The hospitality industry has always faced a unique challenge that most other industries don’t have: Repeat customers are hard to come by. Studies show that around 90% of all hotel guests never return for a second stay.
Some of the reasoning for this is understandable — many guests are visiting from far away, and people often like seeing new places when they travel. However, times are changing. In the post-pandemic world, many people are opting to return to familiar places that they trust. And as marketing evolves, customers are becoming more loyal to brands they like. Furthermore, recent technology is making it possible to capitalize on these trends in the form of loyalty programs. Brands that can use loyalty programs effectively to unlock the potential of repeat guests can gain a significant edge over the competition.
So what makes a successful loyalty program? Hoteliers have options when it comes to rewarding repeat customers, and finding the right program to suit your audience and brand is necessary for success. Hoteliers need to ask themselves a few questions: What type of guests are staying at your hotel? What are they looking for when they stay? Determining who your guests are and what they want will help you create the right system to reward them. Here are the most common types of hotel loyalty programs:
Point programs are very popular and are frequently used in other industries. Every time a guest books a stay or purchases ancillary offerings, they earn points — usually based on the amount of money they spend. Points can then be redeemed for certain rewards, with more valuable rewards available for more points. Possible rewards could be complimentary stays, meals, late checkout, or room upgrades.
This type of program provides some great benefits. First of all, it’s easy for the guest to understand, which is a key factor in enticing users to sign up. It’s also great for hoteliers because rewards are only given after guests start spending money. More valuable rewards are only given away after a significant amount of money has been spent.
One potential issue for point programs is that users often need to make multiple purchases before getting any benefits, which means guests who travel less frequently might not bother signing up. Tiered loyalty programs solve this issue by giving customers immediate rewards upon signing up. See an example of a hotel’s tiered loyalty system below: