With so many brands and properties competing against each other, it can be difficult for hotels to retain guests and encourage them to stay more than once — especially during such trying times. Not only that, but there are a ton of factors that go into hotel customer loyalty, including customer experience, value, guest benefits, and more.
In this blog post, we answer your questions about hotel customer loyalty and show you how to increase profits by improving your guest retention marketing. We give you a comprehensive view of what customer loyalty is, how it’s built, and demonstrate the difference that including a reward program in your business strategy can make.
Everything you need to know about hotel customer loyalty
What is customer loyalty?
At its highest level, customer loyalty is when a person gives repeat business to a brand or company. In other words, loyal customers are those who choose one company, location, or program over other available options. Sometimes, even when prices are higher, or policies are more strict, loyal customers still stand by their preferred option, regardless of cost or convenience. Loyal customers tend to trust in the quality they will receive, so they’re willing to spend a few extra dollars to ensure their expectations are met.
Customers have become more vocal about their service standards and actively seek out brands and businesses that align with their standards. As a result, more businesses may offer rewards for loyal customers in an attempt to capture their continued business. On average, companies implement new loyalty programs at the rate of 9% each year, according to MIT Sloan Management Review. Additionally, worldwide loyalty program membership grew by 26.7% between 2012-2014 alone, per Accenture.
Why does customer loyalty matter?
Every successful business is always working to accomplish two goals: retaining existing customers and attracting new customers. And the same thing goes for hotels.
Guest loyalty should always be at the forefront of hoteliers’ minds, as it helps foster an environment that allows for sustainable growth. When guests continually return to a property, not only does the hotel benefit from boosted occupancy and revenue, it allows hotel staff to develop relationships with guests. This helps staff better anticipate guest needs and can set a property up for a better guest experience.
What does customer loyalty look like in the hotel industry?
From a hotel’s perspective, customer loyalty is the result of superior service. It's a result of guests consistently receiving excellent service and knowing that their needs will always be met when they book with their trusted brand. When you start to see guests frequently at your property, and they become familiar faces, it’s quite likely that they have become loyal customers.
Hoteliers will also be able to spot customer loyalty in guest feedback and reviews. It might be surprising to see just how many guests leave reviews that say things like, “I stay here all the time and I love it! It’s always clean and the customer service is great!” Loyal customers love to talk about their trusted brand and are likely to make recommendations to friends and family.
When shoppers, travelers, or other consumers are exploring options, they often look to current and past customers for input. In fact, according to a BrightLocal study, 87% of consumers read online reviews for local businesses, and the hotel industry ranks No. 2 among industries in which consumers are most likely to have read reviews.
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Hotels are not tangible products that customers can assess by testing prior to actually staying at the property. Therefore, travelers often rely on word-of-mouth referrals or high-ranking online reviews. And in many instances, guess who's leaving those reviews? Loyal customers. They also post, share photos, provide recommendations on social media, and much more.
How do hotel loyalty programs work?
Hotel loyalty programs reward guests for spending money at their property. Typically in the form of points, members earn rewards based on nights booked or money spent. These points can be used toward future stays, room upgrades, dining discounts, and more. Some hotel rewards programs even reward members for shopping with affiliate brands or using credit cards they partner with.
How is hotel customer loyalty built?
Hotels who are looking to build customer loyalty or increase guest retention should focus on improving hotel service, guest perception, and the guest experience. Hotels can build customer loyalty in many ways, including:
- Exceeding guest expectations
- Providing excellent customer service
- Responding to guest reviews and feedback in a constructive manner
- Making regular commitments to improvement
- Building relationships with frequent travelers
- Understanding what guests want from a hotel
- Providing guests with a personalized experience
Why should hotels reward loyal customers?
Hotels should reward loyal customers for a variety of service and revenue-related reasons. In addition to improving the guest experience and making your property a better place to visit, rewarding repeat guess will help hotels:
- Improve their position in the market
- Maximize RevPAR, ADR, and overall profits
- Develop more informed sales strategies
- Build a loyal base of repeat guests and boost occupancy rates
- Improve hotel performance and online rankings
- Develop better communication with guests
Seventy-seven percent of customers confirm that they will choose their loyalty brand over competing brands, according to MIT Sloan Management Review, even if it means spending a little more money. With the hospitality industry undergoing constant shifts, every hotel must strive to remain competitive, and a great way to do that is by capturing loyal guests.
What should be included in a hotel customer loyalty program?
