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Hotel rewards programs and guest loyalty: Understanding the whole story at your hotel

  Posted in Resources

Hotel rewards program

A hotel rewards program is certainly a worthwhile activity for your brand to engage in. If your hotel values its customers, it makes sense to thank them for choosing your property in favour of any other.
One way to show your gratitude for their business is by offering rewards that enhance their current stay, or give them an even better experience on their next one.

The idea of course is to reinforce to the guest that they made the right decision and that they should always return to your brand.

Hotel rewards programs can come in many different forms however, and there is more than one way to build guest loyalty at your hotel – and every guest is an individual so they will react differently.

Are your guests more motivated by price, luxury, or value for money etc?

This blog will take you through the main considerations when creating rewards and loyalty programs at your hotel, helping to secure more return guests.

Table of contents

A hotel loyalty program: Do you need one?

Ultimately you decide what your property needs, but there are definitely some pros to introducing a loyalty program at your hotel.

Some advantages include:

  • Improved guest experience – A loyalty program will mean frequent travellers who come to stay at your hotel are never overlooked. Their preferences will be recognised and taken care of, making their trip more seamless and enjoyable.
  • Increased bookings – Often, the promise of rewards or instant perks can be enough to get undecided travellers over the line. In this sense, a loyalty program isn’t just useful for keeping the guests you’ve already won, but attracting them in the first place.
  • Cost effectiveness – Reaching out capture repeats guests places far less strain on your marketing and sales efforts than trying to find new guests. It’s also more likely that loyal repeat guests will book your hotel directly rather than via an online travel agent, saving you money on commission.
  • Boosted revenue – Guests who keep coming back are obviously happy with the service they’re offered, and they’re more likely to spend money on extras and additional amenities too. If you prove yourself time and again, guests will be happy to keep spending money.
  • Valuable insights – Including guests on a loyalty program means you can build more profiles, with more information included within them, than ever before. Knowing their preferences, interests, and behaviour is extremely valuable to you in attracting new guests that are the perfect targets for your property.

Corporate advantages – Many businesses, travel managers, or event planners will choose hotels that offer loyalty programs, since these are the most likely groups to regularly return to the same locations.

That’s not to say there aren’t any disadvantages of having a loyalty program; there are. They can be expensive and time-consuming, and they can be ineffective in some markets or if they aren’t thought through.

What is the best hotel rewards program?

To date, the most common loyalty system involves the accrual of points which guests can build up and then redeem for various benefits.

However, this is not necessarily the best option and there is no restriction on what kind of loyalty program you wish to install, as long as it rewards your long-term customers and helps to positively influence your hotel’s reputation.

It’s important to do your research, though:

  • 20% of the participants don’t join loyalty programs because the offerings simply don’t interest them
  • 60% are interested in being able to choose their own rewards

Remember that every traveller is unique and personalisation is key. The best rewards program will play to this and have the most success in developing loyalty.

In a market that has become so saturated, the best programs find a way to break through and stand out. It’s important to consider the mindset of the traveller coming through the door and think about how you will really satisfy their particular needs.

Which hotel has the best rewards program?

There are a lot of big brands that are doing a great job on rewards and guest loyalty.

To focus on one example, consider Marriott Bonvoy (formerly Marriott Rewards).

The Marriott Bonvoy program’s key feature is its large network of hotels in popular vacation destinations across the United States, Asia and Europe. Members can also earn rewards points when staying at affiliate brands like St. Regis or Ritz-Carlton hotels.

Members can earn and redeem points at thousands of hotels, and gain exclusive benefits such as free in-room internet, member rates, mobile keys, no blackout dates, instant redemption on food and beverages, and more.

The best programs will offer all travellers the opportunity to earn valuable rewards simply by signing up and taking a trip.

Other highly regarded programs include:

  • Wyndham Rewards
  • World of Hyatt
  • Choice Privileges
  • Best Western Rewards
  • IHG Rewards Club

Loyalty without a guest loyalty program

A guest loyalty program isn’t strictly necessary to create and foster loyalty to your property. A loyalty program isn’t required for travellers to want to return, but it is nice to confirm your appreciation for guests.

