Loyalty and Independent Hotels
INTRODUCTION
According to research published by Harvard Business Review, acquiring a new customer can cost 5 to 25 times more than retaining an existing customer. In addition, loyal customers tend to spend more over time. In the context of hospitality, where the customer experience is paramount, loyalty takes on even greater importance as it contributes significantly to reputation, word of mouth and the economic sustainability of the business.
Types of Loyalty Programs
Loyalty in the hospitality industry is critical because loyal customers are more valuable over time, generating recurring revenue for a hotel or hotel chain, often for years or even decades. Repeat customers tend to cost less in marketing and distribution because they are more likely to book directly, avoiding the commissions of OTAs (Online Travel Agencies) and the need for expensive Google advertising. This grants greater financial flexibility, which can be invested in other priorities.(https://hospitalityinsights.ehl.edu/emotional-skills-hotel-customer-loyalty-2030).
To build loyalty, hotels should focus on:
Exceed guests' expectations
Providing excellent customer service
Respond constructively to reviews and feedback
Constantly strive for improvement
Building relationships with frequent travelers
Delivering a personalized customer experience
(https://www.cvent.com/en/blog/hospitality/hotel-customer-loyalty)
Effective Strategies
Review CRM reports to identify retention leads: guest reports, corporate travel reports, and any other reports that help you identify repeat guests. Who spends the most time at your facility? Do they travel for corporate business? If yes, perhaps the company has other travelers in the area. Are there travelers whose stays fall just below the maximum frequency range? Try to find out if they occasionally stay at participating hotels when they are in the area. If yes, why?
Create guest profiles and review stay histories for information: track special requests, such as food or pet allergies, room type preferences, or problems they experienced in their unique profile. When guests request gluten-free breakfast options, for example, note them in their profile to ensure that food options are readily available during their next visit. Mark guests who request feather-free rooms to ensure that their future stays are allergen-free before they even ask.
Apply guest feedback to future stays to ensure that you exceed their expectations next time: double cleaning inspections for guests who frequently complain about housekeeping service. Check and recheck appliances, television connection, and make sure the room is spotless. Go a step further and leave a handwritten note in the room. Thank the guest personally for giving your team another opportunity to "wow" them.
Get to know your VIPs and personalize their experience: put themed welcome baskets in rooms for VIPs who travel to all college football games each year. Include a new flavor of tea with each stay for frequent travelers who always have a cup in hand. Be creative with amenity ideas and help regular guests feel more welcome.
Leverage guests' interests to encourage a personal connection with your facility: do you have a regular corporate guest who frequently visits the city's golf courses? Surprise them with a voucher for a free round during their next visit. Encourage employees to engage guests and find out about their hobbies, interests and preferences.
Understand what motivates repeat customers: is it price, convenience, location, or brand? Why do repeat customers continually return to your facility? Discuss opportunities for hotel improvement and ask if there is anything you can do to ensure that they always stay at your hotel.
(https://www.cvent.com/en/blog/hospitality/hotel-customer-loyalty)Tiered Loyalty Programs: Implementing loyalty programs that offer increasing benefits as guests move up the tier can make the program more exciting and make customers feel more valued. These programs can be especially valuable for high-end establishments seeking to increase customer retention.(https://mediaboom.com/news/customer-loyalty-in-hospitality/)
Collaborations between Companies: Partnerships, such as between airlines and hotel chains, can provide more value to loyal customers, creating a win-win situation for all parties involved. Identifying what each customer values and providing benefits through partnerships can change the loyalty landscape.
(https://business.cornell.edu/hub/2021/08/06/what-keeps-us-coming-back-how-to-build-customerloyalty/)Emotional Skills: By 2030, emotional skills are expected to be key to customer loyalty in hospitality. Services that "surprise and delight" guests through highly personalized touches will be crucial. This requires employees to be able to anticipate a customer's specific needs or desires before they are expressed, requiring a high level of emotional intelligence
(https://hospitalityinsights.ehl.edu/emotional-skills-hotel-customer-loyalty-2030)Personalization through Data and Technology: Using AI-driven data for personalization based on customer behavior can significantly increase customer loyalty. This includes understanding customer intentions, motivations, and feelings to deliver true personalization that meets the needs of travelers in this new era of travel.
