Loyalty programs have become a standard for many hotel brands. But if you are a smaller establishment, or you don’t have a hotel rewards programme in place, you may be struggling with the question of whether it is worth it. And rightly so. They bring up a whole host of questions and costs.
Six things to consider if you are on the fence about implementing a hotel loyalty program
1. Is your hotel independent or part of a group?
Generally speaking, most large hotel groups operate some type of hotel loyalty program, whereas independent hotels and small groups do not because they lack the volume of frequent guests and the resources needed to justify running a program. For midsized hotel groups, it’s more of a dilemma.
2. Are your guests primarily leisure or business travelers?
Loyalty programs tend to be more popular with business travelers than leisure travelers, who travel less frequently and find it harder to accumulate points. In a recent survey by Oracle, 30 percent of leisure travelers said that earning or redeeming points does not influence their hotel choice, whereas 82 percent of business travelers said that they are likely to book a hotel where they can earn points. (Oracle, 2018.)
3. How frequently do travelers return to your destination?
City hotels typically receive more repeat guests and business travelers than resort properties, although there are exceptions to the rule. It’s important to look at your destination as a whole. Even though your property may not receive a lot of repeat guests, it’s possible that your competitors do.
4. Do your competitors have a loyalty program?
When all else is equal, many travelers will choose a hotel that offers a hotel rewards program over one that does not, so it’s important to know what your competitors are offering.
5. Do you have the resources?
A hotel loyalty program can be time-consuming and costly. Before you decide to launch one, ensure that you have appropriate staffing and resources in place to manage the program successfully over the long term.
6. How effectively could you build loyalty without a formal program?
Would the resources required to operate a hotel loyalty program be better spent elsewhere? There are lots of ways to earn, recognize and reward guest loyalty without a formal membership program.
Whether you are a smaller brand still considering the options, or a larger chain looking to expand or revamp an existing program, check out our webinar on hotel loyalty for deeper insight. We offer 12 tips as well as an expert opinion from Teresa Comparato, Senior Director and Head of Loyalty, Europe, Africa and Middle East, Radisson Hotel Group.