Hotel Loyalty Programs Are Broken – Here’s How to Fix Them

/Hotel Loyalty Programs Are Broken – Here’s How to Fix Them

Hotel Loyalty Programs Are Broken – Here’s How to Fix Them

|2019-09-03T14:28:08-04:00August 29th, 2019|

By Joel Montaniel

As travel increases, so does competition amongst hospitality operators. With spend on lodging exceeding $200 billion in 2018 alone, hotels have a unique opportunity to build their guest base and capture an even greater share of the market. However, to do that, they need to be memorable. And with over a third of hotel guests believing that hotel loyalty programs are rarely relevant to them, there’s a clear opportunity to improve how hotels interact with guests, both during and after their stay.

One way companies across different sectors have built a strong customer base is through programs that reward regulars and incentivize people to return time and time again. While many hotels have loyalty programs, they’re often one-size-fits-all and are if anything, a minor consideration when people choose lodging. However, if deployed properly, hotel loyalty programs can be transformed from a ‘check the box’ item to a key marketing tool helping drive business and repeat visits in the year ahead.

Thinking Outside the Room

Traditional hotel loyalty programs often reward guests for a certain number of stays or amount spent, but as the industry evolves, loyalty programs must as well. One way hotels can reinvigorate these programs is through offering incentives and rewards outside of just discounted or free stays, including rewards for other areas of the business such as food & beverage. With hotel guests spending $48.7 billion on restaurants, bars, banquets, room service and mini bars in 2017 alone, expanding the loyalty program outside of stay discounts is an easy way to build both the business and guest loyalty.

Consider allowing guests to earn points when they dine at the hotel restaurant or grab a drink at the lobby bar. This provides a more comprehensive loyalty program that ties together diner preferences to hotel rooms and incentivizes guests to stay on the property. The rewards can be anything from allowing guests to redeem points for a free meal at the property’s restaurant to offering them exclusive access to reservations, perks or a special dining event, satiating guests’ increasing need for experiential travel.

Offering rewards for unique dining experiences can also broaden your guest base and appeal to anyone looking for a restaurant or bar, not just hotel guests. Increasing these experiential offerings can make the bar or restaurant a destination in itself. This allows you to target locals who may not need a room but would visit the bar or restaurant. It also encourages them to recommend your property to friends or family who come to visit. Many hotels are now using food and beverage as a way to entice guests to stay at their properties, but they also prove an effective way to build out a loyalty program.

One Size Doesn’t Fit All

Expanding your loyalty program offerings into special events, food & beverage rewards and experiences allows hotels to tailor their programs for each guest – allowing for personalized and memorable experiences to be crafted. With 83% of hotel guests preferring to redeem loyalty rewards for new alternative experiences based on their unique preferences, hotels need to customize to stay relevant.

Whether it’s curating a special wine dinner for all of their oenophile guests or offering an exclusive preview night for a seasonal tasting menu, creating these unique dining experiences show hotels are listening.

One way to curate these customized loyalty programs is to use software to effectively collect and harness all of this valuable guest data. Once you collect data around birthdays, anniversaries, allergies and items ordered, like a type of wine or dessert, you can go the extra mile and offer guests rewards or treats for their loyalty. This insight also allows you to send the right offer to the right guest at the right time, increasing the likelihood that you’ll send something that will be truly appreciated.

To help connect the dots, be sure to tie your restaurant and bar CRM and reservation management software to your hotel technology systems. Integrating often siloed systems allows operators to entice guests to visit sister properties and increase cross-selling, creating offers like a free night at another hotel or a complimentary drink at their bar. It can also help personalize your guests’ current stay. Whether it’s making sure the room mini bar is stocked with their favorite wine or their allergies are taken into account for their snack basket, connecting these systems will give you deeper insight into your guests and their preferences.

Loyalty programs are an area where hotels can really stand out from competitors. And in the hospitality industry where personalization is key, expanding your loyalty program into food and beverage is another way to connect with guests and provide even more value.

About Joel Montaniel

Joel Montaniel is the CEO & Co-Founder of SevenRooms, a data-driven hospitality platform that combines operations, marketing and guest engagement tools, where he leads business strategy and sales. Prior to founding SevenRooms in 2011, Montaniel served as the Chief of Staff at LivePerson, leading strategic, operational and cultural initiatives. He started his career at Credit Suisse within the Real Estate, Finance & Securitization Group. He graduated with a B.A. from Georgetown University.

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