(https://business.cornell.edu/hub/2021/08/06/what-keeps-us-coming-back-how-to-build-customerloyalty/)
TYPES AND EXAMPLES OF LOYALTY PROGRAMS
Types of Loyalty Programs
Surprise and Delight: These programs aim to create a meaningful emotional connection between the consumer and the brand through unexpected rewards, such as free gifts, upgrades, or significant discounts. The goal is to make guests feel truly appreciated by basing rewards on individual guest profile data to offer personalized rewards.
Cashback and Points: These programs are based on the accumulation of points for stays or expenditures made, which can be redeemed for future stays, room upgrades, dining discounts and more. It is a formula that speaks directly to consumers seeking tangible benefits.
Additional Rewards: They offer exclusive experiences that are not available to non-participants, such as delayed check-outs or unique local experiences. This approach adds value to guests' experiences, enriching their stay with unique services and opportunities.
(https://www.amadeus-hospitality.com/guest-loyalty/)
Effective Strategies for Loyalty Programs.
Offer Excellent Rewards: Rewards should be relevant and desired by customers, ranging from loyalty points to free or discounted products or services. It is important to explore different rewards to find out what works best for program members.
Creating an Emotional Connection: Customer loyalty often stems from an emotional connection to the brand, which can be strengthened by showing care and sharing customer values. This aspect is critical to making the brand an integral part of consumers' purchase decisions.
Optimize Loyalty Programs: Making the loyalty program accessible digitally and through various channels can significantly increase customer engagement, making it easier for customers to interact with and benefit from the program.(https://business.monetha.io/blog/customer-loyalty/programs-best-practices/)
Recognizing Your Guests: Recognizing repeat guests and treating them as important members of the hotel family is essential. Using the property management system (PMS) to track frequency of stays and spending allows you to identify your most loyal and valuable guests.
(https://www.cloudbeds.com/articles/hotel-guest-loyalty/)
IMPLEMENTATION OF A LOYALTY PROGRAM
Analysis and Planning: First, it is critical to conduct a detailed analysis to understand your guests' needs and expectations. This helps you outline clear goals for your loyalty program and decide what types of rewards to offer.
(https://buildwithstudio.com/blog/hotel-loyalty-program-guide-for-hoteliers/)(https://www.eventtemple.com/blog/how-to-build-a-successful-hotel-loyalty-program)Selection of Program Type: There are several types of programs to consider, such as points-based programs, partnership rewards, or customized rewards. Each type has its own benefits and can be chosen based on the specific needs of your hotel and your guests.
(https://www.ezeeabsolute.com/blog/hotel-loyalty-program/)Change Management: The introduction of a new loyalty program requires careful change management within the organization. It is important to involve all team members, from reception to marketing, ensuring that they are informed and trained on the new procedures and technologies.
(https://buildwithstudio.com/blog/hotel-loyalty-program-guide-for-hoteliers/)Technology and Security: Be sure to invest in secure software to protect your guests' personal data. Trust is a crucial element in building long-term relationships with guests, and the security of their data should never be put at risk.
(https://www.eventtemple.com/blog/how-to-build-a-successful-hotel-loyalty-program)Marketing and Promotion: Use effective marketing strategies to promote your loyalty program, attracting guests' attention and encouraging them to sign up. Remember that personalization is key to creating a unique experience that stimulates loyalty(https://www.ezeeabsolute.com/blog/hotel-loyalty-program/)
These approaches not only help build lasting relationships with guests but also contribute to overall success and brand differentiation in the competitive hospitality market.
MANAGEMENT AND EVOLUTION
Measurement and Evaluation: It is essential to regularly monitor the performance of the loyalty program to ensure that it is achieving its goals. This includes analyzing enrollment rates, rewards utilization, and guest satisfaction.(https://buildwithstudio.com/blog/hotel-loyalty-program-guide-for-hoteliers/)
Feedback and Adaptation: Gathering feedback from guests is vital to the evolution of the program. Use these insights to make continuous improvements, ensuring that the program remains relevant and attractive to your guests.
(https://buildwithstudio.com/blog/hotel-loyalty-program-guide-for-hoteliers/)Collaborations and Alliances: Consider forming alliances with credit card companies or other business partners to expand your loyalty program offerings. This can increase value for guests by providing them with more opportunities to earn and redeem points.
