Loyal customers spend 22% more than single-visit guests. That goes some way to explaining why 77% of hoteliers consider guest loyalty a key priority, yet it’s an area where many hotels struggle to deliver.
NB: This is an article from Mews
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For hoteliers, loyalty isn’t just about giving away points or perks – it’s about creating lasting emotional connections with guests. Loyal customers represent the most cost-effective segment for driving repeat bookings, particularly when those bookings bypass expensive third-party channels.
So how should your hotel approach guest loyalty? Should you align with a major global brand and leverage their loyalty program, or would an independent strategy better suit your property? Once you’ve made that decision, how do you go about creating an effective campaign? Let’s find out.
Independent Loyalty Programs vs. Global Brand Partnerships
The choice between joining a global brand or building an independent loyalty program depends largely on your hotel’s goals, location and target market.
Before you go deep into advantages and disadvantages to either, it’s important to consider the practicalities. If your hotel is located in a busy urban area or business hub, it might make a lot of sense to join a brand because of the guaranteed repeat footfall of business travel in the area. Conversely, a countryside hotel won’t benefit from the same customer demographic so it’s likely a better option to choose a leisure brand or go independent.
Finance is another big factor. If your hotel is highly leveraged by a bank loan, the bank may dictate that you have to join a global brand because of the higher level of security. If you don’t have these restrictions but don’t have much to invest, simple, self-run book direct programs are easy to set up and maintain – assuming you have a modern PMS.
The Case for Joining a Global Brand
Aligning with a major brand can provide immediate advantages. Brands like Hilton, Marriott and Best Western offer access to a large, established customer base and business relationships with corporate clients. For hotels in urban or corporate-heavy locations, this can streamline the process of attracting consistent bookings from business travelers. These travelers often prioritize predictability, such as 24/7 gym access and standardized amenities, which global brands guarantee.
However, this option comes with trade-offs. The cost of operating under a brand flag can be significant, including fees and rigid operational requirements. Brands dictate everything from technology systems to minimum standards, limiting the flexibility to craft unique guest experiences. While the partnership offers security and volume, it often lacks the personalization that fosters genuine guest loyalty.
The Case for Independence
Independent hotels, on the other hand, thrive on differentiation. If you’re passionate about creating unique guest experiences and aren’t constrained by the need for corporate predictability, independence offers unmatched freedom. Without brand-imposed constraints, you can select technology solutions that fit your needs and reinvest savings from franchise fees into guest-centric innovations.
For independent hoteliers, the focus shifts from transactional loyalty – points and perks – to building a fan base of advocates. These are guests who rave about their experiences, generating word-of-mouth marketing and encouraging direct bookings. While this path demands more creativity and effort, it allows for outsized impact, especially when executed well.
The choice ultimately hinges on your property’s identity and goals. Do you seek the predictable efficiency of a branded operation, or are you drawn to the creative potential of independence? Both paths can foster loyalty, but the type of loyalty – and the journey to achieve it – will look vastly different.
Creating Effective Loyalty Programs
When developing a loyalty program or strategy to encourage recurring visits, it’s important to tailor the approach to your hotel’s size and portfolio.
For larger hotel groups with over ten properties in destinations like Amsterdam, Paris and Berlin, a traditional points-based program might make sense. These programs can attract frequent travelers who are likely to overlap with your locations and are motivated by status and rewards. However, smaller hotel groups in secondary cities or destination hotels often benefit more from focusing on direct bookings rather than traditional loyalty programs.
For independent hotels, the goal should be to create a streamlined book-direct program. By capturing email addresses and building relationships with guests, you ensure that they think of your hotel first when planning their next trip. Offering the best rates directly on your website – behind a simple login process – is a great way to encourage direct bookings while bypassing costly OTAs.
Small yet effective perks, such as early check-in, late check-out, or even a free room upgrade, can make booking directly far more appealing to modern travelers. These benefits not only add immediate value but also resonate with the younger generation, who typically prefer quick gratification over long-term points accrual.
Leveraging Data for Personalized Experiences
The foundation of any successful loyalty strategy is data. Having accurate guest profiles, a well-maintained database, and a CRM that integrates seamlessly with your PMS allows you to deliver personalized experiences that keep guests coming back.
Start by capturing clean data during every stage of the guest journey. For instance, if a guest books through an OTA, encourage them to provide their real email address during check-in to build a more complete profile. CRM tools can then segment this data to create tailored marketing campaigns based on guest behavior, preferences, and booking patterns.
A clean, comprehensive database lets you recognize repeat guests without them needing to identify themselves. Imagine the impact of greeting a returning guest with:”Thank you for booking directly with us. To say thanks for your loyalty, we’ve upgraded your room.” This proactive recognition fosters an emotional connection and drives repeat business.
Key Takeaways to Drive Success
What are the non-negotiables when it comes to effective customer loyalty programs?
1. Clean Data is Crucial
Start with accurate guest profiles and continuously merge and refine your database to ensure it contains real information.
2. Leverage CRM Tools
Solutions like Revinate or Cendyn help automate campaigns and build personalized guest experiences, turning one-time visitors into loyal patrons.
3. Encourage Direct Bookings
Offer incentives like exclusive rates, perks and personalized recognition to guests who book directly, ensuring a stronger connection and higher profit margins.
4. Embrace Modern Technology
Adopt an advanced PMS that consolidates all services – rooms, parking, meeting spaces, and more – into one system. This enables better data utilization and guest experience personalization.
5. Create Memorable Moments
Acknowledge and reward guest loyalty at every touchpoint. By anticipating needs (like noting dietary preferences or offering upgrades), you create lasting impressions that encourage repeat visits.
The Future of Independent Hotel Success
Technology empowers independent hotels to rival even the largest chains. With the right tech stack, data-driven strategies, and a commitment to personalized service, smaller properties can build deeper guest connections, foster loyalty and drive direct bookings.
The future belongs to those who prioritize innovation and guest experience over legacy practices. By embracing tools like AI-driven CRMs, integrated PMS solutions and proactive data collection, independent hotels can position themselves as leaders in hospitality excellence.
Let’s redefine loyalty – not as a program, but as a journey built on trust, recognition and memorable experiences.
