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Spotlight on: hotel loyalty programmes

Repeat custom is the mainstay of almost any business, but it's especially important in the highly competitive hotel industry. Loyalty schemes are one way of encouraging guests to return time after time. But how do they work? Click. explores

Rewarding repeat custom can earn guests a whole host of perks, from free internet access and late check-outs to suite upgrades and VIP experiences. Most schemes work on a points system where the more you spend, the more points you earn, which can then be redeemed for free nights, room upgrades and other tempting bonuses. But what are the benefits for the hotelier?

One of the biggest advantages of having a loyalty scheme is the opportunity to collate more detailed guest data which can then be used to personalise and improve a guest's experience. It's also effective for direct marketing so individual hotels can tailor their deals and offers directly to the customer.

“Loyalty in 2018 has to offer an instant benefit,” says Richard Plant, Head of Internet Marketing at Up Hotel Agency, a hotel marketing consultancy. “Consumers are more aware that they can shop around for deals and they quickly see that the points they earn don’t always match the hard cash savings of booking through a different channel.” 

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Massage at a spa
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Plant points to a recent study by Oracle titled 'The Loyalty Divide - Operator and Consumer Perspectives 2018' that found that consumers respond to instant rewards rather than long-term points type programmes. “Is this really 'loyalty' as we know it? Probably not, but it is a sales influencer,“ explains Plant. “The report said 78% of the respondents preferred immediate benefits to accumulating points. We see that offering relevant, timed and unique direct-only offers is the way to reward the loyalty of a return booking made directly with the hotel."

History of loyalty

However, hotel loyalty programmes have been around for decades with Holiday Inn laying claim to the first official scheme back in 1983, closely followed by Marriott and Hilton. Now, most major hotel chains operate a loyalty programme in order to stay viable in this highly competitive market.

The recent merger between Starwood and Marriott has created one of the biggest hotel chains in the world with 6,500 properties in 127 countries. This summer, their loyalty programmes Starwood Preferred Guest (SPG) and Marriott Rewards joined together to create more than 100 million loyalty club members, who can now combine their points and redeem free night stays and complimentary breakfast across all 29 brands. But rewarding loyalty can be much more than just offering the odd free room.

“Experienced-based loyalty rewards have become extremely popular in hotels, encouraging guests to take advantage of things like spas, restaurants and gyms,” explains Chris Wain, Director of Sales at Africa Travel, a specialist luxury tour operator. “These amenities make up a good percentage of a hotel’s revenue, and many places are now realising that rewards which get their guests to pay for these facilities on a regular basis are very lucrative.” And the benefit to offering these kind of loyalty perks is that the guest still has to invest in the hotel in order to be rewarded.

“VIP experiences are also emerging as a serious trend,” suggests Wain. “Some hotels don’t even notify the guest that they have become a VIP until they next check into the hotel. They can then arrive in their room to find a complimentary bottle of champagne and a card thanking them for their loyalty and notifying them that they are now entitled to certain exclusive rewards.”

He adds: “This boosts a hotel’s reputation and shows returning guests that their loyalty doesn’t go unnoticed. Unsolicited rewards such as these removes the hard-sell approach to loyalty reward schemes and are generally promoted through word of mouth from guest to guest, which is an effective form of marketing.”

Offering unique experiences

In recent years, Marriott has introduced Marriott Moments where members use their points to bid or redeem for unique experiences such as DJ masterclasses, Michelin-starred meals or VIP seats for shows like Britney Spears at London's O2 Arena.

While big name hotel chains have the capital to invest in a full hotel loyalty programme, smaller chains and independent hotels often have to be a little more creative. Some are employing TravelClick's Reward and Redeem Loyalty Solution programme which can be tailored to work with any property, while others have signed up with Guestbook, an independent loyalty scheme that offers guests 5% cashback or 10% tripcash (for use at Guestbook's other hotels) when they book one of its independent hotels through the site.

Alternatively, hoteliers could look at the Four Seasons Hotels and Resorts, who famously does not have a loyalty scheme, instead relying on a strong emphasis on personal service to keep its loyal guests returning time and time again.

If you’re a property partner you might want to access the Extranet or manage your property on the go with Pulse

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Takeaway
  • By rewarding repeat custom, guests can earn perks from free internet access and late check-outs to suite upgrades and VIP experiences
  • Loyalty programmes collate guest data which can be used both to personalise and improve a guest's experience, and for direct marketing purposes
  • Experienced-based loyalty rewards are becoming more popular, offering guest perks in hotel spas and restaurants
  • Small chains and independent hotels can often be creative when it comes to loyalty schemes. Some employ TravelClick's Reward and Redeem Loyalty Solution programme, which can be tailor-made to your property
  • High-end brands like Four Seasons do not have a loyalty scheme and instead rely on a strong focus on personal service to keep guests returning

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