An Independent Hotelier’s Guide to Loyalty Programs

Loyalty programs have been a part of the hospitality game for decades. And for as long as they have been around, they’ve been the subject of much debate. Like any strategy in hospitality, some consider loyalty programs an essential part of their business and others have found them to be nothing but a liability. What it comes down to is discovering the right solution for your business. With new technology and evolving guest expectations, rewards programs come in all shapes and sizes. You just need to find the right fit.

Here’s a quick guide highlighting the benefits of a loyalty program and the various options available to hoteliers:

The advantages

When implemented well, a loyalty program can do a lot for your property. Offering benefits for continued patronage builds an emotional commitment that makes a guest less likely to book somewhere else and more likely to act as a brand ambassador in-person and online.

Loyalty programs are also a great way to incentivize direct bookings, thereby improving profit margins. In fact, a recent study conducted by the School of Hotel and Tourism Management found that a hotel’s spending on these types of programs was associated with better performance and improved overall gross operating profits. They ultimately concluded that there is “strong and scientific justification regarding the investment budget on loyalty programs.”

Points-based systems

How it works >> Points-based systems are the more traditional option available. These loyalty programs award points for purchases made at the property, from room nights to products and services, which can then be redeemed for discounted services and other perks at a later date.

Tips for success >> The biggest headaches that guests have had with traditional loyalty programs came from complicated rules and annoying restrictions. To run a successful program, member points should never expire, and be easy to redeem. Avoid placing restrictions on and setting black-out periods for reservations made with rewards. It’s also a good idea to offer a variety of options for points redemption. Having scaled options (from little things like a complimentary beverage to large rewards like a free night’s stay) will make all members feel like they have a chance to benefit from the program.

In addition to creating more flexibility in the points-redemption process, you may also wish to include more options for earning points in the first place. Offering rewards for engagement on social media and online reviews can be an excellent way to generate valuable UGC (user generated content), and members will appreciate the opportunity to score points in other ways.

Instant rewards

How it works >> Instant rewards is a much newer concept in the world of loyalty programs. Many travelers today (particularly Millennials), are looking for immediate value. The idea of a free stay in the distant future just isn’t compelling enough to sign up now.  For this reason, many hotel brands that cater heavily to a younger cohort have adopted models that forgo traditional rewards for smaller perks (like free wifi, room service vouchers, or a complimentary beverage) that can be earned through immediate actions taken (like booking direct, sharing on social media, or signing up for the rewards program). Members get the instant gratification they’re looking for and don’t have to worry about earning points and navigating the redemption process.

Tips for success >> Like anything else in business, you need to analyze the numbers to ensure you’re creating a model that benefits your business. You need to know how much an action (like booking direct or posting a positive review) saves or makes your business and then choose an appropriate reward within that margin.

Partnership Programs

How it works >> For many independent hotels, running your own rewards program isn’t particularly feasible. With just one property, it can be difficult for members to accrue enough points for it to be meaningful. This is where partnership programs come in. Companies like VOILA and Stash Rewards allow independent hotels to sign up and benefit from a shared loyalty program. Members benefit from more property options worldwide, and your hotel will gain access to a much larger pool of (already incentivized) customers.

Tips for success >>  All partnership programs are different, so make sure you know what you’re signing up for. If they take a commission for all bookings made using the program, you need to know that it’s going to be worth it. You’ll want to look into the demographic that the program caters to, the number of members, and the traffic the website receives. Be sure to read lots of reviews⏤paying particular attention to those from properties similar to your own.

A loyalty program can help your business build a dedicated base of returning guests and maximize direct bookings. Consider implementing one at your property today.

How to Sell Hotel Rooms Without Offering Discounts

Slashing room rates can feel like an obvious and easy solution to a decline in bookings. However, your marketing strategy should not appear obvious or easy. Low prices invite the idea ‘you get what you pay for’ and discounted rates can indicate a hotel-in-trouble. For many, price determines quality, and price is likely to determine a potential guest’s first reaction to your hotel. If rates were the only factor in selling a room, the hotels with the lowest rates would always be fully occupied. So, while discounts may lead to some short-term bookings, they rarely lead to the long term goal of establishing a sustainable and flourishing business. But the question is: how do you sell rooms without slashing rates?

