LOYALTY PROGRAMS IN TOURISM - HOW INFLUENCERS AND COMMUNITIES CHANGE WORD-OF-MOUTH MARKETING

Abstract

Conventional loyalty programs in the hotel industry often are outdated and should adapt to the digital age. This research shows that common loyalty programs have negative connotations, because hotel guests are inundated with them and the immediate benefits are not noticeable from the customers’ point of view. A sustainable loyalty program ideally offers playful incentives so that guests do not lose interest in it. Research found that many guests like to be part of an exclusive online community, where loyalty programs should be based on. Building a community, it is important that all stakeholders can derive added value and do not feel exploited. Moreover, empirical results show that hotel guests expect personalized incentives and offers. To provide these, tourism companies should cooperate with third-party partners. Communities on digital platforms like Instagram or Facebook can generate new guests by word of mouth, short eWOM. Experiences show that recommendations are made when expectations are exceeded: To increase this effect, incentives are still seen to be meaningful, but the nature and (digital) communication channels are changing. Social incentives, such as exclusive events, services or personal guest care, are clearly preferred instead of monetary incentives. It is also human interaction that binds guests to a hotel, which cannot be compensated by monetary incentives only. When guests are individually and immediately rewarded and when their expectations are met, word-of-mouth on social media lead to new customers. Moreover, research indicates that guests often act as micro-influencers on social media and ratings platforms. If they are convinced and find "instagrammable moments", they intrinsically report about a hotel and their services on social media. To recommend a hotel to friends, most guests do not expect anything in return, because they want to be credible and authentic.