From Luxury Ladder to Long-Term Relationships in Travel & Hospitality

By Matt Paladino, SVP, Portfolio Lead

The product ladder, pioneered by GM in the 1920s, is a marketing strategy where products or services are offered in a series of varying tiers, typically based on a pricing structure. GM’s ladder kept car buyers within a brand ecosystem for their entire lives, offering increasingly premium vehicle brands as they tiered up, ultimately leading them to the luxury and prestige of a new Cadillac.

But there are other ways to build ladders — and they’re not all about luxury. Sometimes they’re about meeting your customers where they are, finding the right fit at the right moment and connecting with them on an emotional level.

Laddering Strategies in Travel & Hospitality

A lot has changed since the heyday of GM’s ladder. But we can still learn from both the success and the eventual downfall of their strategy — including how to design more adaptable and data-driven ways to approach laddering.

In travel and hospitality, laddering takes a lot of forms:

• Brand portfolio ladders: Like GM’s approach, hospitality ecosystems can operate multiple brands across a variety of price points and luxury tiers, taking their customers from Fairfield by Marriott to JW Marriott to the Ritz Carlton or St. Regis.

• Core product ladders: The same product type is tiered; for example, customers can ladder up from economy to premium economy to business or first class.

• Loyalty/rewards ladders: Members can unlock experiences, benefits and access to additional facilities by earning loyalty points.

• Add-on ladders: For an additional charge (based on how “high” on the ladder they want to go), travelers can add more to their trip. This might include lounge access, a group tour or basic spa access. These add-ons can be single items or package deals. And some brands enable travelers to buy memberships, like an Ambassador or VIP program, that grant them exclusive access, rates or packages — often tied into an existing loyalty rewards program. These add-ons can be offered in-the-moment during trips or during the booking process. Some brands even make recommendations outside of their specific offerings; for example, an airline might make car rental or hotel recommendations to earn a commission on the transaction and become the traveler’s go-to hub for all bookings.

These strategies are all well-known, and most brands have been using them for a long time. What’s changed most in recent years is the ability to tailor and target offerings with the help of data. Brands can use data to do something more than “level up” their customers; they can use it to provide the perfect experience for the buyer’s current situation.

Top-Tier Can’t Always Be the Goal

The truth is that a lot of consumers aren’t going to progress from Fairfield to the Ritz-Carlton or ever feel able to travel first class. Just taking a flight, renting a vehicle and staying at a hotel is a luxury in and of itself for a lot of consumers. Some may eventually be able to afford a $20,000 safari package, but others are just looking for a change of scenery over a long weekend.

In the last few years, we’ve seen and done a lot of research on consumer confidence and spending habits during times of uncertainty. Economic and social pressures are changing the behaviors of younger travelers in particular and widening the split of a K-shaped economy.

A great many milestones, like home ownership or starting a family, are out of reach for a lot of consumers — and likely will be for the foreseeable future. They’re saving and spending very differently. Rather than saving for a down payment on a house they won’t be able to afford any time soon, many are willing to spend on micro-luxuries like travel packages and dining experiences.

For travel & hospitality brands, the challenge won’t just be building engagement and loyalty with these younger travelers — it will be right-sizing experiences to fit their needs and preferences, whether they ladder up or not.

The Need for Data

Even basic data points can make a big difference, helping brands offer upgrades based on the traveler’s context and history. Simple signals like party size, usage history or trip purpose are good starting points. They can help you:

• Offer returning travelers their favorite seat or room type first, then follow up with data-informed upgrades.

• Adapt experiences to fit the booker and the occasion. If they’re traveling with family, offer kid-friendly packages. If their next trip is solo, adjust offers and experiences accordingly.

• Present couples with upgrades that align with their interests; not everyone wants the romantic couples massage, some might be thrill-seekers looking for adventure packages, or just to be able to sit next to each other on the plane.

• Nudge business travelers toward productivity-boosting features (including free Wi-Fi or a good night’s rest).

The point is that history and context matter. If a customer never engages with a specific upsell, don’t lead with it. Look for something specific to their needs, preferences or typical trips.

One of your richest sources of data will be your frontline staff. Their observations, direct engagement with customers and social engineering are crucial to tailoring experiences. But data collection should be as comprehensive as possible, including both qualitative and quantitative data like online interactions, previous experiences, types of reservations, CSAT surveys, etc. Together, these data points can provide a holistic picture of travelers and can help you create moments that perfectly fit them.

These data-driven interactions can include communications, welcoming them back to a route they’ve taken before or their favorite kind of room (top floor, overlooking the city or ocean); complementary add-ons based on what they bought last time; or menu recommendations informed by their previous orders.

Suggestions need to feel personal, trip-appropriate and intuitive. If the customer feels like you’re considering and anticipating their needs, you’re winning their loyalty at their existing tier — and you’ll keep it when (or if) they level up.

Getting personalization right helps you cater to diverse customer needs, enhance experiences and create a competitive advantage that results in:

• Increased conversion rates

• Higher Revenue Per Available Room (RevPAR) or Revenue Per Available Seat Mile (RASM)

• More repeat bookings across tiers

• Greater share of customers moving to higher tiers over time — not just one-time upsells

Just remember, the most important ladder you’ll build for your customers is an emotional one. Begin with comfort, build personalized experiences that feel like indulgences and eventually create a sense of belonging. Make them feel safe, seen, heard and known. Regardless of tier or price point, your brand will feel like your customers’ place in the world.

Build Long-Term Relationships with Material

GM’s product ladder struggled to meet, or even fully acknowledge, the changing conditions of the late twentieth-century market. As a result, they lost their market share and status. Now, we’re in another time of significant change: e-commerce, commoditization, tariffs, inflation and more are all having an impact on how and where consumers spend.

Travel & hospitality brands must adapt. Any successful approach to building long-term loyalty must be intentional and emotionally resonant. The goal can’t be to push everyone to the top tier; it must be to ensure every traveler sees a clear, compelling next step that matches their moment, purpose and aspiration.

With the help of a data-driven approach and science-based tools that enable human understanding, travel and hospitality brands can build valuable, long-term relationships with travelers across every tier. Start your journey to deeper customer engagement today. Reach out and let’s start the conversation.