1. Be Distinct.

It’s laughably obvious, and of course, what everyone and every business desires to be. But it’s worthwhile to spend time and repeatedly revisit the following questions: What makes you different than other hotels, inns, and B&Bs in your area? Why should someone book with you instead of with the hotel down the street? Who are your ideal guests? What do they value? Be specific. You cannot build a successful marketing strategy without understanding who you are. Get out a piece of paper and jot down ideas. If your hotel’s unique qualities and distinct assets do not come quickly to mind, this is where you need to spend time and energy because the following pieces of advice rely on your answers to these questions.

2. Add Value.

Instead of discounting prices, maintain your rates and add services and products. Your potential guests will perceive and then receive increased value, which not only sells rooms but strengthens your brand by providing another opportunity to highlight your assets.

Add value in two ways:

Offer hotel products, amenities, or services. Consider offering unlimited access to your onsite gym, a complimentary massage at your spa, free laundry services for business travellers, or whatever services or products that make your hotel unique. This takes some creative thinking, as you want to ensure you’re offering something that your guests find valuable but also keeps costs low.

Collaborate with local businesses. Approach restaurants and music venues to offer a combined price for a night or weekend away. Collaborate with museums to bring out-of-towns guests to see the opening or closing of an exhibit. Create packages with sports teams or theatre companies that offer season passes that would bring guests back multiple times a year. Understand what experiences your ideal guests desire and work with local businesses to offer mutually beneficial packages.

3. Enhance your Online Presence.

Website. Your property’s website is vital. It offers a powerful first look at your hotel and should immediately present the feel of your establishment. Your website should make someone want to stay at your hotel. Currently, minimalism is the trend for websites, which is particularly effective for hotels because it gives a clean and calming impression. It’s important to understand that a website should be updated regularly, not just for its content but to keep it looking fresh and modern. This is especially important if your brand incorporates these traits. A website should be easy to navigate, responsive (so that it can be viewed on every possible screen), feature high quality images, and offer information that’s readable and concise. It’s recommended that you hire a professional. A good website designer, writer, and developer can help you tell your brand’s story through images and concise words, and can also ensure that your website is easily found through online searches.

Hotel Rating Websites. Websites like TripAdvisor have become a necessity… and a thorn in the side of many service oriented businesses, even the ones who consistently get good reviews. You cannot stop people from posting negative reviews, but you can respond to them, giving potential guests an opportunity to see how you resolve issues. Here’s a helpful guide to maintaining online reputation.

Social Media. Social media is a good medium for showcasing your carefully curated packages, but mostly it’s a storytelling platform. Many modern travellers seek individualized experiences, and one way to show that you can fulfil their desires for individuality is to be unique yourself. Tell and show the behind the scene stories of your hotel through original photographs; highlight the people who work for you or the people who stay with you (with their permission); and feature your surrounding area’s attractions. Remember, too, that social media is meant to be social. Don’t focus solely on presenting your story. Interact with other businesses and members of your community; engage with former and potential future guests; and respond quickly to inquests.

Cultivate Repeat Business. It’s easier to encourage repeat guests than to attract new ones. To do so: think small. Small gestures have a big impact. Ensure the front desk staff know and address repeat customers by name. Walk around at breakfast and briefly chat with guests about how their enjoying their stay. Send handwritten thank you notes and birthday cards. Offer complimentary champagne upon the arrival of a repeat guest. Also, consider starting a customer loyalty program based on the number of nights booked or referrals made.

Empower your Staff. While their main role is not to sell rooms (although staff members are potentially your hotel’s greatest ambassadors), they can upsell. Whenever the opportunity arises, your front desk staff should have the knowledge and freedom to offer room upgrades – the suite with the oceanfront view, the room with the king size bed or garden terrace – for a suitably enticing price.

