Your Loyalty Program and the Guest Experience

How loyalty programs can help you collect and use data to keep guests coming back again and again.

A loyalty program isn’t just for huge hotel chains: it can work for smaller hospitality companies and boutique hotels too. In fact, a loyalty program is a great way to collect data that can help you to better understand your guests and offer more personalized service.

Why put the effort into starting a loyalty program? Hotel industry data shows that it can cost five times as much to gain a new guest as it does to retain a previous guest. And the cost of guest acquisition is rising, thanks in part to the wide availability of travel review sites that allow travelers to shop around extensively before they book.

A loyalty program will help you collect information so you can analyze guest behavior, offer targeted deals and improve the guest experience at your hotel. “A good hotel loyalty program has the opportunity to change a business into a ‘home away from home,'” according to Lana Hantuli, author of “An Analysis of Hotel Loyalty Programs: a Case Study on the Hilton HHonors Loyalty Program.” She adds: “Guest loyalty programs are the bridge between the guest and the hotel. They are the platform for communication, personal connections and long-term relationships between the members of the brand.”

Here are three ways a loyalty program can help you leverage data to understand your guests and retain their business to boost your profits:

1. Pinpoint guest habits. A loyalty program is a great way to collect basic information about your guests to learn more about their habits, desires and reasons for traveling. You can then use this data to create a “guest profile.” This extremely valuable tool will allow you to see who is visiting your hotel and why—for example, what percentage of your guests are business travelers, or couples on honeymoon or families on vacation. This information can inform a wide range of hotel management decisions, from decor to services to the deals you offer.
2. Target offers to guests. Collecting data through a loyalty program will allow you to use segmentation to tailor offers and deals to specific types of guests. This allows you to entice guests with deals, perks and rewards that will truly delight them and that they’ll want to use. In turn, this targeting will help your guests feel seen and understood, increasing affinity with your brand—as well as the likelihood that they’ll book again. For example, you could offer discounts to tourist attractions and family meal deals for families on vacation. You could offer happy hour deals or spa chair massages to business travelers. And you could offer steamy spa packages for two to couples who love to take romantic getaways.
3. Offer personalized service. Collecting data through your loyalty program will allow you to offer personalized service for a better guest experience. The data you collect will give you a variety of insights into specific guests, including: frequency of travel, room type and floor preferences, most desired perks, special needs, upsell purchases and more. You can then use this information to proactively offer each guest those services and perks that you already know they want or need. This could include rewards or upgrades tailored to their desires, along with upsells they’ll love and appreciate.

Hantuli notes: “By identifying the most essential needs, habits and desires of their guests, hotel owners … distinguish their brand from others while simultaneously increasing their market share.”