being a parent or best friend or a spouse. It's a way of creating a relationship."
Thus, it's all the more important to find the right leaders at independent properties, and general managers or managing directors of high-end independent properties have to have a "entrepreneurial approach" to the business even if they're large, established properties, Luersen said. He added independent hotels' flexibility is their biggest differentiation point from branded hotels.
"We have to hire the right organizational leaders that believe in that and then also give them room to do their own thing," he said.
When looking for inspiration for creating experiences, Wali said he largely looks outside the hotel space, particularly to retail, which is an industry that was forced to evolve in recent years due to economic realities.
"If you go into a Nike store, they don't even expect you to transact with them," he said. "What they're trying to do is build brand loyalty. So you're watching them do all these immersive experiences and activations."
Wali said companies that don't take that approach risk becoming a "commodity."
Finding a way to nail the right experience in the luxury space gives a business — whether it's retail or hotels — almost limitless rate potential, Toscano said.
"It doesn't really matter what we're charging for it as long as there's a perceived need for that product," he said. "I think in the hotel space, especially in the independent space, there's no real rate ceiling."