Expedia Group is a travel technology company that provides travel fare aggregators and travel metasearch engines through its numerous websites. These include, among others, carrentals.com, cheaptickets.com, expedia.com, and hotels.com. In total, the company offers over 200 travel booking sites in 75 countries, has over 22,000 employees in more than 30 countries, and has earned 45 percent of its revenue internationally. It has garnered $97.5 billion in gross bookings, $11 billion in revenue, and $344 million in room nights. 
 
Recently, Loyalty360 sat down with Brandon Ehrhardt, Director for Platform Services—Loyalty at Expedia Group to discuss VIP Access, Expedia Group’s platform loyalty program.

To listen to [Podcast] Expedia Group Director Focuses on Hyper-Personalization and Customer Feedback, click here.
 
Can you tell us a little about your program and what the intent of the program is?
 
VIP Access has been around for the past nine years. But, within the last six months we’ve taken a tighter focus on defining what we want to deliver to both suppliers and consumers in the program.  VIP Access is an invite-only program for suppliers where we solicit high performing hotels, hotels that are really delivering on the guest experience, and we offer them enhanced visibility and high value customer targeting in exchange for them providing a superior guest experience. The program plugs into the other Expedia Group loyalty programs like Expedia Rewards, Orbitz Rewards, and Hotels.com Rewards, and it ensures that when an Expedia or Hotels.com Gold Member goes to a VIP Access property, they have an experience that is first in class and is rewarded with valuable amenities. We’re going to be expanding the network of hotels that sit within VIP Access and ensure if a consumer wants to travel, they have a hotel that’s going to deliver a superior guest experience in the market they want to book.
 
What does an experience mean and how do you determine what a world class experience is?
 
VIP Access is unique, because we sit on both sides of the travel marketplace, both the consumer and the supplier side. So, when we think about what a superior guest experience means, it means, first off, this program is available to all consumers. Even if it’s their first time traveling, a guest can book with confidence knowing they’re going to stay at a hotel that really is going to deliver on satisfaction and really make them feel welcome. For our top tier customers, they’re going to be recognized at the front desk, given guaranteed Wi-Fi, a valuable amenity and could be upgraded, given the hotel has availability. One of the big differentiators, where we really think there’s more opportunity to be more personalized, is around amenities. When a “top tier” guest checks in, they’re going to get an amenity like a $50 resort credit or a trip to the spa.  The end goal is to work with suppliers to ensure it is something that they value. One thing we’re looking to test in 2019 is increasing the personalization around those amenities and benefits because, I don’t know about you guys, but when I travel so many times, you get a benefit that you can’t use. If you’re on a business trip and they offer you late checkout, you’re leaving the hotel at 8am anyways. What’s the value? Not much! So, we want to make sure we really connect with guests and work with our suppliers to ensure that the amenities offered to guests are ones that they not only desire but ones they can use.
 
How are you doing that? Do you have different datasets on their preferences, attitudes, and opinions?
 
That’s one of the great things about Expedia. We have so much data that we would be failing our suppliers if we didn’t find a way to turn that into actionable insights for them. What we’re doing, and what we actually completed this year, was a look at all the amenities that we’re being offered. I think there were upwards of 85 amenities offered in 2018, which is a ton of different choices. What ultimately happened is by having that many amenities you end up having things that could be less relevant to customers. So, we went in and stripped that down to about 6 or 7 amenities. They’re going to be things like resort credits, food and beverage credits, but we don’t lose the ability for properties to deliver value.  We’ve got some really cool properties on VIP Access that sit at the base of a mountain, so there’s opportunities for free lift tickets, different unique experiences. But it’s really about getting the suppliers’ information on what consumers want when they book their property. That way they can tailor their amenity offerings, so they can attract that consumer when they’re booking and delight them once they’re in the hotel.
 
Who runs your program? Do you leverage an outside provider like a Kobie or a Brierley or do you use internal technology?
 
We use internal technology. Expedia Group has really invested in technology the past couple years. In 2017, that expenditure was to the tune of $1.3 billion. We’re constantly running tests and learns, and funding research projects that benefit our suppliers. One thing about loyalty is it’s incredibly expensive not only to provide a loyalty program but also to gain any insights from it. So, one of the things that we try to do and use as a differentiator is providing these excellent insights to our suppliers.
 
What does customer loyalty mean to Expedia?
 
