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Loyalty Programs are Your Friend

Giving your hotel guests perks can give you a steep revenue increase.

In the competitive hotel industry, establishing and maintaining a loyal customer base is crucial for sustained success. Loyalty programs are essential tools for hotels, offering a variety of benefits to both guests and hoteliers.

The influence of loyalty programs cannot be stressed enough.

A study from research firm Phocuswright found that three-fourths of hotel bookings are linked to these programs. Cornell University’s Center for Hospitality Research supports the proven success of loyalty programs. Its researchers found that loyalty programs correlate with a 57 percent increase in room revenue. Also astonishing: “Loyalty program members booked more than half of Marriott’s global room nights from 2019 to 2021.”

These findings all highlight the crucial role these programs play in attracting and retaining guests. The statistics show the fact that loyalty programs have become a significant part of the decision-making process for a large fraction of hotel guests. Hotels without loyalty programs could miss out on a plethora of potential bookings. If large hotel conglomerates like Marriot can point to loyalty programs as a notable tool behind their success, you can too.

Various hospitality and marketing studies have concluded that personalization in marketing is extremely effective. Loyalty programs allow hotels to provide just that, giving hotels the ability to showcase their offerings based on individual guests’ preferences. By collecting and analyzing data on guest preferences through these programs, hotels can customize their services, recommend relevant amenities, and can promote deals more relevant to any particular guest.

It’s important to pick a program method that works for you and your business. Here are a few options to look into…

1. Points-Based Programs

This is the most common type of loyalty program where guests earn points for their stays.

Points-based loyalty programs are widely adopted in the hotel industry due to their simplicity and effectiveness. Guests earn points for each stay, and these points can be redeemed for various enticing rewards.

The rewards range from complimentary nights and room upgrades to dining vouchers, and exclusive discounts. The accumulation of points can be based on different criteria like the number of stays, allowing guests to earn rewards at their own pace. This type of loyalty program provides a clear benefit to guests, incentivizing them to choose the hotel for future stays.

2. Tiered Programs

Hotels can create tiered loyalty programs to recognize and reward guests based on their level of engagement. As guests move up through different tiers (silver, gold, platinum, etc.), they unlock additional benefits like early check-in, late check-out, and access to executive lounges.

By recognizing and rewarding guests based on their tier level, hotels can incentivize customers to stay more frequently and achieve higher levels. Tiered loyalty programs encourage guests to spend more to attain higher tiers, resulting in increased revenue and customer satisfaction for the hotel.

3. Partnerships

Hotels can collaborate with other businesses, such as airlines, car rental companies, or retail outlets to offer cross-promotional benefits. This grows the value for loyalty program members, allowing them to earn and redeem points beyond hotel stays.

If you’re running a smaller, more local hotel – don’t fret over not getting big-name collaborations. Try partnering with local restaurants and attractions. If a guest visits a mom-and-pop shop down the road, maybe they get extra points, a discount on their next stay, spa discounts, or an extended check-out time. Is there a local fair or concert? You could offer free or discounted tickets, food, or merchandise to guests who book their rooms within a certain time frame.

These three forms of loyalty programs are just the tip of the iceberg. If you don’t think they’ll be effective for your business model, don’t feel limited.