(https://rategain.com/blog/hotel-loyalty-programs/)
Implementing and managing a loyalty program requires constant effort and adaptation to the evolving needs of your guests. By keeping the focus on the guest experience and leveraging the appropriate technologies, you can create a program that not only increases guest loyalty but also hotel profits.
INNOVATIVE METHODS FOR STRENGTHENING GUEST LOYALTY IN HOTELS
Personalization of Room Options: Offering guests the ability to customize elements of their room, such as bedding or wall art, can significantly increase their satisfaction. Customization can also extend to in-room entertainment, such as streaming services or virtual reality experiences, to meet the entertainment needs of modern guests.
(https://hoteltechreport.com/news/hotel-guest-experience)
(https://www.hijiffy.com/resources/articles/best-hotel-guest-engagement-ideas-and-strategies)Virtual Concierge Services: Implementing a virtual concierge in each room improves convenience for guests by allowing them to control room features, such as temperature and lights, or order room services through digital devices.
(https://www.hijiffy.com/resources/articles/best-hotel-guest-engagement-ideas-and-strategies)Customized Dining Options: From personalized dining recommendations to themed dining experiences and cooking classes and tastings, offering unique dining experiences can completely transform the guest experience. Adding customized menus for guests with special dietary needs can make each guest feel truly cared for.
(https://www.hijiffy.com/resources/articles/best-hotel-guest-engagement-ideas-and-strategies)Innovative Technologies for Engagement: Smart rooms that allow guests to control various aspects of their room through smartphones or in-room tablets are now a reality. These systems not only provide convenience but also contribute to energy efficiency. Other technologies such as guest messaging, the use of AI chatbots to provide instant answers to common questions, and experience-based loyalty programs are all ways to strengthen loyalty.
(https://digitalguest.com/hotel-innovation/)Contactless Check-in and Check-out: Introducing contactless check-in and check-out procedures through mobile apps or the web improves guest safety and convenience, making the process smoother and more efficient.
(https://digitalguest.com/hotel-innovation/)Data Analytics for Personalization: Using data analytics to gain insights into guests' preferences and behaviors allows us to offer tailored experiences and recommendations, further enhancing their experience and loyalty.
(https://digitalguest.com/hotel-innovation/)
Incorporating these innovative elements into your loyalty program will not only enhance the overall guest experience but also help increase their loyalty to your brand. These strategies demonstrate a commitment to innovation and guest comfort, key points for standing out in the competitive hospitality industry.
LOYALTY AND INDEPENDENT HOTELS
For small and medium-sized independent hoteliers in Canton Ticino looking to implement effective loyalty strategies, there are several practices they can adopt to stand out and retain their guests, even without the resources of large hotel chains.
Creation of Customized Loyalty Programs: Instead of adopting standard point schemes, independent hotels can offer immediate, personalized rewards that reflect the hotel's unique values and characteristics. This can include free gifts upon arrival, such as a box of chocolates or a bottle of wine, or perks such as free WiFi, priority check-in, and free room upgrades. Personalization and attention to detail make these programs particularly attractive.
(https://blog.netaffinity.com/independent-hotels-loyalty-program)Using CRM to Manage Loyalty Program: Using a CRM (customer relationship management) to create and manage your loyalty program can help you offer a unique offering and drive direct bookings, providing invaluable benefits in the long run. It is important that your loyalty program is tuned to your guests and offers immediately assessable and personally relevant benefits.
(https://blog.netaffinity.com/independent-hotels-loyalty-program)Taking advantage of Flexibility: The lack of corporate standardization gives independent hotels the freedom to experiment with their loyalty programs. This allows them to quickly adapt to guest feedback and modify the benefits offered according to their wishes, increasing engagement.
(https://www.mews.com/en/blog/independent-hotels-loyalty-programs)In-Depth Knowledge of Guests: By being able to interact directly with guests, independent hoteliers can gain a deep understanding of their preferences. This knowledge can be used to further personalize the loyalty program and offer benefits and rewards that they know will be appreciated.
(https://www.mews.com/en/blog/independent-hotels-loyalty-programs)Unique and Localized Benefits: Independent hotels can offer benefits that large chains struggle to replicate, such as exclusive events, wine tastings or selected local products. These local and exclusive touches can be a strong differentiator.
