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Study examines why Millennials choose loyalty programs

Two-thirds (66%) of Millennial high-frequency travelers rate “unique rewards” as an important factor when choosing a hotel loyalty program, compared with just 43% of their older counterparts, according to a new Deloitte study, Winning the Race for Guest Loyalty.

Three-quarters of Millennial respondents also indicate they would remain loyal to a hotel brand even if they lost all their points and status, compared with 66% among other travelers.

Additionally, the types of program benefits Millennial travelers expect are no longer solely points-focused. Overall, 68% of frequent travelers indicate they consider themselves loyal to the program where they have accumulated the most points. However, Millennials highly value “soft” benefits such as VIP treatments and exclusive experiences more than other groups. Two-thirds (66%) of Millennials indicate unique experiences matter, compared with 50% of frequent travelers in other age groups.

The study revealed that once customers establish allegiance to one brand loyalty program, they will go out of their way to patronize that brand, and Millennials are most likely to do so. Millennials indicate they would pay US$41 more per night and travel up to 15 minutes out of their way to stay with their preferred brand, compared with business travelers in other age groups, who are willing to pay an extra US$29. This behavior spills into leisure travel, where Millennial travelers would pay up to US$35 more per night to stay with their chosen brand, compared with US$20 among non-Millennials.

“The race is on for brands to provide swift gratification, particularly for the savvy Millennial travelers, who are quick to share their positive experiences or broadcast their discontent over their social networks, and who are acutely aware of the rewards that come to loyal customers,” said Guy Langford, vice chairman, Deloitte LLP and U.S. Travel, Hospitality and Leisure practice leader. “The brand that locks in the customer’s loyalty first and wins that race is the brand that wins that customer, and potentially their loyalty, for life.”

The survey was commissioned by Deloitte and conducted online by an independent research organization over an eight-week period in early 2014. The survey polled 3,001 high-frequency U.S. travelers, defined as individuals who spent more than 25 nights in a hotel in 12 months prior to taking the survey.

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