I think one of the things Expedia Group is trying to do to be a little bit different is really trying to connect with guests all over the world. We kind of have this little thing about being locally relevant globally. It’s much more than a saying. We want to go out into markets and understand what consumers want and what drives loyalty. So, in turn, we can better market to them and create more of a personalized experience. I think personalization is a word that’s thrown around a lot. It’s about getting deep into that data and understanding your consumers. I think what we’ve done here at Expedia Group in the past year or 18 months is said, “Okay, let’s understand personalization, but let’s go a level deeper. Let’s understand what motivates them to even want to book a trip. And then let’s understand once they’re in-trip, what they’re going to need to have that great experience that keeps them coming back to Expedia Group, and the VIP Access Program.”
 
What is the biggest challenge around data and creating an actual insight that you see from your role?
 
That’s a great question. Everyone can say that they have huge datasets and talk about big data. But really, data by itself is essentially useless. You need to understand how to translate it. We use things like machine learning and lab and innovation testing to understand what the data means. A data set may mean one thing in the United States and that same dataset may actually be interpreted slightly different in a different part of the world. So, what we want to do is make sure that we’re not only capturing the data but we’re turning it into tools that our suppliers can use whether they’re in Chicago or they’re in China. I think it’s important to take the guess work out for the supplier and clearly express to them what the data should be telling them. They’re using Expedia Group because were an efficient platform. If we can make the whole data capturing and data insight process easier for them to understand in action, I think it’s a win-win for us, the consumer, and for the supplier.
 
Partner Central is essentially the portal which partners use to interact with Expedia Group. It provides a lot of really cool insights. Rev+ is a tool that we rolled out. It’s essentially a free revenue management solution. Because we have access to so much data, we’re able to give insights across the market and able to do so at essentially no cost to our suppliers. We offer this free tool to allow them to understand which of their competitors are potentially eating their lunch, or if they have an opportunity to either increase exposure or be a members-only deal or use other tools that we have in our suite to try and attract guests. Free here does not equate to not useful. Highly engaged partners on Rev+ saw a revenue uplift of 21 percent in the latter part of this year. A lot of these properties also happen to be VIP access properties. Smart hotel owners and operators are using smart tools!
 
Do you have a unique coopetition with some hotel entities? Do some brands engage in this more than others?
 
I think we see different levels of participation and engagement. At the end of the day what we want to do is just provide value with that data and allow hotels to have access to it. One of the things that is a challenge for us is when partners say, “Oh, our brands don’t really like for us to be in Partner Central.” What we’re trying to do is share insights.  Everyone should agree knowledge is power. I think just by providing that data that’s one step in creating a better partnership with our suppliers.
 
How are you leveraging artificial intelligence and how would you like to leverage AI going forward?
 
It’s definitely a focus for us. I think with artificial intelligence, there’s still much more to be understood there. How we can take that and make it much more than a gadget or snazzy product? We’ve already rolled out products on Google Home and Alexa, and I think that’s step one. But, there’s a lot more to be done there. We’re continuously looking to harness that technology and ensure that if our partners and consumers want to utilize it we have a product that fits their needs.
 
How do you control that customer experience in your channel and make sure that the customer gets what they want and expect?
 
That’s a great question, because we obviously don’t control the delivery of the amenity for consumers receiving it via the VIP Access program. It starts with selecting the right hotels. We talked about VIP Access, which has about 4,200 hotels around the world. One of the first things we look at on whether a hotel would be right for the program or not is their past experience with service. How are they reviewed? How often are they interacting with our customers via a tool called real-time feedback? We use those to select hotels that we believe have a head start on other hotels in that market in terms of customer service. From there, we try to make it easy and try to make it a simplistic process, so they know exactly who’s going to show up at their hotel and when, in terms of top tier guests. Lastly, we want a surface metrics about how they’re doing. So, if there’s an issue with the front desk staff, they can easily correct that. One of the best ways to do it is to show them comparison metrics. In a market, in Chicago for instance, there’s about 15 VIP Access hotels and when you surface that hotels are delivering benefits at higher rates and those hotels are your competitors. It’s pretty motivating for them to want to deliver that heightened experience and improve on that because they know it’s going to be reflected in guest reviews, which is ultimately one of the top drivers for consumers who are looking to book a trip.
 
What are some other buzzwords or phrases that make it more difficult to do your job in creating customer loyalty?
 
