Whether it includes large rewards or small recognitions, a loyalty program can have a big impact on your guests-and your bottom line. Not only do loyalty programs reward repeat customers, they provide a competitive advantage to hotels in an evolving landscape of boutique hospitality experiences and Airbnb options that offer greater cultural submergence and community exposure.
Pretty much every major hospitality brand has its own loyalty program, and even independent properties and smaller operations have found value in employing a way to reward repeat customers. The Marriott Bonvoy program, one of hospitality's top loyalty programs right now, rewards members with loyalty points when they stay with any of Marriott's 29 affiliated brands. Similarly, members of the highly rated Wyndham Rewards program earn points when staying in any Wyndham Hotels & Resort property. Plus Wyndham Hotels & Resorts have deals with several popular airlines allows rewards members to earn miles or points while traveling.
Loyalty programs aren't new. We really owe the emergence of loyalty programs to the golden era of hospitality and aviation, the mid-century, which brought about a new level of excitement and opportunity for travel. And they've stuck around for a reason: rewards are a tried and true way to generate return customers, increase savings and curate better guest stays. According to Trivago, "loyalty program members account for three-quarters of hotel website bookings."
So how do top hotels curate great loyalty programs? And what makes these programs so important? Read on to learn more.
Repeat Business is Good Business
One of the greatest benefits of employing a guest-focused loyalty program at your property is the repeat business it can generate. When customers feel rewarded for staying with you, they're more apt to come back-in other words, if you're loyal to your customers, they'll stay loyal to you. Repeat guests continue to be great for hotel revenue.
A Cornell University study of two independent hotel loyalty programs "demonstrated a notable lift in patronage after guests joined the program." The study found that "the number of annual room-nights for each guest increased by nearly 50 percent... increasing total revenue per year per enrolled guest by a similar amount." And, to top it all off, HubSpot notes that existing customers spend 67% more than new customers.
So make sure your loyalty program focuses on your guest and rewards them for their continued business. Employees at your hotel can contribute to rewarding these guests by keeping track of those guests who repeatedly stay at your properties-if you have a guest-management service or hospitality management software (like ours!), you can keep track of guest information and use it to ensure that your rewards members feel recognized. Even something as simple as acknowledging repeat guests by name can make all the difference in guest satisfaction.
Savings at Every Level
Not only do repeat customers from loyalty programs increase your bottom line-they ultimately save you money. HubSpot notes that it costs 5-25 times more to acquire new customers than it does to sell to existing ones. But rewards programs save money in other ways too. Trivago notes that 43% of loyalty program members book directly through the hotel’s website, while only 20% of travellers that are not enrolled in a loyalty program do the same. And direct bookings are incredibly valuable if your hotel is paying commissions to booking sites.
Additionally, loyalty programs that capitalize on encouraging reduced waste and "greener," environmentally friendly, guest practices can also produce significant savings. For example, IHG's Greener Stay program encourages green guest behaviors like reusing towels and reducing water waste, which saves their hotels resources and labor, among other things in exchange for loyalty points.
In much the same way your staff can recognize rewards members and make them feel valued for their repeat stays, your team can be involved in encouraging money-savings for your property through your rewards program. If you have a green rewards program like IHG, your team can encourage guests to reuse towels and use their "Do Not Disturb" signs when they don't want their rooms serviced. Some hotels even offer food and beverage vouchers upon check in for guests who want to opt out of housekeeping during their stay. Your staff can also remind members to book through the hotel's website next time they stay to keep rewards members booking directly with you.
Tailoring Better Guest Stays
A Cornell University School of Hotel Administration study points out that "a major benefit of reward programs is the rich customer data they can provide." Hotels can use loyalty program data to improve these programs overall and support marketing efforts. Plus member information can be used to improve customer service and enhance or even customize guest stays.
Customers are more receptive to sharing data in recent years too. An rDialogue brand loyalty study found that "41% of retail loyalty members are willing to share information about themselves in exchange for relevant discounts and offers." On top of that, 79% of consumers actually only consider brands that show they care about their individual wants and needs.
Data gleaned from reward program enrollment can help you to provide better service recovery by utilizing points and rewards to resolve customer complaints and maintain guest satisfaction. Your team can play a direct role in this by ensuring that rewards members get the proper points values to resolve complaints or issues. You and your team can then use systems like Quore to track any complaints and monetary or reward-points values to monitor how your hotel is improving guest satisfaction overall and what can be done better in the future.
Customers Value Rewarding Experiences
rDialogue found that "while consumers still view and express loyalty in transactional terms, they increasingly place value on the experience, especially time and convenience, which they actually value more than earning loyalty points, benefits and recognition." You and your team can ensure that rewards members feel like they're getting unique experiences by offering member-only opportunities or experiential discounts.
Some hotels do this by teaming up with local attractions to offer promotional discounts for loyalty members. Other properties are able to offer unique, in-house dining experiences or member-only parties and events. But creating a unique experience for a loyalty member can be as simple as leaving a hand-written note in the guest's room with suggestions on places a guest could visit while they're in town! These kinds of personal touches lend to that feeling of recognition and importance we spoke to earlier.
Better Loyalty, Happier Guest
Whatever you choose to do to encourage guest loyalty, it's a great way to gain repeat business, save money, increase guest satisfaction and curate better guest experiences. You can encourage staff to support your loyalty program by helping them to find creative ways to recognize loyal guests!
Look for unique opportunities for your property to offer little perks for rewards customers. For example, maybe create custom goody bags for rewards members. Or offer small treats like cookies or candies waiting in a member's room. Even just a personalized thank-you note or hand-written message can go a long way toward making loyal guests feel valued. Everyone at your hotel can help to make your property stand out for rewards members.
For more industry information, check out our blog.