Welcome Pets. More and more people desire to travel with their pets, especially dogs. This is particularly important for guests travelling within a 300-kilometre radius. These are the clientele who are most willing to pick-up-and-go for a weekend (or even mid-week) getaway, and they’re more likely to embrace spontaneity if they do not have the added complication of finding care for their four-legged family members. Need more incentive? It’s likely you can charge extra for a pet-friendly room. Here are some considerations for accepting four-legged guests.

Offer Discounts when Appropriate. Discounts have a time and place, but they should be offered for a reason. Guests become irritated when they discover that they could have found a reduced rate through another website or if they had waited longer to book. However, there are ways to offer discounts fairly and effectively. Consider offering discounted rooms for extended stays, for repeat customers, and for referrals.

If you offer discounts too frequently and without a specific purpose, you run the risk of having discounted room rates become your regular rates, which means your revenues will decrease, you will no longer be able to offer a high level of service, potentially driving away repeat customers. It’s a trajectory you do not want to instigate. When facing a slump, it’s natural to think ‘let’s try lowering prices,’ especially if other hotels are doing so. However, it’s best to maintain your rates, maintain your service, and return to the foundational questions: Who are you as a brand? What do you do well? Who are your ideal guests? What do they most desire? The answers to these questions will help you build packages, market your assets, tweak services, enhance communication with the public, and ultimately, sell rooms without slashing prices.

Choosing a Loyalty Program that Works for Independent Hotels

In an effort to land repeat customers (and increase direct bookings), loyalty programs are one of the most effective strategies out there. A study by Cornell University found that guests book 50% more rooms each year when they are involved in a loyalty program. That’s a lot of extra revenue!

Traditionally, these programs were the exclusive territory of chain hotels—which had the resources to create complex rewards systems and enough ubiquity around the world for frequent travelers to accrue and use points. But it’s 2017, and we don’t have to settle for outdated concepts. There are some excellent options for independent hoteliers to offer their own rewards programs and reap the benefits of improved guest loyalty.

It’s important to set up a program that considers your clientele and company culture. Think about the type of program that would best suit your business. Are you interested in a more traditional points-earned system? The new trend of instant rewards? Or maybe you want to come up with a creative blend of both!

Points-Earned

The classic loyalty program is, of course, a points-based system. Customers earn points in proportion to how much they spend using a simple mathematical formula. When guests have earned enough points, they can be redeemed for free nights, discounts, etc. On their own, independent hotels have trouble effectively using this system because guests struggle to earn enough points to be worthwhile. Group schemes, such as Stash Rewards and Preferred Patron, mitigate this problem by creating a network of independent properties that benefit from a shared rewards system. In addition to providing your property with a loyalty program, group schemes can also expose your business to a wider audience.

Instant Rewards

While many still love point-programs, it seems a lot of today’s travelers find more value in unique and immediate rewards. Instead of making customers wait until they’ve accrued enough points for a free room or discount, these programs offer smaller rewards (think free WiFi, room service vouchers or a box of artisanal chocolates) for simple tasks like booking direct, sharing on social media and so on. This sort of instant gratification goes a long way with guests and is easier to manage as an independent property. If you’re interested in an instant-rewards program but uncomfortable managing it independently, look into partnering with a company like Stay Wanderful.

An Innovative Combination

Don’t feel limited by the two options mentioned above. With a powerful CRM (and a bit of creativity), you can design a program custom-fit for you.

The ‘Friends of the Brand’ program, offered by Kimpton Hotels, is a great example of an innovative alternative which blends a points-based system with personalized rewards. By using invisible credits, they award points to guests for a variety of actions (like positive reviews, sharing on social media and booking direct) as they see fit. The guests never know how many points they have, but at any time an employee can use them to surprise and delight guests with instant, personalized rewards.

