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10/08/2021

Re-thinking Guest Loyalty in Hospitality’s “New Normal”

From partnering with third-party vendors to give loyal guests more point flexibility to cross property marketing, hoteliers need to re-think and re-launch their loyalty strategies.
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Hoteliers have long been aware that loyalty programs are a crucial part of the holistic hotel experience. These programs can incentivize return bookings and help differentiate a hotel from the crowd. They’re also a great way to ensure that brands can continually engage with customers in-between trips and, ultimately, investing in these programs is the best route to building an end-to-end value proposition.

RE-ENGAGING GUESTS: OLD AND NEW

As travel rebuilds, it’s increasingly clear that hoteliers have used the last year as an opportunity to re-think and re-launch their loyalty strategies. Guests have also changed their travel habits and are increasingly looking for leisure trips, which means hoteliers have a unique chance to capitalize on their hunger to travel and seek out new destinations. From the guest’s perspective, they are freer than ever to choose where they stay and who they build their next set of points with.  

With travelers now considering how to get the most out of their trips, from local experiences, to dining and well-being options, a strong loyalty program becomes more important than ever. Some hotels are expanding their ‘tiers’ at lower levels or with third party vendors, which enables guests to earn benefits at a faster rate and choose different ways in which points can be earned. This type of fresh thinking in relation to loyalty programs has become an essential pillar of any hotel’s strategy when considering how to re-engage and re-incentivize guests.

CREATING DYNAMIC MARKETING STRATEGIES

Aside from structural program changes that enable accelerated points-earning, there is also a greater emphasis on cross-property marketing, especially in leisure hotels. Take the example of a business hotel which prior to the pandemic might have had loyal guests returning week after week. Previously, this would have provided the perfect opportunity to market leisure resorts, with the potential to turn one stay into two bookings. Today, hoteliers are having to use cross property marketing to generate one booking.

Yet by using integrated booking platforms, hotels can leverage their existing data in order to send targeted and effective marketing to the right guests. They can also use their knowledge of that guest to offer defined incentives such as spa or dinner vouchers. There’s room for creativity here too, with many hotels upgrading their use of imagery or even testing receptiveness to humor within their communications.

This process has also been dynamic throughout the pandemic, with hotels responding to changes in regulations to offer alternatives informed by the guest’s location or preferences. By contrast, hotels that do not use a CRM have struggled to capitalize on targeted marketing opportunities.

All of this relates to the new discerning traveler. Hotels must make data driven decisions to personalize communications or incentivize guests in a creative way to increase their opportunity to win a customer over.

DRIVING ENGAGEMENT AND COLLECTING DATA

In another significant shift, member programs are commonly being used to drive engagement. Moving away from traditional loyalty programs with defined tiers, these member programs offer the same exclusive benefits to all that join. Not only can this increase overall loyalty, but it also significantly reduces complexity for hotels.

A good example of this is Village Hotels, a UK based chain that faced a significant challenge in boosting occupancy during the pandemic. Historically, they had focused on adding guest value through diverse F&B offers and realized the importance of leveraging their membership program and strong ancillary revenue streams.

With the use of integrated CRS, CRM and Web solution, Village Hotels were able to drive new membership sign ups before reopening in a strategy called “The Booking Revolution.” To persuade guests to sign up or book their stay, they offered Revolution members rooms at £25 a night, depending on their stay dates. They also boosted visibility of member-only offers through transactional emails, resulting in 26,000 bookings, 114,000 new members and over £1 million in revenue within just the first month of the campaign, demonstrating the importance of implementing inventive approaches to loyalty strategies now as part of your business strategy.

LEVERAGING YOUR DATA

Hotels have also begun to utilize the treasure trove of data available to capitalize on inbound marketing opportunities. This means that when a guest logs onto a site, hyper-personalized offers are generated automatically, and this can be particularly effective for hotels with the flexibility to tailor to different types of guests.

For example, a hotel could send a targeted offer to ‘platinum’ tier members of their loyalty program who live within a 50-mile radius of a certain ski resort. The benefit of these personalized offers is that they can also discern the value of a guest within a tier and promote to those with a higher likelihood of conversion.

More broadly, hotels need to be using an integrated system to entice a guest and drive a booking. New functionalities now offer the opportunity to build this sort of targeted offer and push it out through all engagement channels. The inbound customer is a great isolated example, but it’s important to take a systematic approach and link all aspects of the guest journey.

Once on the property, existing data can be used to offer a tailored experience and will inform the next stay too. For both new and existing guests, data will be used to not only to win them over on their next stay but also tailor future marketing offers.

In hospitality’s “new normal,” loyalty strategies are increasingly holistic. Often, they are being used to entice loyal guests back as well as encourage new bookings. The process is becoming increasingly cyclical too. Once a guest finishes a stay, hotels are already considering how to use their data to drive the next booking, and in an increasingly competitive landscape, those that fail to adopt this approach may be left behind.