Expedia, one of the world’s largest online travel companies, has elevated the customer experience through the success of its Small Hotels Program in North America.
Recently, Expedia announced that the program sparked a 40% year-over-year increase in new North America hotel partnerships with properties comprised of 50 rooms or fewer. Officially launched in North America last year, the Small Hotels Program aims to better meet the needs of small properties such as inns, guest houses, and B&Bs through tailored, flexible agreements.
The Small Hotels Program was developed when Hari Nair, VP of Expedia’s Market Management for North America, found that out of all the hotels that exist in North America, the largest gap in those that Expedia did not work with were properties that had fewer than 50 rooms.
Nair participated in an enlightening interview with Loyalty360 to discuss the burgeoning program
What factors prompted Expedia’s launch of the Small Hotels Program in North America, and how did the results so far impact customer engagement and customer experience?
When looking at all the hotels based in North America, we realized that the largest gap in hotels that we didn’t partner with were properties with 50 rooms or fewer. We started to research why that was the case, and learned that these properties didn’t understand the capacity of the resources an OTA could offer in terms of generating demand. We set out to connect with them directly to educate them on the value we could offer, and developed flexible tailored agreements that would fit their individual needs.
The result is improved customer experience. We feel strongly that to have the best travel brands we need to offer a wide array of options to fit all of our customer’s travel needs. By increasing the amount of small hotel properties such as bed & breakfasts, inns, and guest houses on our sites, we are satisfying a need in an accommodation type that our customers are interested in.
Since this launch, have you seen a change in customer behavior?
These offerings are especially valuable for international guests who are interested in small hotel properties but, being unfamiliar with the local market, wouldn’t know where to look to find a small B&B or inn.
What has been the feedback from this program from hotels?
We’ve received overwhelmingly positive feedback from hotels, including that they’ve had to hire additional staff to keep up with demand, that they’re ahead of forecasts, that they’ve been able to reduce other advertising costs as they now have international visibility, and that they’ve finally been able to get into the last minute booking game. Here are a few testimonials:
George Ware, innkeeper at The Chalet Suites Boutique Hotel in Whittier, North Carolina: “Expedia has especially helped us to sell unbooked rooms at the last minute - a lost room night’s revenue is just that, lost. Now we can compete with the “big guys” whereas before we did not have an effective platform for discounting and selling last minute availability - some revenue is better than none.”
Anita Henslin, from Pearl of the Sea Luxury Bed & Breakfast in St. Augustine, Florida: “Our property is several months ahead of projected bookings largely because of Expedia promotions and we had to hire additional staff to keep up with demand.”
Brenda Yablon, owner of the Manor Guest House, a 25-room, three-star inn in Vancouver: “Being with Expedia has vastly surpassed all expectations. We've always had a high occupancy rate, but now Expedia accounts for about one third of all our business, which has allowed us to cut back on other advertising. There isn't a 25-room hotel on the planet that can afford to market in all of the countries that Expedia reaches."
What do you understand better now because of the program?
We understand the importance of showing our small hotel partners that they can compete with big business through access to our global marketing capabilities and tools such as real-time feedback, analysis, and adjustments that help optimize their revenue management strategy.
How do you define customer loyalty and has that definition changed or evolved in recent years?
We consistently listen to customer and hotelier feedback and have heard that loyalty programs are important. Our travelers want the benefits of a loyalty program. Expedia’s rewards program has evolved in recent years and was relaunched in July 2014. Expedia+ rewards program is a response to customer feedback, and the goal of this program is to offer a more streamlined, user-friendly, and enhanced customer loyalty experience. The key new feature is multi-tiered levels of membership. The new tier structure—Expedia+ blue, Expedia+ silver, and Expedia+ gold—allows customers to earn extra benefits the more they book through Expedia.
Extra benefits include special pricing, upgrades and priority customer care experiences. So more members can attain elite status with the introduction of the new +silver tier, attained after booking only seven qualifying room nights or $5,000 in annual spend on Expedia, and the new +gold tier, attained after booking 15 qualifying room nights or $10,000 annual spend. Customers earn points on hotels, flights, activities, and packages, and two points for every $1 spent with most major cruise lines. They can redeem points for a wide array of rewards including hotels and flights or even donations to charity.
Interestingly, I should also note that Hotels.com has a very straightforward rewards program that is relatively unchanged since its launch in 2008: Book 10en hotel nights on more than 100,000 eligible hotels around the world, and you get the 11th night free. Since launching in 2008, Hotels.com customers have collected more than one million free room nights.