Final tips

Make it Accessible >> If you’re offering a points-based system, ensure that members can access and use their points easily. Consider using a mobile hotel app or online dashboard.

Communicate and engage >> Make sure to send emails, and engage with members on social media, so they don’t forget about your loyalty program.  Send updates on their status in the program, suggestions for earning more points and ways to redeem rewards.

Know your customers >> Consider what it is your guests want. A personalized, thoughtful reward can be more appreciated and memorable than a generic offering of higher cost. Unique perks are what can set you apart from the competition.

 

Building customer loyalty is critical for survival in the hospitality industry. Think about adding a rewards program to win repeat customers and boost direct bookings.

11 Practical Ways to Increase Direct Bookings

In an OTA-dominated online hotel market, every property strives for more direct bookings. While OTAs and traditional travel agents are effective for increasing occupancy and exposure, direct bookings boast the lowest cost of acquisition and are better for a hotel’s bottom line.

Here are 11 practical ways lodging operators can tip the scales in favor of direct bookings…

  1. Use Your Data to Identify Customer Segments and Your USP

Data is essential to driving direct bookings. A hotel’s data can help answer two fundamental questions: who are your guests and why do they choose your property? Identifying your property’s most profitable customer segments and unique selling points (USP) is key to driving relevant marketing and sales efforts that generate direct bookings. For more information on this topic, read our blog post about how to use PMS data to drive bookings.

  1. Maintain a Compelling and User-Friendly Website

A hotel’s own website is another crucial component of any direct booking strategy. To keep customers on your site, convey the genuine story or experience of staying at your property. Use your property’s customer segments and USPs to guide content. A simple, attractive design, quality images, captivating copy, online bookings, and user friendliness are key elements of a successful website that turns lookers into bookers.

It’s also very important to ensure that your website functions well across devices. It should be easy to navigate with clear calls to action and should load fast on both desktop and mobile. Nothing puts visitors off faster than a slow, confusing site.

Use Google Analytics to track visitor metrics such as time on site and conversions to help identify pages that need improving. Google also offers a helpful Mobile Friendly Test for websites.

  1. Offer Online Bookings

Most travelers turn to online channels to research and book travel nowadays, so providing direct online bookings on your website is a no-brainer. The easier it is to book, the more customers will convert. This means an online booking widget or “book now” button that is displayed prominently on all pages of your website, a simple booking process ideally limited to 2 or 3 steps, security signals that assure customers the process is secure, mobile-optimized booking forms, and automatic booking confirmation. Approximately half of travelers who book travel online do so using a mobile device, so user-friendliness across devices is crucial for increasing conversions.

Lodging operators should also ensure that their direct online booking engine is commission free and integrated with their property management system.

  1. Add Value

Offering value-added packages or booking add-ons through your website that are not available on OTAs can help encourage customers to book direct, but be careful not to overwhelm them with too many choices (too many choices make booking decisions more difficult and can actually block the path to purchase). Consider offering perks for booking direct (like free parking or a complimentary drink at the bar) and advertise the benefits of booking direct on your website.

  1. Offer Discounts to Limited Audiences

While OTA rate parity agreements prevent properties from offering lower rates on their own website, lodging operators can offer discounts to limited audiences such as email subscribers, social media followers and loyalty program members. Offering special deals to these groups is an effective way to stimulate direct bookings — after all, who doesn’t like exclusive discounts? Special rates can be accessed via a discount code that can be entered into a hotel’s direct online booking form or redeemed over the phone.

  1. Take Advantage of Social Media

In addition to enticing social media followers with special offers, hotels can and should drum up interest and website click-throughs by posting engaging content on their social media channels. Share blog posts, photos and videos about your destination and property, and link back to relevant pages on your website whenever possible — like your blog, local events listing page, attractions and activities page, special packages, etc. Keep your customer segments and USPs in mind when creating social media posts for optimal engagement.

