Is It Worth Independent Hotels Having a Loyalty Program?

Loyalty programs for small independent hotels are a cost-effective way of driving direct bookings and increasing the lifetime value of guests.

NB: This is an article from Net Affinity

Data from Expedia Group’s 2023 Traveler Value Index shows that 53% of travellers enrolled in loyalty programs say that it is now more important to stay with providers where they are a member than it was pre-pandemic. 52% of consumers value discounted pricing from their travel loyalty programs.

All of this data points to a tangible opportunity for hotels to optimise their pricing strategies with offers that will attract high-value travellers over and over again. 

With the likes of Booking.com continuing to compete more aggressively with independent hotels with reward programs like Genius, it’s a no-brainer as an independent hotelier to consider the benefits of your own loyalty program.

According to a Deloitte Hotel Customer Loyalty survey, “to turn your customers into enthusiastic, even passionate brand devotees, you need to understand the patterns in how different travellers view and use rewards. You have to use that insight to craft a program that stands above the ordinary and the expected.”

It has been the norm for business travellers to gravitate towards hotels offering a decent loyalty program. While this is still true, Skift Research released last year showed that between 2020 and 2021, the rate of leisure travellers who were loyalty members of a hotel they stayed in during their most recent trip went from 43% to 47% (the rate of business travellers remained stable at 64%).

According to Skift, hotel loyalty program members contribute between 30% and 60% of room revenue and tend to pay higher average daily room rates (ADR) than non-members.

An Accenture study found that 29% of customers wish that the rewards on offer in loyalty programs they took part in were more interesting.

Try to approach your loyalty program with an open mind and a dash of creativity. 

To help you get started, here are a few key factors of a successful program.

Finding a successful partner to work with

A CRM provider can help you get started with a loyalty program. 

CRM software options range from large ones like Salesforce to hospitality industry-specific ones like Revinate.

Partnering with a CRM provider to create your own loyalty scheme offers the advantage of creating a unique offering. A good hotel CRM is an invaluable tool when you’re driving direct bookings as it can create a loyalty program that’s personally fine-tuned to your guests.

What your loyalty program should offer

Traditionally, points and perks are what nearly all large chains base their reward programs on. Key factors in their success include return on spend, unusual uses for hotel points, flexibility in redemption, and perks for membership.

However, immediate and uniquely valuable offerings offer a great deal more value to guests than long-term points programs – and this is especially true for independents.

Using an instant gratification loyalty model, hotels enjoy increased booking conversion of 43% on average via a low-cost channel

If guests can’t redeem points at a large number of properties across the globe, how much do they really matter?

Read rest of the article at Net Affinity