I think that loyalty has become such a commodity. It’s almost like a shopping card. You’re at a Kroger, or using a grocery card, you use whatever is convenient to you. What we’re doing differently is making guests loyal to an experience. Just to remain relevant and retain customers we have to move beyond simply rewarding customers with points and status. It’s got to be about a quality experience. Guests want to be recognized when they check-in. They want that special treatment and those upgrades, and you know making those things easy for our suppliers to fulfill generally has great results for us. So, we really want to focus on hyper-personalization, on knowing what our guests like and what they don’t like, how they’re using information to not only shop but also to book, and how they use that information once they’re in-stay to ensure their trip exceeds their expectations.
 
What’s the biggest challenge you face as a senior marketer?
 
I think the challenge right now is just ensuring that great experiences can stand out. There’s so many loyalty offerings. You turn on an NFL game or a Bravo TV show, it doesn’t really matter, you’re going to see commercials trying to get people to be loyal. What we’re really focused on is leading with the guest experience. We’re just ramping up marketing around the VIP Access program. The reason we waited to do that is because we wanted to have the guest experience ironed out. Now that we have a very strong program we can improve from good to great. I think we’re ready to evangelize that value proposition and use our partners at Hotels.com and at Brand Expedia to continue to attract guests to their already valuable loyalty programs.
 
How do you see your customers changing and evolving and how does that impact what you’re doing?
 
What we’re seeing is that millennials really prefer choice. They really like a selection. They’re not your traditional guest where they’re going to go to a site and only look at one room type. They’re going to shop across platforms. They’re going to look at hotels and vacation rentals. I think Expedia Group has done a lot in the past couple years to increase that choice. We have over 800,000 offerings right now on our platform. So, what we really want to do is connect with millennials and travelers of all generations who are shopping and using things like social media to find inspiration. We’re living in a culture where everyone wants to be an influencer and feel special. If you can really recognize guests when they arrive at your hotel and make them feel special, you know that you’re going to get maybe a couple social media posts, and a strong review. Really, it’s all about understanding what millennials are shopping for and what they want and then providing that to them to make the whole experience easy from the time they aspire to travel to the time they get home and write that review.
 
As you relaunched this program, what worked and what failed as you rolled it out?
 
I think the biggest challenge has been the internal complexity around the program, being on both Brand Expedia and Hotels.com makes us internally quite unique. One of the things that we really try to do is allow both of those brands to use VIP Access as they see fit to market to their loyal customers but also to those guests who travel once a year but want to be 100 percent sure this will a great trip with a superior guest experience. I think we’ve made some strong improvements in the past 12-18 months on that. So, Expedia Group brands are using the VIP Access program to maintain those premium guests, guests that are booking four or five times a year on our sites. Initially setting that up and making sure that the feedback loops were in place was certainly a challenge. Now that we’ve crested that hill, 2019 is going to be about marketing VIP Access to the users of these loyalty programs and driving even greater loyalty to a memorable experience.
 
What about internally? How are you getting executive level buy-in and is it easier now than it may have been 12 or 18 months ago?
 
Yeah, I think it’s certainly become easier as the industry focus has been around loyalty and consumer repeat, whether it’s hotel brand loyalty or our Expedia Group loyalty programs. I think one of the most eye-opening things that we hear when we do these presentations on VIP Access to our executives is how relatively cheap it is for a hotel owner versus a brand loyalty program. If you consider a brand loyalty program, you’re going to pay 5 percent off the top, roughly, just for the points by way of a “loyalty fee.” Then you still must provide the amenities. When we look at our cost structure, we’re about a fifth of that cost. Our only cost is on the amenity which is delivered to the top tier guests. Expedia Group funds the point redemption. When someone burns points, we fund that to the hotel. That’s a full net rate, which is certainly not the industry norm. Then with VIP Access, what is even better for suppliers, we have a double burn benefit. So, let’s say a hotel is $200 a night, you only need $100 worth of points to stay there. It’s just one more perk for the consumer, and for the supplier who gets more demand.
 
Some of the value of rewards from our member hotels are pretty inexpensive and the hotels probably aren’t making what they would want to on that redemption always. Thoughts?
 
There are certainly hotels that get on the wrong side of that burn-and-earn ratio. That can be challenging for an owner. You can end up discounting rates at the end to make sure that you’re above those thresholds so you’re getting a higher payout from the hotel chains. It’s something that all hotel owners should be cognizant of. You need to evaluate what the true cost of being part of a loyalty program is. Are you really getting what you pay for?
 
What metrics are you using? Do you think we as an industry could create a loyalty metric and what would that be?
 
