Selling more is the right way to grow a business, right? After all, gaining new customers is the goal of any business. However, the industry is beginning to realize that hotel loyalty programs can be even more beneficial than acquisition.
There could be various strategies behind designing a loyalty program for hotels but the main purpose is to make your potential guests prefer your hotel over another and keep them coming back. These programs not only encourage guests to come back again and again, but also attract new customers, increase the hotel’s occupancy during off-peak hours, and if planned well, act as an effective marketing strategy. For the guest, they bring a sense of exclusivity and recognition that are key to their experience.
For the success of the hotel loyalty program, it is imperative to address the different needs and boost motivations for its members. Executing a unique marketing strategy for these different profiles, including a tiered approach, offering personalized offers, and getting consistent feedback from your members will undoubtedly ensure the longevity of your rewards program.
A hotel loyalty program is a rewards program that offers benefits for more frequent travel, similar to an airline mileage program. But, instead of accumulate miles, in the hotel loyalty programs, members accumulate points. Not only points can be given for the hotel room check-ins but also for dining at their F&Bs, using the spa. It’s a great marketing strategy to attract and retain guests by offering discounts and other privileges.
Loyalty programs not only work for large hotel chains but independent hotels also recognize the value of loyalty strategies and are looking for ways to compete with the billion-dollar budgets of OTAs, even if their resources are very limited.
Let’s dive deep into the benefits of hotel loyalty programs and the best strategies to boost your hotel’s results.
Guest retention and cost-effectiveness
Loyalty programs are a great way for hotels to boost guest retention. In fact, a study from the Harvard Business Review found that generating a new customer was five to 25 times more expensive than retaining a current customer. The same study found that increasing customer retention rates by 5% increased profits from anywhere between 25% to 95%.
With a loyalty program for your hotel, you can build long-term relationships and satisfied customers, generating more revenue for your business.
Not only do loyalty programs entice travelers to book because of rewards and perks, but they are also useful for attracting new bookings, both for businesses and vacationers.
Loyalty programs not only entice travelers to book because of the rewards and perks but are also useful for attracting new bookings, both for businesses and vacationers.
A leisure guest may be more likely to book a last-minute holiday because they have a deal or voucher, however, corporate guests will be more likely to be repeat booking.
For example, if the corporate guest has to travel to different areas where the hotel chain is located if he is a loyal member, he is likely to book with the same chain where he is a member in order to enjoy the attractive member privileges.
You must already be collecting a database of your guests but how easy is it to use these databases to tailor the rewards and privileges for these members. By having your hotel loyalty program, the platform will easily upload your data, sign up customers and you will have those numbers at your fingertips. You can use the data to create a valuable guest profile that will help you introduce tailored discounts and other targeted privileges.
For example, there are loyalty program platforms that can track your valuable customers based on the number of spendings, their visit frequencies, and target marketing campaigns with tailor offerings to meet their needs, such as spa services, business discounts, airport shuttle services, and so on.
Attract frequent travelers
Frequent travelers, especially business travelers, are looking for an easy booking and are likely to repeat it if they are satisfied. They also tend to travel to the same places regularly. So, with the help of a reward system, you are likely to attract these frequent travelers as they tend to seek those hotels that offer perks for regular bookings.
How to set up the best hotel loyalty program for your properties
Setting up the best loyalty program for your hotel should not be a daunting task as there are many loyalty solution providers to set up your program easily. Just that it is important to understand your needs first and set your strategies.
Define “loyalty” for your brand.
Before you set up your program, it is important to understand what loyalty is for your brand and how are you going to reward your customers. Be strategic about this and have a plan from the beginning- when are you going to reward your guests?- On weekends, weekdays, or during a festive season or non-peak season? Define time frames of the points expiry. You will have to make sure everything is as clear as possible not to confuse you and your guests.
Reward your guests on their birthdays, for visiting frequently, for using your F&B counters, referrals. You can be a lot creative in curating different offers and rewards to make your members happy.
No ‘One size fits all’ offers
Delight your customers with personalized offers
Customers want personalized experiences with their chosen brands, for hotels to it applies the same. Every customer is different, every customer should be treated differently too. A family might look to enjoy a free breakfast while a corporate guest might be looking for a free shuttle service to the airport. You can mix match the rewards to fit their needs. You can opt for discounts on reservations, secret deals, room upgrades, welcome packs, early check-in, happy hour, discount on spas, and many more.
Go for a tiered program
With a tiered loyalty program, your members can access many additional benefits by advancing through the different ranks or tiers. The tiered loyalty program encourages your members to engage more with your brand and spend more to earn the benefits or privileges.
It not only adds value to the status of your members but also helps to establish a long-lasting relationship with your brand. With a loyalty program solution, you can also segment your members more effectively, analyze their activities and improve the customers’ experiences and also provide highly targeted campaigns.
Get customer feedback
Feedback, no matter good or bad, big or small, is important in every sphere and every domain. For hotels too, feedback is key to improving customer experience.
There are loyalty platforms that allow taking the feedback on the go with the transactions, this will make it easier for your members to rate you or give feedback on your service. You may also take an opportunity to ask what kind of rewards they would like so that you can later review to make the program more dynamic and exciting.
Thus by focusing on the in-hotel experience, with things like free enhanced room upgrades, and other transactional or non-transactional reward programs, you can make your members’ stays more special, and reinforce the brand love among its members. You not only will retain your customers and keep them coming back to you again.
Learn more about Loyalty Programs for Hotel.