Everything you need to know about loyalty programs

Loyalty programs can be of great benefit to your hotel. However, you must pinpoint relevant rewards to offer to your members and optimize your program to keep them active. The following article focuses on this approach.

• Reasons for a loyalty program

Loyalty programs are well known for creating a win-win situation: Guests get rewarded for their loyalty, and, in exchange, the hotel collects guest data and increases its retention rate. Loyalty programs are proven to have a positive impact on member-guest stay frequency and hotel revenues.

• Types of rewards to offer

Loyalty programs make it possible for guests to accumulate points to get free nights. However, there are other rewards you can offer your guests. As a hotelier, it’s up to you to survey guests and ask them what they want. Some guests may prefer immediate small discounts or other rewards rather than having to wait for a more substantial gift on a future stay. Immediate rewards you can offer guests are free access to the mini bar or a credit applicable to your spa or restaurant. You could also offer them a free drink at the bar, free late check-out or free movie rental. The point is that the guest should feel privileged to be a member of your program and view membership as real added value.

However, rewards need not be limited to your establishment. In partnership with local attractions, you can offer discounts or free admission to local activities such as winery tours, festivals, museums, spas or ski resorts. Moreover, you need not offer these rewards in exchange for points; you can choose to offer guests rewards simply because they hold privileged “member” status. You can also leverage occasions such as members’ birthdays or their tenth visit to your hotel as a gift of appreciation. The important point is to ensure your member-guests feel privileged and receive rewards that are of interest to them. It’s best to offer your guests a variety of rewards and let them choose which they prefer instead of imposing a specific reward on them.

• Making sure your program is effective

It’s a good idea to have a loyalty program, but it’s more important to keep your members active. If your members feel confused, disappointed or frustrated with your program, they’ll stop being active. To avoid this pitfall, you must communicate with your members clearly and frequently. Tell them how they can use their points or what reward they can receive during their next stay to encourage them to stay active. Also, the process to redeem reward points must be as easy as possible. To keep things simple, consider creating a member web portal where they can log in and view their member profile, points balance and the rewards available. The portal could also make it possible to redeem points directly or, at the very least, clearly explain how to do so.

To make the most of the points offered to your member-guests, it might be a good idea to offer them points as soon as they purchase something in your establishment, such as dining at your restaurant or using your spa facilities. This way, you encourage your guests to take advantage of your various services and allow them to increase their points without having to stay at your hotel overnight. You could also offer points to guests when they book a stay directly on your website. In this way, you’ll increase direct bookings and let your members accumulate points.

When setting up a loyalty program, it’s essential to feature it on your website, ideally, with a dedicated webpage. Your reception staff should also be trained to promote it to guests.

Setting up a user-friendly loyalty program that offers members relevant rewards can have a significant positive impact on your operations.