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A Guide to Hotel Customer Loyalty

November 21, 2023

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Customer loyalty is a relationship and not a scheme.

Putting the customer at the heart of everything you do, across every touchpoint, is the key to success. By strengthening the human connection, you can drive impactful business results.

Today, customers have higher expectations than ever, and we believe traditional loyalty programs must be rethought.

Increasing hotel customer loyalty is the ability to be at the top in customers’ minds and create a sense of allegiance. By delivering consistent experiences, hotels can redefine the guest journey.

That’s why hotels turn to loyalty programs to attract customers—and keep them.

In this guide, you’ll discover everything you need to know about hotel customer loyalty and strategies hoteliers can use to increase customer retention.

What is Customer Loyalty?

Customer loyalty in business refers to the sustained and positive relationship between the customer and the brand that develops trust, satisfaction, and a preference to choose them over others in the market.

Loyal customers are more likely to make repeat purchases, advocate for the brand, and provide valuable feedback, contributing to long-term success.

Why is Customer Loyalty More Important?

In today’s competitive hospitality market, establishing customer loyalty with your guests has become imperative, not an option anymore.

Let’s understand why customer loyalty is more critical for hoteliers.

1. Retain existing customers

Satisfied guests are more likely to return, providing a steady revenue stream and positive word-of-mouth recommendations.

2. Attract new customers

Attracting new customers is equally essential for hoteliers as it ensures growth and sustainability. New customers bring fresh revenue streams, expand a hotel’s reach, and become loyal patrons.

What Does Customer Loyalty Mean in the Hotel Industry?

Customer loyalty in the hotel industry refers to the willingness of the customer to repeatedly return to a hotel due to their delightful guest experiences with the brand.

A loyal customer will always choose your hotel over the other options in a particular location—also, the ongoing emotional relationship between you and your customer results in repeat business.

As the hotel owners focus on delivering the best guest experience, they strive to increase their loyal customer base. Hotel guests are loyal for various reasons, but it’s relatively easy to group them into the following categories:

  • Happy customers
  • Price loyal
  • Loyalty-program loyal
  • Convenience loyal
  • Loyal to complementary services
  • Truly loyal

It signifies a strong, ongoing relationship where guests choose to stay at the same hotel due to positive experiences, trust, and a sense of connection, leading to repeated bookings and brand advocacy.

Moreover, hotel owners focus on strategies for retaining existing customers and attracting new ones, which is essential for long-term success in the industry.

How do Hotel Loyalty Programs Function?

A hotel loyalty program encourages the customer to engage and use the services of a specific hotel brand based on rewards. These tactics are used for guest retention and new guest acquisition.

Different strategies to increase guest loyalty are used by hotels, depending on their size, budget, and target audience. Whether collecting points, providing value-added services, or spending a certain amount, a loyal program is an up-front deal you make with your customers.

Some hotels reward guests for shopping with affiliate brands or using credit cards they partner with to get discounts.

How a Hotel Builds Customer Loyalty?

As a hotelier, you must keep striving to develop relationships with guests, using different tactics and techniques that suit the best.

As customer loyalty offerings evolve from generic points programs, ensure the following aspects when building customer loyalty.

  • Easy to understand
  • Simple to join
  • Allows to earn points quickly
  • Provide relevant rewards
  • Drives engagement
  • Surprises and delights customers

Remember, Emotional loyalty goes a lot deeper, and customers go out of their way to honor their loyalty.

Hotels can build customer loyalty in many ways, including:

  • Meeting and exceeding guest expectations
  • Delivering exceptional customer service
  • Responding to reviews and feedback
  • Building relationships with frequent travelers
  • Understanding the preferences of guests
  • Providing personalized experience

While creating a loyalty program, the main motive is to maximize guest retention and acquisition. Also, building loyalty is not a one-time task; it happens due to multiple positive interactions, building a feeling of trust and credibility over time.

Why do Hotels Reward Loyal Customers?

Hotels have compelling reasons to incentivize and acknowledge their loyal patrons. Beyond enhancing overall guest satisfaction and elevating the quality of their establishment, loyalty programs generate higher ROI.

Loyalty programs reward guests, but why do hotels want to reward them? Here are some of the most common reasons hotels focus on rewarding loyal customers.

  • Improve their brand image in the market
  • Maximize profitability and revenue stream
  • Develop more informed sales strategies
  • Expand the loyal base of repeat customers
  • Boost hotel occupancy rates
  • Improve hotel rankings and performance
  • Attract and engage more customers

According to an MIT Sloan Management Review study, 77% of customers confirm that they will choose their loyalty brand over competing brands, even if it means spending a little more money.

What Components Should be Included in a Hotel Loyalty Program?

When building a customer loyalty program, hotels must follow the value-for-money mantra. It is the best way to please the customers and give them more than they think they are paying.

When we talk about structured reward programs that optimize the customer lifecycle and maximize revenue at every interaction, hoteliers must include the following components:

  • Points accumulation system
  • Exclusive discounts and offers
  • Room upgrades
  • Free nights
  • VIP amenities
  • Priority check-in/checkout
  • Dining and spa benefits
  • Partner program perks
  • Personalized services
  • Member-only events

A well-designed loyalty program engages with the customers and refers them to a product or service they would like to have as a reward. It will encourage positive behavior from satisfied guests, grow your hotel brand, and build a faithful customer base.

6 Strategies Hoteliers Can Use to Increase Customer Retention

In this hotel customer loyalty guide, we will tell you strategies to turn your guests into happy, satisfied, and loyal customers of your hotel brand.

Let’s explore the 6 best strategies for hoteliers to increase customer retention.

