The hotel industry is booming, and has been doing so for many years. As it stands, the industry is expected to be worth $36.7 billion in 2020. This growth doesn’t just highlight how profitable this market is, but also what an excellent moment this is to set up a customer loyalty program for your hotel chain.
The big hotel brands already have their own programs in place, and not having a loyalty program for your guests nowadays basically means being at a disadvantage on the market. After all, according to statistics, it seems that once a guest becomes a loyalty program member, the number of stays booked by them at the hotel (or hotel chain) affiliated with the program tends to increase by around 49%.
In case you’re not really sure how to go about setting up a loyalty program, don’t worry – we’ve got you covered with these 6 straightforward steps:
1. Choose the Customer Loyalty Program System That Works Best
Essentially, you first have to decide what kind of indicator your loyalty program will use, and how members will be able to accumulate it. Now, you’re not limited to any particular choice, but it is worth noting that most hotel loyalty programs usually just stick to points as an indicator.
As for how program members can accumulate points, you’ve essentially got 2 main options:
- A Points-Based System – The idea is that for every $ a guest spends at one of your accommodations, they will earn a certain number of loyalty points (5-10 points is the standard). Once they accumulate enough points (in this case, a few hundred or thousand points), they will be able to redeem various rewards, or advance to the next program tier (we’ll get to that in a bit) and enjoy other perks.
- A Booking-Based System – With this system, every time a customer loyalty program member makes a booking at one of your hotels, they earn a certain number of loyalty points (usually a pretty big amount to incentivize the guest to make their next booking at one of your hotels again). Again, they can use the points to redeem rewards or advance to the next tier.
Of course, you can always just combine the 2 systems if you want, basically adopting a mix between a points and booking-based system. For example, guests who stay at your hotels could earn points for each night they spend at your properties (somewhere around a few hundred points up to 1,000 or more), not just for every booking they make.
One more thing worth mentioning about points-based system – you could and should let guests earn points by spending money on your hotel’s facilities and services, not just on the booking itself. That could either be 5-10 points for every $ they spend (like a normal points-based system) at your hotel’s restaurant or bar, or a certain number of points for each service they use (like 50-100 points for ordering room service, for instance).
Oh, and consider rewarding guests with loyalty points if they use your own website to make a hotel booking instead of a website like Booking.com.
Cashback systems (redirecting a certain % of every $ a member spends at your hotels back to their loyalty accounts) are also an option, though they aren’t too popular in the hospitality industry. That’s because these systems are not that flexible when it comes to using rewards to further engage program members.
All in all, which system you choose ultimately depends on your preferences, your hotel’s background, and your customer base. The booking-based system definitely seems like the most popular option, but – if you want to offer your guests multiple ways to rack up points – the points-bookings mix discussed above would definitely work well.
2. Improve the Customer Experience with Rewards
Once you’ve chosen a system for your customer loyalty program, it’s time to decide what kinds of rewards you will be offering members to keep them coming back and get them to spend more money. What’s more, it’s important to make sure that the rewards are appealing enough to attract new guests too.
Here is an outline of the types of rewards hotel customer loyalty programs can offer their members:
- Late check-ins/check-outs
- A free extra night
- A free hotel room upgrade
- Preferred rooms
- Free room service
- A free bottle of wine/champagne on arrival
- Free parking
Those are just some basic ideas, of course. You’re not limited to them alone. In fact, you can even run a customer survey to ask guests exactly what rewards they’d love to redeem. Just remember that variety is key, seeing as how 61% of travelers choose a loyalty program that offers a broad spectrum of rewards.
Lastly, keep in mind that you can use referral rewards to your advantage too. What better way to attract new clients than by having your current ones bring them in and rewarding them for it, right? After all, around 40% of travel loyalty program members are already willing to recommend the program to friends and family if they have a positive experience, so why not give them that extra motivation to do it?
For instance, you could offer customer loyalty program members a discount on a future booking if someone they referred to your hotel makes a booking. You could even offer said program member a free night or a free hotel room upgrade if the person they refer spends a high sum of money. At the same time, the referred guests could earn a unique discount for their first booking.
Besides all that, there’s one more situation to discuss – namely if your hotel chain features accommodations of different star ratings. In such a case, rewards like a free night should have varying redemption costs depending on the star rating. For example, redeeming a free night should cost more points at one of your 4-star hotels than it would at one of your 2-star hotels.
3. Structure the Program into Tiers
In order to make your customer loyalty program as efficient as possible, you need to split it into separate tiers. That will also enhance customer loyalty, as the guests who love your brand the most will have a clear way to distinguish themselves from the rest.
Usually, hotel loyalty programs stick to 3-4 tiers. It’s better to not add more, as overdoing it with program tiers can actually put people off from advancing through the ranks or even joining the program in the first place.
Advancing through program tiers should be pretty straightforward for members, and you should either allow them to do it by accumulating loyalty points or by making bookings. Here is a basic example of how that might work:
- Tier 1 – The first level of the program; no specific amount of loyalty point or stays necessary to unlock it.
