8 Customer Retention Strategies for Hotels You Can Implement Today

In the world of hotel sales, the value of a repeat guest cannot be overstated. According to multiple studies, gaining a new customer costs anywhere from five to eight times more than retaining an existing one. Crafting your guest retention strategy can earn you a huge amount of revenue in the long run, as well as providing some other key benefits:

• Develop a loyal, profitable customer base.
• Reduce guest acquisition costs.
• Create a strong network of promoters.
• Encourage direct booking to reduce OTA commission fees.
• Upsell and cross-sell your services to those who already value you

But in an increasingly complicated environment of OTA’s, non-traditional hotel offerings, increased competition, and instant feedback and reviews online, it is challenging for hotels to differentiate their offerings and craft a customer retention strategy that will keep their guests coming back. 

Read on for 8 tips that will help you craft the perfect guest retention strategy for your hotel.

1. Assess past bookings to identify priority guests.

First, focus your efforts by qualifying and prioritizing past guests the same way you would qualify new leads. The criteria you use to qualify new leads won’t necessarily apply, so you’ll need to use different criteria to find your VIPs. You can use a model based on recency, monetary value, and frequency to categorize past guests and craft an outreach strategy based on their behavior and importance. This allows you to distinguish between guests who stayed 1 month ago vs 2 years ago (recency), those who spent $10,000 vs. $1,000 (monetary value), and guests who stay 6 times a year vs. 1 (frequency). 

Once you have identified your heroes (guests who stayed recently, spent a lot of money, and come back often), you can craft a strategy to keep those VIPs returning to your property. These are the guests who will become excellent brand ambassadors, but you’ll need to personalize their experience and develop a strong relationship with them first. 

2. Explore your CRM for old leads. 

Your CRM contains a goldmine of information about past business, but only if you’re looking for it. At least once per quarter, review your old leads to look for any potential repeat bookers. One misplaced tag or incorrectly categorized entry can keep you from seeing a great lead, so make sure to take a holistic view and widen the net of your search. It will take time to look through everything, but could save you a huge amount of time and money in the long run.

3. Market to your guests’ past interests. 

Once you’ve identified some great leads in your CRM system, it’s time to reach out and add value. Note any past interests, activities, or behaviors that the guest displayed during their last stay and use that information to craft your outreach. Did they order the brownie fudge sundae five times in one stay? Send a message with a free sundae when they book. Did a group ask for restaurant recommendations last time? Send a list of all the new restaurants that have opened since their stay. There are numerous ways to use your CRM to boost group business and repeat bookings, and your only limit is your creativity.

4. Understand the motivations behind repeat bookings.

For business travelers, brand loyalty often depends on the brands that can make business travel feel less lonely, boring, repetitive, or stressful. Creating environments that substitute for family or home is challenging, but offers huge rewards for brands that can master it. Things like personalized greetings from staff, gestures when things are going very well (or very poorly), and offers that prove you know the person start to create a strong relationship that can feel like family for a road-weary traveler.

Try to craft guest experiences that create community, relationships, and a sense of home. This could include a morning coffee hour, a lending library, chicken soup sent to the room when a guest is sick, greeting guests by name, and more. By understanding what is motivating a repeat booking you can double down on the good and eliminate unnecessary efforts.

5. Offer the right repeat booking incentives.

Your loyalty program should provide value to your repeat guests and entice them to come back to your hotel again and again. But going beyond your brand’s loyalty program can provide even greater rewards and create customers and brand ambassadors for life. Which is more motivating to you – points on a card that will eventually (maybe) add up to a free room for one night, or a free coffee every morning of your stay at your favorite coffee shop? While loyalty points may offer more monetary value to a guest, a customized incentive may be far more motivating and add more personal touch. 

As you offer repeat incentives, keep track of them in your CRM to see which ones guests acted on. As you associate these incentives with your guest booking personas, you’ll start to see what motivates repeat bookings for different audience members and be able to further focus your efforts.

6. Apply guest feedback to future stays.

Let’s imagine that you had a great experience at a hotel, but found transportation to and from the airport to be a nightmare. You write this in your hotel review, but decide you probably won’t stay again because of that experience. Now fast forward 6 months to an email from that hotel, letting you know that because of your review the hotel now offers free airport transportation. Do you think you would stay again?

Guest feedback is not only a powerful way to improve your offering; it’s a potentially huge motivational tool for future stays when acted upon. Use guest feedback to personalize your outreach and create trust with your guests. Note any feedback you receive in your CRM, so that when you reach out in the future you can customize your message. An email saying we know you loved the rooftop garden during your last stay shows that you listened to the guest and care about what makes their stay special.

7. Know your VIPs and personalize their experience.

Once your guests arrive, everything you do should be about serving and facilitating their specific wants and needs with gracious, personalized service. At the end of the day, good old-fashioned customer service is one of the best retention strategies in the book. According to a study done by MCD Partners, 74% of travelers reported interest in substantial proactive involvement from hotels during their stay in order to make their visits better. The more you can provide a great experience for your VIPs, the more likely they will be to return.

Identify your VIPs before their stay, and make sure your staff are aware of their wants and needs ahead of time. Greet them by name, put their favorite beverage in their room, or leave a list of the best Italian restaurants in the city on their desk – these small gestures won’t take much time, but will go a long way towards creating a strong relationship with your most valuable guests.

8. Automate follow-up to keep the conversation going.

Not all of your outreach has to take up valuable employee time. By using marketing automation, you can reach out to guests at key intervals after their stay, including 1 day, 1 week, 1 month, and 3 months after. Your messaging to guests at these times can include requests for feedback or reviews, requests for referrals, rewards for booking another stay, personalized value-adds, or custom information related to their interests. Automating your outreach ensures that no communications falls through the cracks, and gives you much more leeway to personalize messages for different audience segments.

Now your hotel is ready to retain more customers than ever before!

Use these 8 customer retention tips and your guests will feel valued and understood, and keep coming back to your hotel again and again.

Don’t forget to reward those repeat guests! Check out some great options for budget-friendly perks and rewards for your group bookings.

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