So, how do you build customer loyalty? Here are some tips to turn a one-time visitor into a loyal, ever-returning guest.

1. Be a global player on and offline
In a world that is better connected than ever, it has become increasingly important to cater to the needs and wants of all potential guests – and many of these guests won’t necessarily speak your language.

According to Forbes, 72% of customers prefer to make a purchase in their own language and remember: English is not the primary language in 57% of the fastest growing markets. While most people now speak English, they want to feel that you are considering their needs and are looking forward to hosting them. This means that not only should you be prepared to hire multilingual staff, you should also consider optimising your website by creating various language versions.

The ability to cater to foreign markets and identify trends amongst your visitors will underline your credibility as a global player, and emphasise your readiness to integrate your customer’s needs within your customer experience management strategy.

Online, it’s as simple as making your website easy to use – while also featuring the best rates, availability and special offers, as well as presenting potential guests with services and features they want. For example, if the majority of your customers are business travellers, it’s likely they will be most keen to relax, so it would be worth ensuring your pampering services (such as your massage parlour and spa) are easy to access and can be added to those guests’ bookings. An easy-to-use website can increase direct bookings quite considerably.

2. Make the customer experience personal
When travelling to foreign places, where you often don’t know your way around, a helpful concierge or friendly hotel staff with the right information on hand can often be a dealmaker or a deal-breaker.

Guests like to feel well looked after. If you spoil them with bespoke experiences, including tailored offers and personalised recreational options, they will take note and are highly likely to revisit. In a research study by State of Travel, 87% of those surveyed stated that staff courtesy was an important factor.

You can often build a profile of your guests, and establish the reasons behind their trip by analysing their data within your property management system. However, check-in is the perfect time for your staff to find out more information about your guests’ travel purpose; Are they on a business trip or a romantic weekend away? Or, are they simply having a relaxing holiday with the whole family? Once you know what they are after, use that information wisely and make it work for you.

For example, when you have honeymooners stay with you, offer them something special to enhance their experience such as a free room upgrade or a free spa treatment. Don’t just satisfy your guests – delight them.

(Make sure you also collect feedback whenever you can – be it through a customer survey or thank you email – so you can improve future guest experiences.)

3. Reward customer loyalty
Acquiring a new customer can cost five to nine times more than selling to an existing customer, so it’s pivotal that hotels do everything they can to keep their existing guests happy and revisiting time and again.

Loyalty programs that offer guests discounts, freebies and other perks, for example, can add real value to a guest’s experience – and ultimately to your sales graph.

Remember to keep it personal. By focusing on making rewards personal and meaningful, providing in-the-moment accessible rewards and reshaping the customer experience, hoteliers can win customers and entice them to come back repeatedly.

Customer service and guest experience remain at the core of the hospitality industry, so don’t be afraid to acquire the tools that can help your hotel to operate more efficiently.

Hotel customer loyalty programs: Tips and tricks

When trying to create an effective customer loyalty program, there’s a few standard principles you can follow. Some tips you might want to keep in mind include:

  • Try to personalise your rewards system as much as possible so your members feel like an individual
  • If using a points system, make sure there is a diverse range of awards to choose from so your members won’t be bored or put off
  • Make member exclusive offers outside of the normal program
  • Create relevant and desirable rewards strategies rather than generic or formulaic plans (try to steer clear of the standard points system)
  • Maintain contact with your members. Regularly use one-click emails and constantly give them ways to maximise their participation in the program
  • Make the claim or redemption process as simple and quick as possible

The more members you have in your loyalty program the better, since you can then start asking these guests for feedback. They’ll be more likely to give your property a positive review on sites like TripAdvisor which will in turn help you acquire more customers.