(https://www.mews.com/en/blog/independent-hotels-loyalty-programs)Pricing Flexibility: Having the ability to offer special rates to loyalty program members can be an effective way to compete with large chains. This approach allows you to offer competitive pricing that is specific to program members, further improving the perceived value of the loyalty program.
(https://www.mews.com/en/blog/independent-hotels-loyalty-programs)Experiential Integrations: Beyond free Wi-Fi access, which is now considered a given, hotels can explore incentives related to repeat bookings, such as free nights, credits in the hotel restaurant, premium in-room amenities, and others based on location and hotel-specific features. Integrating a property management system (PMS) that supports these loyalty programs can simplify management and deliver a high-quality guest experience, keeping independent hotels competitive
Small and medium-sized independent hotels can face several challenges in implementing loyalty programs, such as selecting the right technology that aligns business objectives and effectively manages communication channels with customers. Ensuring that program design authentically reflects brand identity and considering the variability of customer segments is critical. In addition, it is crucial to prepare for unforeseen crises, such as third-party vendor bankruptcy, and prioritize channels that play a key role in the customer experience. An approach based on simplicity, trust-building, and careful involvement of staff while considering fraud risks can contribute to program success.
LOYALTY AND TECHNOLOGY
For independent hotels looking to implement an effective guest retention strategy, several technologies can make a big difference. Here are a few that can be particularly useful:
Property Management Systems (PMS): Solutions such as Cloudbeds, Opera PMS, and Mews facilitate reservation management, check-in/check-out, and can integrate with other tools to provide a 360-degree view of guest preferences and history.
Guest Communication and Messaging Platforms: Tools such as Whistle, Zingle, and HiJiffy enable hotels to communicate efficiently with guests through SMS, email, or chat, improving customer service and personalizing the guest experience.
Loyalty and CRM Programs: Solutions such as Revinate and Guestfolio offer hospitality-specific CRM capabilities, helping hotels create and manage loyalty programs, personalized email campaigns, and detailed analysis of guest behavior.
Guest Feedback and Review Platforms: Tools such as TrustYou and Revinate Insights collect guest feedback and reviews, providing hotels with valuable data to improve the experience and increase guest satisfaction.
Data Analytics Solutions: Platforms such as Duetto and RMS Cloud use data to optimize pricing, availability, and predict booking trends, helping hotels make informed decisions to attract and retain loyal guests.
Marketing Automation: Tools such as MailChimp and HubSpot can be used to create automated and personalized email marketing campaigns, keeping guests engaged and informed about special offers, events and news.
By integrating these technologies, independent hotels can build a robust and personalized guest retention strategy that not only enhances the guest experience but also helps build a lasting relationship and increase guest retention.
SUCCESSFUL CASE STUDIES
Hotel chains
1. Marriott Rewards: Marriott has introduced an innovative approach by allowing guests to earn loyalty points through social media interaction. Guests can earn points by posting on Twitter, checking in on Facebook, or uploading a photo to Instagram with a predefined hashtag. This not only increases brand awareness but also engages a growing demographic of millennials with significant social influence.
(https://blog.guestrevu.com/3-innovative-loyalty-programs-to-be-inspired-by)
2. Wyndham Rewards: Wyndham's program uses an intuitive tier system that motivates guests to reach affordable and progressive loyalty goals. As members level up, the benefits become more luxurious and exclusive, turning the loyalty program into a fun and engaging game.
(https://blog.guestrevu.com/3-innovative-loyalty-programs-to-be-inspired-by)
Independent hotels
The Guestbook: For independent hotels, The Guestbook offers an innovative guest loyalty solution based on cash rewards for direct bookings. This system encourages returns and loyalty by offering guests 5 percent cashback, the opportunity to donate to a charitable cause or accumulate credits for future bookings. It is an effective example of how an independent hotel can use direct financial incentives to build customer loyalty without having to be part of a larger chain or traditional loyalty program.
LaaSie.ai: Although not specifically mentioned in the articles consulted, LaaSie.ai is an example of how innovative software can support independent hotels in implementing personalized loyalty programs. LaaSie.ai uses artificial intelligence to offer personalized rewards to guests based on their individual preferences and reservation value, thereby promoting loyalty and increasing direct bookings.
Both examples illustrate how independent hotels can adopt creative and technological approaches to develop loyalty programs that offer real value to guests, differentiating themselves in the competitive hospitality market.