Mastering Hotel Loyalty Programs: Essential Guide for Hoteliers

The hotel industry is highly competitive. Going the extra mile by offering an attractive loyalty program can help hotels retain customers and acquire new ones. Loyalty programs offer reward points, perks, and more ensuring customers keep coming back to the hotel. They play an instrumental role in helping a hotel brand build a loyal customer pool. Some of the most popular hotel loyalty programs are Marriott with 192 million members and Hyatt with 173 million members. These numbers highlight the importance of great hotel loyalty

Understanding Hotel Loyalty Programs

A hotel loyalty program is one where hotels offer structured rewards, perks, and certain extra privileges to guests who frequently stay at their hotels. Hotel loyalty programs are essential for creating long-lasting relationships with visitors, encouraging return business, and raising levels of satisfaction. They encourage customers to select a certain brand by providing a variety of benefits like points, tiers of incentives, and customized experiences.

These customer loyalty programs increase customer lifetime, strengthen brand loyalty, and set hotels apart in a crowded market by providing real benefits and collecting insightful guest data. Hospitality loyalty programs are essential for drawing in new customers and keeping existing ones coming back over time in the era of customized experiences.

Benefits of Hotel Rewards Program

Some of the advantages of hotel loyalty programs are:

1. Better visitor experience:

If you have a loyalty program, you could make sure that regular guests are never forgotten. Acknowledging and catering to their preferences will make their stay seamless and enjoyable.

2. Increased bookings

Frequently, an appeal for incentives or immediate benefits is sufficient to persuade hesitant travelers to book. In this way, a loyalty program serves the dual purpose of drawing in new customers and retaining those you have already acquired.

3. Cost-effectiveness:

Compared to seeking for new customers, pursuing recurring business puts much less stress on your marketing and sales teams. Additionally, there’s a greater chance that devoted, returning customers would make direct hotel reservations as opposed to using an online travel agency, which will save you commission.

4. Increased revenue:

Returning customers are undoubtedly satisfied with the service they receive and are also more inclined to spend money on extras and other perks. If you continually demonstrate your worth, visitors will be content to part with their money.

5. Important insights:

By enrolling visitors in a loyalty program, you may create more profiles than ever before and populate them with a wealth of information. Understanding their tastes, passions, and behavior will help you draw in new visitors who are the ideal fit for your establishment.

6. Corporate benefits:

Since corporations are most likely to return to the same venue frequently, many businesses, travel managers, or event planners will select hotels that provide loyalty programs.

Types of hotel loyalty programs

1. Point-based loyalty program

In a point-based loyalty program, every stay earns points for the visitors, which they can then exchange for different benefits like free nights, upgraded accommodations, or other privileges. By rewarding guests for their loyalty, this strategy not only promotes repeat business but also helps them feel valued and appreciated. Hotel loyalty rewards programs like IHG Rewards Club, Hilton Honors, and Marriott Bonvoy boast sizable member bases and offer diverse redemption choices to accommodate visitor preferences.

Marriott Bonvoy, for example, is one of the top hotel loyalty programs; members can accrue points for stays at any of Marriott’s hotels and resorts across the globe. Points can be used for experiences, travel packages, free nights, and even upgrades in accommodation. Marriott Bonvoy is a point system that rewards loyalty and improves the entire visitor experience by offering more advantages as members advance.

2. Tiered loyalty program

Guests participating in tier-based loyalty programs receive incentives and privileges according to how much they spend and how engaged they are with the business. Upon reaching specific milestones or accruing points, visitors advance through various stages, including Silver, Gold, and Platinum. With progressively alluring benefits and advantages offered at each tier, visitors are encouraged to increase their spending and loyalty. These benefits could include freebies, late check-out, upgraded accommodations, or special access to activities or experiences only available to higher-tier members. Brands can satisfy the wide range of tastes and budgets of their clientele while simultaneously promoting engagement and loyalty by providing tiers of perks.