  1. Make and Share Videos

There are over four billion video views EVERY day on YouTube! People love videos. Video is a major source of travel inspiration so it makes a lot of sense for hotels to include video in their marketing efforts. Adding videos to a property’s website helps to engage visitors and increase time on site. Posting videos on YouTube and other social media channels does wonders for engagement (and reach) there too — just be sure to link back to your website (where your “book now” button awaits!).

  1. Offer a Loyalty Program

Customer loyalty programs aren’t just for big chain hotels; they are relevant to any property that wants to encourage repeat business. Loyalty programs incentivize guests to book direct to earn and redeem points and to receive special perks or discounts. Some property management systems like WebRezPro offer integrated loyalty program functionality, and solutions like Preferred Patron and Stash Hotel Rewards specialize in simplifying guest rewards management for independent properties.

For more information on the subject, read our blog post about how to design a loyalty program that is relevant to today’s guests.

  1. Remarketing

No matter how awesome your website is and how easy your online bookings are, there will always be website visitors that abandon the booking process part-way through. One way to bring them back is with remarketing. If you’ve never considered remarketing before it is worth putting some thought into; remarketing allows you to re-engage customers that are already at the edge of converting — after all, you almost had them! By adding special code to your website, you can track website visitors who abandon bookings and then show them customized ads online or on social media after they leave your site to bring them back. It might sound complicated, but it’s not. Google AdWords and Facebook’s Custom Audiences are two good places to start.

  1. Include Social Proof on Your Website

User-generated content (UGC) is the most trusted form of marketing — it’s word of mouth in digital form. Reviews in particular help convert lookers into bookers, so including guest reviews on your website helps keep customers on your site to book direct. Other forms of social proof, like social media follower counts and trust symbols like TripAdvisor badges and rating widgets, work well to convert customers while they are on your site.

  1. Be Accessible

OTAs have become so popular among travel bookers because they make it so easy to book. If properties make it just as easy to book direct, more travelers will do so. In addition to an easy-to-use direct online booking process (that is also mobile friendly), lodging operators should make sure contact details are prominently displayed on all pages of the property’s website and booking process, inviting customers to reach out to the property via the method they prefer — whether that’s email, phone or text messaging.

 

While OTAs will always play an important role in online distribution, reducing dependency on OTAs and increasing direct revenue will result in a healthier bottom line for hotels. The effort is worth it!

5 Tips for Designing a Hotel Loyalty Program that Really Works

In a previous post about the benefits loyalty programs can bring to independent hotels, we highlighted a study by the Center for Hospitality Research at the Cornell School of Hotel Administration that showed independent hotels enjoyed an average 50 percent increase in annual revenue per enrolled guest, due to increased room-nights purchased. The research provides solid evidence that loyalty programs for independent hotels work.

But for any loyalty program to be successful, it has to be done right. In our current travel climate, where millennial travelers are leading a hospitality revolution, the stiff loyalty programs of big-brand hotels are losing their relevance. The complicated, elitist, rules-heavy programs of old may provide value for frequent corporate travelers, but not really for anyone else.

Software Advice, a company that evaluates hotel management systems, recently conducted a survey about millennial participation in hotel loyalty programs. The study highlights the potential for boosting loyalty program enrollment among this growing traveler segment, with 86 percent of millennials not yet participating in hotel loyalty programs. The report also debunked the common perception that millennial travelers are less loyal to brands, suggesting they are just more discerning — as are a lot of Gen Xers and Baby Boomers these days, due to wide accessibility of travel information online.

Indeed, the Software Advice report found the most common reason for millennials joining a hotel loyalty program is loyalty to a hotel brand (46 percent), followed by easy-to-earn rewards (41 percent), simple sign-up (37 percent) and a variety of reward options (19 percent). To attract loyalty members of the millennial kind, loyalty programs need to be simple, meaningful and flexible. In fact, such a program will not only appeal to millennials, but to everyone.