1. Evaluate CRM Reports for Insights into Loyalty Leads

Do you know which customer spends the most time at your hotel? And who is traveling for leisure? If so, you are on the right track.

CRM reports provide detailed insights into loyalty leads, such as guest booking history, spending patterns, and feedback, helping you identify high-value customers who repeatedly choose the hotel.

CRM reports enable the hotelier to prioritize retaining and nurturing these loyal leads, ultimately boosting revenue and profitability.

2. Develop Guest Profiles and Analyze Stay Histories for Valuable Insights

To analyze and confirm hotel guest loyalty, you must track special requests such as food, allergies, room type, services availed, issues, and detailed profiles of frequent guests.

Guest profiles can be quickly developed for future use purposes. For example, if a customer frequently orders vegan dishes, record this preference in their profile to anticipate and offer a tailored menu the next time they dine.

Also, for those who consistently request early check-ins or late checkouts at a hotel, proactively accommodate their scheduling preferences without reiterating their needs during future stays.

3. Utilize Guest Feedback for Future Stays to Ensure Exceeding Expectations

Guests providing positive or negative feedback offers valuable insights into their preferences and areas where improvements are needed. Analyzing this feedback allows the business to identify recurring themes, strengths, and weaknesses.

For example, if a customer provides feedback about slow service in a restaurant, implement a system where their orders are prioritized, ensuring quicker service during their visits. You can also have the manager visit their table and share a thank you note for their loyalty.

Another great example is when in a spa or wellness center of your hotel, if a guest repeatedly mentions a preference for aromatherapy or specific treatments, have these ready for them upon arrival and offer a loyalty discount to acknowledge their commitment to the establishment.

4. Familiarize Yourself with VIPs for a Personalized Guest Experience

VIPs are the best group of guests on whom hotels can build customer loyalty programs and strategies. Familiarizing yourself with VIPs is crucial for a personalized guest experience.

For example, suppose a luxury hotel knows a VIP guest’s favorite room, amenities, and dining preferences. In that case, they can ensure every visit exceeds expectations by preparing everything they like, from room setup to culinary choices, creating a memorable and unique stay.

5. Tailor Marketing Efforts to Guests’ Interests for a Personal Connection

Align your hotel marketing strategy with guests’ interests and develop a deeper connection with the customer. Personalized marketing builds trust and loyalty by demonstrating genuine interest in guests’ needs and desires.

For example, you are sent exclusive invitations to special culinary events featuring renowned vegetarian chefs in response to the guests’ interest in plant-based cuisine.

6. Identify the Motivations of Repeat Bookers for Improved Engagement

One of the most effective ways to improve engagement is to identify the motivation behind repeat bookings and visits to the hotel.

For example, customers might prefer your hotel due to price, convenience, location, or brand. Explore these aspects and create a hotel customer loyalty program that can work to strengthen their bond with the hotel further and ensure maximum stays.

Examples of Successful Hotel Loyalty Programs

Some of the largest hotel chains in the world have impressive rewards programs that encourage their guests to continue returning.

We’ve reviewed some of the most successful hotel loyalty programs, what they offer guests, and how the reward appeals to the customers.

The World of Hyatt

Hyatt simplifies loyalty with three elite tiers that guests can unlock with qualifying activities every time they visit. Anyone can be a member of World of Hyatt for free.

Their loyalty program can be described as follows:

  • Earn points for things you already enjoy with Hyatt – from stays to dining.
  • Redeem – Use your points for free nights, suite upgrades, a gourmet meal, a relaxing massage, or more.
  • Achieve – Three elite tiers unlock exceptional benefits like room upgrades, late checkout, Bonus Points, or more.

Hyatt’s digital amenities come to guests’ fingertips with their mobile app. Hyatt offers personalization of rewards as an exquisite experience for all its guests.

The World of Hyatt

Source: World of Hyatt

Hilton Honors

As a Hilton Honors member, you’ll receive exclusive perks when you stay at our more than 7,000 hotels worldwide — including excellent resorts and luxury and boutique hotels.

Regular members earn 10 points per dollar on Hilton purchases (with most brands of Hilton Honors) but earn bonuses with elite status.

Some of the loyalty programs offered by Hilton Honors:

  • Get the Best Mid-Tier Elite Status for Under $100
  • Hilton’s Points Pooling Feature Rocks
  • Spend Your Way to Diamond for $40K
  • Get the 5th Night Free on Award Redemptions

Hilton Honors

Source: Hilton Honors

Marriott Bonvoy

Marriott Bonvoy members earn 10 points per dollar at most hotels, and award nights range from 5,000 to 100,000 points each, depending on the hotel and whether it’s peak or off-peak timing.

Different rewards are offered based on membership tiers, such as:

  • Earn 10% more points on every eligible hotel purchase
  • Enjoy late checkout and sleep in longer
  • Room upgrades
  • Upon arrival, choose points, breakfast offerings, or amenities — varies by brand.
  • Dedicated personal Ambassadors are available to assist, in addition to our Anytime Ambassador team.

Marriott Bonvoy

Source: Marriott Bonvoy

Conclusion

Understanding and implementing hotel customer loyalty can be manageable. It is essential for the exceptional customer journey and experience, offering your guests optimal value.

Ensuring guests feel valued and appreciated through personalized experiences, loyalty programs, and special perks for repeat customers can go a long way in fostering loyalty.

Most importantly, it keeps guests engaged and informed about promotions and events. Also, respond to their feedback and address their concerns promptly to ensure repeat business. Lastly, staying competitive in pricing and up-to-date with industry trends and technologies are essential in retaining loyal hotel customers.

Without any doubt, hotel customer loyalty is a critical aspect of the hospitality industry. Now that you know the key strategies to cultivate and maintain hotel customer loyalty, start implementing them.

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