More customers means more revenue coming obviously but there’s another benefit to increased occupancy; it provides some great opportunities to gain insight from customers about how you can improve the guest experience. Improve the guest experience, and more guests will want to join your loyalty program.

Factors that influence hotel loyalty

There are very few factors that are more important today than the online reputation of your hotel. Without an established and positive reputation on the web, where most travellers are doing their travel research and booking, your hotel won’t capture the amount of reservations you need to run a successful business.

This reputation will be higher with every new loyal guest you win. The factors affecting this guests loyalty always boil down to individual perspective.

For instance, a luxury traveller spending a large amount of money each night on a room probably isn’t going to be overjoyed with a small discount for his/her next stay, because the money doesn’t mean as much to him/her. This won’t create loyalty.

You’ll win the loyalty of a customer like this, or any customer, when you give them an experience that exceeds their expectations. To do this, you need to know the customer. You need to understand their behaviour, habits, interests, preferences etc. When you have this information, you can think of ways to surprise the customer and give them something beyond their normal expectations. This is where loyalty starts to grow, because it shows they are taken seriously and cared for in a very personal manner.

Small things can also have a big impact. For instance, if guests are used to staying in hotels where they’re required to pay for things like phone chargers, internet, or other facilities such as printers etc, and then they find themselves in a property where this is free – that can sway them. When on a trip, these are their essential needs and if the hotel is making sure they have them without asking for more money than it can be enough to build loyalty.

If you need to, raise room rates to account for extra expenses on your side but make additional services complimentary.

Is guest loyalty dying?

The behaviours, attitudes, and expectations of today’s traveller are constantly changing. Couple this with an overwhelming case of brand saturation and it’s not surprising many believe loyalty is dead. While it may be extreme to say hotel loyalty is dead, it’s certainly not the same as it once was.

A study found that most members of programs aren’t very active and that activity declines around 2.5% annually.

However, it’s still important. Loyalty programs as a concept are actually quite effective and more than a third of travellers still believe they are useful for saving money or gaining added value.

The concept is alive, but old tactics are dying. It’s more important than ever to create a great experience because loyalty only lasts as long as a quality experience. There’s no amount of loyalty points that would give someone who had a terrible experience reason to come back again.

Originality and personalisation from hotels. Most loyalty programs are run by large chains and simply offer a points rewards system that is uninspiring for most guests. If hotels get it right, there is life left in loyalty programs yet!

Hotel guest loyalty program advice

In trying to combat some of the impact OTAs have on reduced hotel loyalty, hotels need to take on the persona of innkeepers and also use the obvious advantages hotel brands possess.

As one manager pointed out: “When a customer eats breakfast at my Marriott, every Marriott hotel in the world has the opportunity to know what that person likes to eat for breakfast. Expedia does not.”

What some hotels have forgotten is that customers are loyal to service and value, not simply to price. A discount is not enough to keep a guest coming back. Hotels can only win the hearts of travellers by knowing them better and showing genuine care for them. The guest will be more likely to return the favour.

With value-for-money as the go-to mantra, there are a variety of ways to please guests.

Think about how you can pleasantly surprise your customers and give them more than they think they’re paying for.

Think about offering:

  • Complimentary services
    Breakfast, wifi, late check-out are things your guests would be thrilled to get for free
  • Inclusions
    Even an extra ‘care-package’ of food, beverages, or toiletries could be enough to put a smile on your guest’s face
  • Familiarity
    Greeting your guests by name, anticipating their needs, and remembering their preferences goes a long way
  • Socialising
    With many guests travelling alone, they would much appreciate an excuse to connect with other travellers. Host happy hours or other social activities to bring people together and create a welcoming atmosphere.

People love to share good news and in travel especially, people love to make recommendations. Your loyalty program will increase the chances of your regular guests bringing new guests right to your doorstep.

The more a customer feels they’re being given great value, the more likely they’ll want to share it with those around them, including to other travellers online.