World of Hyatt offers a tiered loyalty program. Members advance through elite tiers (Discoverist, Explorist, Globalist) under the number of qualifying nights or base points they have accrued. Additional amenities like free breakfast, extra points, lounge access, and hotel upgrades become available with each tier. World of Hyatt successfully rewards devoted customers and motivates them to go for higher status levels by providing tiered prizes, which eventually improves customer happiness and loyalty.

3. Cashback programs

Cashback programs allow customers to collect credits or payback for their stays, giving them monetary rewards that they can utilize for future hotel stays or bookings. Guests can get instant advantages in the form of credits or cashback with this kind of loyalty program, which can improve their overall stay experience. Through flexibility in use, visitors can apply their awards for future stays, room upgrades, dining experiences, or other hotel services, whichever best matches their interests.

Orbitz Rewards is an example of a cashback program; users receive Orbucks for each dollar spent on eligible hotel reservations. Customers can save money on subsequent travels by redeeming these Orbucks for hotel stays or other travel-related expenses. Orbitz Rewards offers cashback rewards to visitors as a way to thank them for their loyalty and encourage them to make repeat reservations.

4. Co-Branded Credit Card Programs

Co-branded credit card programs refer to alliances between credit card firms and hotels that offer branded credit cards with benefits for both regular spending and hotel stays. With these credit cards, you can usually accrue points or prizes that can be redeemed for free nights, upgraded rooms, or other incentives, both inside the hotel and for purchases made outside of it. Hotels can use these co-branded credit cards to offer their customers more value and perks over and beyond what a regular credit card would, as well as to encourage guests to use their brand for lodging and other purchases.

Marriott Bonvoy American Express is a popular co-branded credit card program in the hotel sector. Cardholders can earn Marriott Bonvoy points for their spending at Marriott properties as well as on regular purchases thanks to the relationship between Marriott Bonvoy and American Express. Through the provision of these co-branded credit cards, Marriott Bonvoy enhances its relationship with cardholders, grows its clientele, and fosters brand loyalty.

How to cultivate loyal guests at your hotel

Although it’s not a must for travelers to wish to stay at your hotel again, offering a loyalty program is a pleasant way to show your gratitude for their business.

So, how can you cultivate a loyal consumer base?

1. Play a global role both online and offline

It is more crucial than ever to accommodate the requirements and desires of every possible guest, many of whom may not speak your language in today’s hyper-connected world.

Keep in mind that markets with the greatest growth do not speak English as their first language. Even if the majority of people are fluent in English these days, they still want to feel as though you care about them and are excited to have them over. This means that in addition to being ready to bring on multilingual employees, you should think about optimizing your website by translating it into multiple languages.

Your credibility as a global player will be enhanced by your ability to serve international markets and spot visitor patterns. It will also highlight how prepared you are to incorporate customer needs into your customer experience management plan.

2. Give the client a personalized experience

Visitors enjoy feeling well-cared for. They are likely to remember and return if you reward them with personalized experiences, such as exclusive deals and leisure choices. By studying your guests’ data in your property management system, you can create a profile of them and find out why they came. During check-in, your team has the ideal opportunity to learn more about the reason for your customers’ trip: are they visiting for business or for a romantic weekend getaway? Or are they just spending a laid-back holiday with their entire family? Once you are aware of their objectives, make effective use of that knowledge to your advantage.

For instance, provide honeymooners with a complimentary spa treatment or a room upgrade. Make sure your guests are delighted, not just satisfied.

3. Reward devoted customers

Loyalty programs that provide discounts, freebies, and other benefits to visitors, for instance, can significantly improve their experience and, eventually, your sales graph.

Remember to keep it intimate. Hoteliers can attract and retain consumers by emphasizing personalized and meaningful rewards, offering instant access to rewards, and transforming the guest experience.

Summing up

To sum up, hotel loyalty programs are essential for improving visitor experiences, encouraging reservations, and helping hotel owners make the most money. Hotels can accommodate a wide range of guest preferences and requirements by providing a variety of loyalty program alternatives, such as tiered, cashback, co-branded credit cards, and partnership programs, among others. To build hotel customer loyalty, hotels must prioritize personalized experiences, engage with guests online and offline, and consistently reward their loyalty.

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