Last week I was on a business trip to Kuala Lumpur and checked into a well-known global hotel chain.
At check-in, the receptionist asked whether I would like to pay for an upgrade to a similar room but with a better view. It seemed like a standard upsell process that had probably been offered to thousands of guests before me.
The problem was that the hotel knew almost nothing about me.
What they didn’t realise was that I am exactly the type of customer they should be fighting to keep.
I am a frequent business traveller. I travel internationally throughout Asia-Pacific. I regularly stay in hotels, entertain clients, dine in hotel restaurants, visit bars and occasionally use spa facilities. In loyalty terms, I represent a potentially significant Customer Lifetime Value (CLV).
Yet because I wasn’t a member of their loyalty programme, I was treated as a transaction rather than a future relationship.
Instead of asking me to pay for an upgrade, imagine a different scenario.
The hotel recognises that I am a first-time guest with characteristics that closely resemble their highest-value business travellers. Their predictive models identify a high probability that I could become a repeat customer across multiple cities and properties.
The receptionist says:
“Mr Tew, we’d love to welcome you to our loyalty programme. As a thank you for joining today, we’d like to offer you a complimentary room upgrade and some additional member benefits during your stay.”
Now everything changes.
I join the programme.
The hotel captures my identity and preferences and perhaps most importantly, I’m
During my stay, they can see that I spend heavily in the restaurant, enjoy evening drinks in the bar and book a spa treatment.
For the first time, they have a connected view of my behaviour across the property.
After I leave, they know:
More importantly, they can use that information to influence future behaviour.
Before my next trip, I receive a personalised offer for another property in Singapore, Bangkok or Manila.
When I arrive, my preferences are already known.
The hotel recommends experiences that match my interests rather than sending generic promotions.
Every interaction becomes more relevant.
Every stay becomes more valuable.
Traditional loyalty focuses on rewarding transactions.
Stay 10 nights. Get 1 free.
Next Generation Loyalty focuses on identifying future value and creating emotional loyalty before the customer becomes loyal.
It combines:
The objective is not simply to reward loyalty.
The objective is to create loyalty.
In my Kuala Lumpur example, the hotel had a guest standing in front of them with strong indicators of future value.
They saw a room upgrade opportunity.
A Next Generation Loyalty strategy would have seen a future VIP customer.
The cost of the complimentary upgrade may have been $50.
The lifetime value of the relationship could easily be tens of thousands of dollars across hotel stays, restaurants, bars, spas and events over the next decade.
Instead, I checked out.
The hotel made some revenue from my stay.
But despite all the money I spent on property, they still have no idea who I am.
And that’s the difference between revenue management and Next Generation Loyalty. One optimises today’s transaction. The other builds tomorrow’s customer relationship.