When it comes to designing loyalty programs, independent properties have an advantage over chain hotels; unrestricted by rigid standards, independents have more freedom to be creative and to personalize rewards. Ultimately, the perfect loyalty program should be established based on your particular property, who your guests are, and what they want.

Make it Easy to Earn Rewards

It can be difficult to see the value in a complicated reward program wrought with rules, where rewards take a long time coming — especially for infrequent travelers. To attract a wider range of members, loyalty programs should make it easy for travelers to earn and redeem points, with no black-out dates and points that never expire.

For frequent corporate guests who enjoy status recognition, a program offering tiered benefits provides them with the distinction they seek. And with points that never expire, the complicated (and awkward) situation of demoting members can be avoided.

Kimpton and Marriott hotels are making it easier than ever to earn points, now rewarding guests for sharing on social media. While some have their reservations about incentivizing social engagement, awarding points doesn’t have to be limited to nights; points could be awarded for attending hotel events like wine hour and for utilizing paid amenities like the restaurant or spa.

Deliver Instant Gratification

Businesses are more transparent and accessible than ever — and, therefore, more competitive — so rewards programs should deliver tangible value that loyal customers can enjoy sooner. In addition to a simple sign-up process, hotels are beginning to offer guests immediate perks simply for enrolling, like a free drink at the bar or a small welcome gift.

While free and discounted stays are the most popular rewards, it typically takes an infrequent traveler a long time to earn them. To maintain interest (and loyalty), properties should offer more frequent rewards that could include room upgrades or dining discounts, and throw in soft perks like late check-out, drink vouchers, a free movie rental, or in-room cookies with a personal note.

It’s all about perceived value; unexpected freebies don’t have to cost much but go a long way in winning loyal, life-long fans.

Make Loyalty Members Feel Extra Special

All guests should be made to feel appreciated, but repeat guests even more so because loyal customers are a business’ most valuable asset. How do you make guests feel appreciated? Through personalized service that demonstrates you really care.

It’s important to get to know your guests and what they like in the quest to personalize service. Thanks to detailed guest profiles in customer relationship management and property management systems, properties have the ability to store rich guest data that empowers them to provide highly personalized service that earns and maintains loyal guests.

Through face-to-face interactions, phone calls, social media engagement and guest reviews, hotels can garner valuable information about guest preferences — particularly of repeat guests who engage with hotels more often. Armed with this knowledge, properties should aim to delight loyal guests with tailored service that goes above and beyond. Imagine Ms. Smith always buys certain local chocolates from the gift shop… and her pleasant surprise to find the decadent treats waiting in her room upon arrival!

Provide Easy Access

According to the Software Advice research, most respondents (49 percent) prefer to be notified about point balances and rewards via email. This information could be combined with targeted return offers and other targeted marketing campaigns. As we’ve recommended before, all email communications should be mobile optimized.

Mobile hotel apps can also offer loyalty members the ability to check their point balance, see what rewards they are eligible for, and redeem points. A combined 58 percent of millennials that participated in the Software Advice research say they would find a mobile hotel loyalty app “very” or “moderately” valuable. Integrated with the hotel’s property management system, such an app could also greatly enhance guest profile data for loyalty program personalization.

Alternatively, many hotels offer an online dashboard that allows members to log in and view their account status.

The more transparent your loyalty program is, the easier it is for your guests to understand and engage with it.

Spread the Word

While loyalty programs are expected of large brand hotels, they are not yet as common among independent properties. Let customers know about your loyalty program on your website via a dedicated explainer page (that is linked to from the homepage and main menu), as well as through social media, in-room cards, mobile hotel app, and at the front desk.

Social media is especially valuable in building customer relationships, and through the likes of Facebook, Twitter and Instagram, your loyalty program members can become your biggest advocates.

With a flexible loyalty program that offers guests what they really want, independent properties can attract and retain repeat business from all types of travelers across all generations. WebRezPro property management system now offers integration with two sophisticated loyalty programs — Preferred Patron and Stash Hotel Rewards — simplifying guest rewards management for independent hotels.