This is a guest post by Patrick Bosworth, CEO of Duetto, a San Francisco-based revenue strategy technology company.
Patrick Bosworth
A recent survey commissioned by Choice Hotels International showed that almost two-thirds (61%) of travellers find loyalty programmes and points do impact their choice of vacation spots.
Knowing that loyalty programmes can sway travel decisions, what can hotels do to make sure they are benefiting and that they stand out from the myriad loyalty clubs available to hotel guests?
First, hotels must realise and understand that success is not in signing up hundreds or even thousands of members. A recent report in Skift found that, even while most of the biggest brands’ loyalty clubs grew membership by double-digit percentages in 2015, room nights booked through those programs did not rise as much and, in some cases, actually decreased. This of course suggests that many of these loyal members were inactive or disengaged.
Members’ unused points become a growing liability for hotels. In the same Choice Hotels International survey, almost half of travellers surveyed (44%) say they have a lot of hotel loyalty points stashed up, but no time to use them.
Engagement, not enrollment matters most for loyalty
So, got your members on a list? Next, make it easy and attractive for them to redeem the points. The cookie cutter loyalty programme days are definitely over. These days, it’s all about personal conversations and service. Giving a static discount off the best available rate — one that’s given to every loyalty club member on your list — is not going to cut it anymore. Your loyalty members must feel like they are being truly rewarded for sticking by your brand.
Family on vacation may appreciate a free extra bed. (Image credit: WebSubstance/iStock)
Instead of merely creating a programme that assigns points for free room nights, hotels should have a basket of different offers that create value for all the different guest segments they serve. Understanding your loyal followers is part of delivering good service to them and keeping them happy.
While a business traveller might value a late check-out or complimentary gym sessions, a family on vacation may appreciate a free extra bed for their kids, or a spa treatment.
More sophisticated hotel loyalty programmes will track these guests’ on-property spending from previous visits, which lets your property calculate a value for those customers’ worth to your bottom line. From there, your revenue managers can decide what percentage of that worth to reinvest into individual loyalty club members, yielding dynamic prices for each guest who logs in and books a room directly with you.
With advancements in CRM, PMS and RMS platforms, hotel loyalty programmes can definitely enable personalised pricing. Once a customer’s worth is calculated, how to personalise his or her loyalty offer becomes clearer.
Earn true guest loyalty with better messaging
Then market those offers to consumers individually and directly. When guests realise they are being recognised that way, it will make your hotel brand become immediately more appealing when compared to the next brand that mass markets to thousands of their loyalty members with the same offer.
Personalisation is important. (Image credit: BrianAJackson/iStock)
Don’t undervalue the importance of personalisation. There was a time when customers valued choice — and a lot of it. These days however, the abundance of choice often times becomes a bane.
A consumer survey from hotel industry digital-marketing firm Fuel found that travellers’ distrust in OTAs has increased 50% compared with a year earlier. The overabundance of choice makes consumers feel anxious and insecure about finding the best deal.
And some concerns are validated by the high incidences of scamming. Earlier this year, the American Hotel & Lodging Association put out a statement supporting the introduction of a bill aimed at stopping online hotel booking scams that have affected some 15 million bookings each year at a cost of US$1.3 billion. That is huge!
For consumers who are overwhelmed by choice, lost in a sea of options, prices and distribution channels, being addressed personally and guaranteed the best price at the hotel that they are familiar with will undoubtedly make your hotel brand appealing and reassuring. And this is where and how hotel loyalty programmes can stand out and make a difference.
• Featured image credit: artisteer/iStock
