Ever since commercial airline travel became a widespread practice hotel loyalty programs have been an integral part of hospitality. With points based programs offering discounts of services being the most popular choice, the guest would often take any offer presented to them and would quickly sign up.
But online travel agencies (OTAs) have forced the hand of traditional hospitality providers by oversaturating the hospitality industry with independent hotels all vying for the loyalty of the same guests as traditional establishments.
This change has resulted in many hoteliers abandoning point based guest loyalty programs as hotel goers no longer see the appeal in them. This has, in turn, made the cost of maintaining such programs simply unsuitable for smaller chains and many are now looking for a fresh take on customer loyalty.
The True Value of Reward Programs
In order to truly understand why hotel loyalty programs are important for the hotel industry, we must consider the real value of guest retention. In recent days full occupancy has been easier to achieve than ever before, but this often comes at a lower rate-per- room cost, which undermines your bottom line and profit margin.
So, in order to build a healthy business model hoteliers must rely heavily on loyal guests whose value increases over time. Any plan aimed at retaining guests and driving up repeat bookings could be considered a hotel loyalty program, but in order for it to be successful, the needs and wants of both hoteliers and guests need to align and function in unison.
How Does Loyalty Benefit Hoteliers?
Many of the existing issues with hotel customer loyalty programs concern cost, and how much such a program can drag down your profit if unsuccessfully implemented. It can be tempting to turn away from the process completely but for the fact that attaining new guests is often a costly enterprise.
Having considered this, most experienced hospitality managers would prefer to invest the time and effort to build a successful loyalty program which can attract guests of higher value to the establishment.
How Do You Build Hotel Loyalty Successfully?
Curiously enough, the answer to this question comes from the ranks of independent hospitality providers. This is currently the most active sector of hospitality and as such the hub of guest loyalty. Independent hotel loyalty programs function on different principles than the ones offered by industry giants such as the Marriott and Hilton.
And while smaller and medium-sized hotel chains might have set their sights on the latter’s success, they might find that it is independent hotel loyalty that works best for them.
Independent hotels do not have the resources or brand power of chain hotels so they turn away from their methods. They think of what could make a guest give value to this program and actively push for its implementation. With any such programs, the guests are given the reward of their impending loyalty instantly.
They are often offered the option of signing up for a hotel loyalty program as soon as they go for the Book a Room button on the hotel’s website. And if that’s not an option then the hotel staff will reiterate the offer “Sign up now, and receive a reward” be it a gift card or some kind of gratis service goes a long way in encouraging guest loyalty.
This might seem like a wasteful way of spending resources since many of these guests might not actively reimburse the investment but that’s not really the case. Independent brands centre their unique loyalty programs around the idea of making the guest feel that their stay is being curated to their taste.
An innovative rewards program can build a feeling of exclusivity among guests, which drive up your online ratings like wildfire. It can help build up your brand name in ways that not even the most carefully crafted online marketing strategy can guarantee, while also ensuring that the guest has plenty of reasons to return to your establishment.
How Do Loyalty Benefit Guests?
When guests think of returning to an establishment, they do so because of value customisation. The best hotel rewards program is one that would offer a traveller the option of choosing their own loyalty rewards, the ones that would best suit their needs at the time of their choosing.
A successful hospitality loyalty program would also take into account how much guests spend and offer to bump up their loyalty benefits if they were to choose to spend more on your services. This would drive up the loyalty amongst your more affluent guests, while at the same time not alienating your other patrons.
The Basic Steps of Promoting your Hotel’s Loyalty Program:
- Build a database of e-mail information which can be used to promote and encourage loyalty;
- Train staff to understand your program and the ways in which to approach customers when promoting;
- Encourage guest reviews among loyal patrons;
- Encourage guests to share their experience on social media;
- Offer rewards in accordance with your guests’ spending habits.
Let's consider some examples of successful hotel guest loyalty programs and why they work:
Marriott Rewards offers guests the opportunity to earn points in a host of ways that promote the brand’s name including posting on social media. They are one of the larger brand names who also offer guests the option of downloading their hotel’s app through which guests could earn even more points. Hilton also chooses to go mobile, by uploading allowing members to download their self-service app, through which they can manage and moderate their stay.
Kimpton, on the other hand, has taken loyalty to a whole new level, by hitting close to home and creating extremely personal experiences for their guests. They achieve this by tracking guest spending habits on their property while cross-referencing it with any review or mention of their stay in their social media posts.
This overly friendly approach to generating guest interest is one of the loyalty innovations which has become increasingly popular in recent years, with big brands often applying more personable soft-sell techniques by engaging with guests across social media platforms and often making the news for their remarks.
The last of these examples borrows heavily from independent hospitality’s innovative loyalty programs by focusing on the value of the experience that they provide over the monetary reimbursement that a guest can receive. This strategy has resulted in a drastic increase in loyalty and guest satisfaction rates for Kimpton and if properly thought out can certainly do the same for others.