At the same time, perks and rewards should not replace customer service. Guest satisfaction must be high throughout their stay, otherwise a rewards program may feel like a bribe and it won’t be enough to garner a positive review or return stay. Use amazing guest experiences to entice travellers to join your loyalty program, not the other way around.

It’s impossible to please everyone perfectly. Some customers simply enjoy complaining and when they’ve paid their money, they probably have a right to. However, your hotel needs to separate what will hurt your reputation, and what will enhance it.

Guests could take issue with any number of things; from a chip in a tile, to the light saturation in their room. A review stating there was dust on the windowsill won’t raise an alarm bells for other travellers, but one saying the breakfast was horrible will.

Unless your hotel is lucky enough to have a customer base that regularly returns out of convenience and necessity, a one-off loyalty program is unlikely to work. It’s far too time consuming and expensive to invest in that kind of plan.

Hotel customer loyalty

The good news is that you probably already have a number of loyal customers.

These are the people who like to holiday to the same location and prefer to book the same hotel every time, or they’re business travellers who frequent the location and always choose the hotel that best meets their needs for convenience and comfort.

Acknowledging these guests is important and by rewarding them it will only strengthen your relationship and increase their inclination to recommend your hotel.

Some personalities are more attuned to loyalty programs than others. Let’s look at a couple that can be targeted strongly by loyalty offers.

The Conservative Homebody
Snapshot

  • 16% of global consumers
  • 52% male
  • Average age: 37 years old
  • Household income: US$41,230

Conservative Homebodies often focus on personal issues, such as home, family
and spirituality. They’re not very image conscious or particularly materialistic, and rarely make impulse purchases. They are most influenced by their friends and family.

Top three motivators

  • Value for money (58%)
  • Trying new products and services (57%)
  • Low prices (50%)

Top three influences

  • Recommendations from friends and family (49%)
  • Independent reviews (39%)
  • Traditional marketing (30%)
  • Social media (30%)

How to target Conservative Homebodies
Hotels that clearly showcase where Conservative Homebodies can save money while providing a unique and memorable experience are likely to ensure repeat purchases and customer loyalty.

The Balanced Optimist
Snapshot

  • 9% of global consumers
  • 60% female
  • Average age: 41 years old
  • Household income: US$49,868

Balanced Optimists value quality and place importance on personal health and well-being. They are usually cautious with how they spend their money. However, they also place a lot of importance on their personal happiness. The Balanced Optimist is most likely to be influenced by traditional marketing channels such as loyalty rewards programmes and TV commercials.

Top three motivators

  • Value for money
  • Trying new products and services
  • Low prices

Top three influences

  • Recommendations from friends and family (70%)
  • Independent reviews (56%)
  • Social media (37%)

How to target Balanced Optimists
Due to their heavy interest in low prices, clear discounts and easy price comparison it’s important to make browsing and purchasing as convenient and hassle-free as possible, removing any possible friction.

To keep guests satisfied and your online reputation intact, you need to make sure the majority of your time and effort is going towards the most important issues. This goes for inside the hotel, and also when you respond to online reviews.

Time is precious in this industry, and you need to spend it seeking the biggest benefit for your business.

Hotel guest loyalty: Key takeaways

  • Some advantages of a loyalty program include improved guest experience, increased bookings, cost effectiveness, boosted revenue, valuable insights, and corporate business
  • Remember that every traveller is unique and personalisation is key
  • The best programs find a way to break through and stand out. It’s important to consider the mindset of the traveller coming through the door and think about how you will really satisfy their particular needs
  • To help build customer loyalty you need to be a global player, make experience personal, and rewards customer loyalty
  • Try to be as original and authentic as possible, rather than generic or formulaic
  • Make redemption quick and easy
  • You’ll win loyalty when you give guests an experience that exceeds their expectations
  • The behaviours, attitudes, and expectations of today’s traveller are constantly changing. Couple this with an overwhelming case of brand saturation and it’s not surprising many believe loyalty is dead
  • What some hotels have forgotten is that customers are loyal to service and value, not simply to price.

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