- Tier 2 – Unlocked with 10 hotel stays or 20.000 loyalty points.
- Tier 3 – Unlocked with 30 hotel stays or 50.000 loyalty points.
- Tier 4 – Unlocked with 60 hotel stays or 75.000 loyalty points.
The numbers are just some general examples, so you can easily adjust them according to your brand’s needs.
Just keep in mind that progressing through the ranks should pose some challenge (so that it offers program members a genuine feeling of satisfaction and a sense of accomplishment), but it shouldn’t be overdone too much.
Also, the quality of the rewards must go up as members advance through the tiers, with the last tier rewards being high-end personalized perks your most loyal guests would definitely enjoy – like a free limo pick-up from the airport, a 48-hour room guarantee, or executive lounge access, for example.
And remember to offer members an accumulation boost the more they advance through the tiers. A 5-10% increase in loyalty points accumulation per tier is a nice way to motivate loyal guests to make progress.
4. Set up a Hotel Credit Card (Optional)
This step is optional because it depends on the size of your business. Basically, hotel credit cards are more suitable for big hotel chains rather than a brand with just a few hotels. That’s because guests will be likely to get a hotel credit card if they travel a lot and are always able to make a booking with your hotel chain.
So, the more present your hotel chain is in the world, the more reasons to establish a hotel credit card system.
Essentially, a hotel credit card can be used by frequent guests to enjoy things like booking free hotel nights (provided they have enough loyalty points), as well as other extras like a free customer loyalty program tier upgrade, loyalty point boosts, and discounts for the hotel’s facilities and services.
Furthermore, we recommend enticing loyal members to get a card by offering them a certain amount of loyalty points for purchasing it (can be up to 1,000 loyalty points or more).
You should also think about whether you want members to pay a recurring annual fee for the card, or if a one-time fee is enough.
Besides all that, don’t forget about the card’s design. Your hotel’s logo must be clearly displayed on the card, and it must have thematic colors that are reminiscent of your brand.
5. Establish Fruitful Rewards Partnerships
If your hotel chain is large enough, it’s worth considering establishing reward partnerships with transport providers, airlines, retailers, and restaurants to allow loyalty program members to earn loyalty points by using your partners’ services. In exchange, your partners would refer their own clients to your hotels when they are in need of accomodations.
For instance, if one of your customer loyalty program members ends up using a car rental service that’s partnered up with your hotel chain, they’d be able to earn loyalty points for every $ they spend with them.
In the long run, this kind of business practice will help your brand gain exposure, attract more clients, and offer guests the kinds of services they need to fully enjoy their stay.
6. Complement the Program with an Amazing App
The best way to make sure your guests will want to interact with your customer loyalty program is to have an app designed for it. After all, back in 2016, nearly 57% of consumers said they’d prefer being able to use a mobile device to interact with a loyalty program. And, nowadays, approximately 85% of loyalty program members said redeeming their rewards using their mobile phone was much more enjoyable.
Plus, according to research, the total number of mobile users is expected to go up to around 5.09 billion by 2019. You can rest assured that a great deal (if not all) of your target audience is already part of that number. Lastly, keep in mind that 70% of hotel program members usually download an associated app too.
And here’s something to consider – you won’t actually have to put a lot of money, time, and effort into designing a mobile app for your loyalty program. That’s because topping of your program with a quality app is as simple as relying on Spoonity to handle it for you!
What’s more, you won’t need to wait months on end for an app to be designed for you. We already provide a scalable turnkey loyalty platform that’s 100% white-labeled and can be integrated with any POS system. That means you can easily and quickly deploy it, as well as customize it with your own branding.
Plus, we know how vital customer convenience is in the hospitality industry, which is why we made sure our platform offers support for online mobile ordering and payments. This way, you get to offer program members time-saving perks while they get to enjoy top-notch customer service.
Better yet, the app we will provide you with is extremely user-friendly, so your guests will have a very easy time getting used to it. The platform itself is intuitive, so your staff (and you) will get the hang of it immediately.
Furthermore, here’s a key aspect you’ll definitely find interesting – Spoonity makes it fully possible to offer guests a completely personalized experience. That’s because our platform can offer you plenty of insightful analytics, such as:
- Which guests are the most profitable
- What levels of loyalty characterize your client base
- What hotel services they like the most
- Which demographics characterize your guests
- Which one of your hotels is the most popular with guests
On top of that all, Spoonity’s platform provides social media marketing tools as well, thus making it quite simple for you to promote your customer loyalty program online. That, and we also plan on adding referral features in the near future.
And don’t worry. If you ever encounter an issue (extremely unlikely), we’ll be right there for you, as we provide 24/7 customer support.
If you’d like to ask us any questions regarding our platform, feel free to get in touch with us. Oh, and remember to share this article with anyone you believe might stand to benefit from all the info discussed here.