A hotel customer loyalty program should allow guests to earn points easily as they stay and spend money at your property. The more they stay, the more they earn. Loyalty programs should make guests feel like valued members of your hotel family. Many hotels include a discounted rate strictly for rewards members. They also tend to offer a wide variety of value-based rewards.
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Successful hotel loyalty programs are quick and easy to join. Members should have no problem accessing their profile, tracking their rewards, or updating their personal information. Furthermore, guests love instant gratification. Make it easy to earn initial rewards fast.
Create a loyalty program that allows members to spend their points on things like:
- Overnight bookings
- Room upgrades
- Dining or hotel shopping expenses
- Discounts on area attractions
- Online shopping credits
- Cashback redemptions
Contemplate creating a tiered loyalty program for hotel guests. Tiered rewards build as guests book more stays and spend more money at your property. As the reward levels increase, include more no-cost rewards such as:
- Free laundry services
- Complimentary valet parking
- Select in-room amenities
- Complimentary early check-ins or late check-outs
- A guarantee that there will be no blackout dates on member rates
Regularly survey program members for valuable feedback. Ensure that loyal guests are receiving the benefits that matter most to them when they travel. Ask guests if there are rewards they would like to see included in the future.
What strategies can hoteliers use to increase guest retention?
Review the following strategies to identify which would be most beneficial for your property and consider including them in your sales and marketing strategy for the year.
- Review CRM reports for loyalty leads. Guest reports, corporate travel reports, and any other reports that will help you identify repeat guests. Who is spending the most time at your property? Are they travelling for company business? If so, perhaps that company has additional travelers in the area. Are there travelers whose stays fall just under the top-frequency tier? Engage with them to see if they stay occasionally at comp set hotels when in the area. If so, why?
- Create guest profiles and review stay histories for insights. Track special requests such as food or pet allergies, room type preferences, or issues they’ve experienced in their unique profile. When guests request gluten-free breakfast options, for example, make a note in their profile to ensure food options are readily available during their next visit. Mark guests who request feather-free rooms to ensure their future stays are allergen-free before they even ask.
- Apply guest feedback to future stays to guarantee you exceed their expectations next time. Double-up on cleanliness inspections for guests who frequently make housekeeping complaints. Check and recheck appliances, the television connection, and make sure the room is spotless. Take it a step further and leave a handwritten note in the room. Personally thank the guest for giving your team another opportunity to “wow” them.
- Get to know your VIPs and personalize their experience. Place thematic welcome baskets in rooms for VIPs who travel for all the college football games each year. Include a new tea flavor each stay for a frequent traveler who always has a mug in hand. Get creative with amenity ideas and help regular guests feel more welcome.
- Market to guests’ interests to encourage a personal connection with your property. Do you have a regular corporate guest who frequently hits the local golf courses in town? Surprise them with a certificate for a free round during their next visit. Encourage employees to engage with guests and uncover their hobbies, interests, and preferences.
- Understand what motivates repeat bookers. Is it price, convenience, location, or brand? Why do your frequent guests continually return to your property? Discuss hotel opportunities for improvement and ask if there’s anything you can do to ensure they always stay at your hotel.
Examples of successful hotel loyalty programs
The most well-known hotel brands have impressive rewards programs that consistently entice new travelers and encourage their best guests to continue to return. Review some of the most popular hotel loyalty programs to identify what they have in common, what sets them apart from one another, and which rewards appeal most to travelers.
1. IHG Rewards Club
Free to join, IHG’s Rewards Club Members can earn 10 points per dollar spent at the majority of IHG properties. IHG rewards include:
- Exclusive member discounts
- Complimentary internet access
- No blackout restrictions for rewards nights
The starter Club level evolves to Gold Elite, then Platinum Elite, then Spire Elite. Members earn rewards based on nights stayed and money spent with the brand.
2. World of Hyatt
The Hyatt umbrella includes over a dozen different hotel brands. Hyatt also boasts almost 1,000 properties in more than 65 countries. The World of Hyatt rewards program partners with other companies to provide their members with rewards.
Hyatt partners with companies like:
- MGM Resorts International
- Linblad Expeditions
- American Airlines (AAdvantage)
The World of Hyatt program awards members five points for each dollar they spend on overnight stays and qualifying room charges.
3. Hilton Honors
The Hilton Honors rewards program allows members to earn points in a variety of ways:
- Booking at Hilton hotels
- Dining out
- Transferring Amex Membership Rewards points
- Using a HIlton credit card
Honors points can be use to book room nights, rental cars, save on dining costs, and more.
Put this hotel customer loyalty guide to use today!
Up next, learn all about the power of hotel first impressions and how those first impressions can significantly impact customer loyalty.