We certainly look at NPS. But we also do something a little bit unique. So, we gauge the guest’s sentiment right when they check in. We send them an e-mail, and we also send them a review after their stay. So, there’s two data points. While we look at NPS, there’s a few other things that we’re looking at. One of those is repeat rate. I think historically the industry has not done a great job of understanding what a “great” repeat rate is. For instance, I was talking with a supplier in Latin America. They were looking at their annual customer repeat. How often were they repeating in a year? Well, if you ask yourself the question, how often are you going to go to Punta Cana or Cancun in a year? Probably only once. Now, you might go once every year, but if the bar is set on how frequently you’re getting a guest, you need to look at really what the demographics of the market are. That’s something that needs to be done at a market level, which makes that difficult. So, I think one of our main focuses for 2019 in terms of giving our partners more actionable data is helping them understand, are they attracting repeat guests? Top-tier loyalty program members who stay at a VIP Access property are four to five times more likely to return to a VIP Access property than base-level or non-members. You must evangelize that and truly partner with suppliers to help them grade on the right answer key.
 
What about GDPR, the California regulation, increased concerns over data security privacy? How are you looking at that?
 
Yeah, I mean any data company should understand that trust is the most important part of the business. I think as an industry we need to work together to ensure that data is secure. We have excellent security and encryptions here at the Expedia Group, but you have to be ever aware of changes to market laws and governance. Because we’re such a global company, we take adhering to privacy laws and being aware of changes incredibly seriously. So, maintaining that trust with our customers and partners is paramount. We really strive to be the industry leader there and ensure that people feel like they can trust Expedia Group and that when we’re sharing information that we are adhering absolutely to privacy laws and doing so for the consumers benefit.
 
How are you managing innovation? Do you have a test-and-learn methodology?
 
We have a joke around the office that if we had a dollar for every time someone said “test and learn” we could probably retire by the end of January. We had 5,500 tests between April 1, 2017 and March 31, 2018. But it’s not that we have a lot of tests just to say we do. It’s the way that we structure them so that we’re continuously learning and continuously able to reinvest in technology based on what we learn from these studies. So, test and learn is huge. It’s not something that’s just on the product side, it’s done throughout Expedia Group, throughout the lodging partner services organization and with our internal brands as well. It’s something that has had great benefits for us as an organization. I certainly come to work and learn something new frequently just based on innovative and exciting new ways of looking at old problems.
 
How does employee loyalty fit into what you’re doing? Especially from a supplier perspective.
 
I think our mantra has been to align everyone to understand what the end goal is and what everyone is hoping to accomplish. If you start there and then zoom in, I think it’s a little bit easier.
 
What does disruption mean to you going forward?
 
I take disruption and I think of it a little simplistically. To me it’s just getting a little better every single day and continuing to innovate on our platforms and ensure Expedia Group is offering that leading technology, ensuring that our investments are in areas that our partners care about, and that we’re constantly seeking feedback from them and making sure that feedback loop is there both on the supplier side and on the consumer side. When we can connect those two feedback loops, we can create an incredibly powerful product. We talk about harnessing the power of the platform. That’s something that the Expedia Group is laser-focused on and it’s something that we’re really excited to continue in 2019.
 
What can we be doing as an industry to bring more focus on customer loyalty?
 
It’s not about building for today. It’s about building for tomorrow. Leverage world class technologies. Let’s make the loyalty guest experience as frictionless as possible. That goes from booking to on-site to post-stay. The industry needs solutions that are easy, that are turnkey, that are mobile friendly. Being powered by technology and really understanding what suppliers need to be efficient and how we can best solve for customer problems that will arise. Being always one step ahead of the game and really leveraging the world class technology that we invest in to ensure guests have a great stay on-site and suppliers are receiving that demand that they’re utilizing Expedia Group for.
 
Do you use a feedback loop in those situations? Surveys, post-stay surveys, a VOC approach?
 
With real-time feedback and post-stay reviews, if there’s a large Las Vegas hotel, they might get 200 reviews in a day. Having someone read through those would literally be a full-time job. One of the things we’ve done with our real-time feedback platform is give the hotel actual insights and say, “Hey, a lot of people are mentioning that breakfast was a little subpar, now you didn’t have this issue six months ago. Did something change?” I think what our partners have told us is that’s valuable because instead of spending two to three hours for one employee to do that, they spend ten minutes and can understand, “Ok, maybe there’s an issue at the front desk,” or “Maybe we need to retrain some staff members.” It has certainly been super valuable for our suppliers.
 

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