According to a study by PwC, the vast majority of guests belong to at least three separate hotel loyalty programmes.
This casts doubt on the success of these programmes by demonstrating that guests are motivated to sign up to a programme by something other than a profound love for a specific brand. According to Chi Chan, chief commercial officer at Ireckonu, hoteliers would be wise to recognise this. He shares some of the ways that hotels can mend their broken loyalty programmes by focusing on what matters most: the guest.
Why do you think consumers belong to so many hotel loyalty programmes?
Today’s loyalty programmes are designed in such a way that they actually incentivise guests to shop around. Most hotels have failed to offer a compelling reason as to why guests – especially new ones – should engage with their brand over another. If a guest can find a lower loyalty rate for a comparable hotel, they’re going to take it, unless your brand can engage with them in a sufficiently meaningful way that shifts their focus from price to something more profound.
What do you consider the main shortcomings of hotel loyalty schemes today?
The key issue is that hotel brands inherently expect guests to prove that they are loyal before giving them anything meaningful in return. In this way, most programmes are about the hotel, not the guest. This is why we so commonly see a generic ‘buy 10 nights, get one free’ model in so many programmes. With offerings like this, it’s hard to see any inspiring reason for guests to want to stay with you, beyond getting the best price.
What can hotels do to reinvigorate their programmes?
Start by organising and consolidating data to improve how you analyse your guests. These insights enable you to truly understand your guests and meaningfully engage with them. This will not only lead to a more effective loyalty programme, but also provide each team across the hotel with a better understanding of how to serve your customers. This is guest-centricity at its best.
The next step is to recalibrate your loyalty programme. The ‘buy 10 nights, get one free’ loyalty model effectively gives a guest a 10 per cent discount. If we assume that a room costs $100 per night, this means that you could either give the customer the 11th night for free or offer them $10 off each of the original 10 nights. Armed with a rich understanding of your guests, hoteliers can derive great value in building genuine loyalty through a budget like this. When invested in a personalised way, the same budget will drive far greater engagement and foster a connection with your customers.
How does personalisation work in this case?
The key is to use segmentation and an understanding of your guests to provide them with unique experiences. Your systems already hold the data to make this possible, it just needs to be stitched together. You know that your business traveller takes an Uber to the airport every week, so you could offer them a free ride. If someone is staying with you to celebrate their birthday, your staff could surprise them with a cake. A complimentary glass of someone’s favourite red wine will go so much further in building their loyalty than adding a seemingly random number of points to their account upon checkout.
Ireckonu helps hotels put guests at the centre of everything they do. By consolidating and stitching together data from across each system, we help hotels better understand every guest. From loyalty to operations and beyond, your teams are equipped with the tools and insights they need to craft truly memorable experiences for guests.
This article was originally published in the Spring 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.
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