Guests and hotels reap significant benefits from loyalty program memberships. Guests earn exclusive perks, discounts, and first-to-know deals. Hotels enjoy increased revenue per guest enrolled in the program. A 2014 study by the Cornell University School of Hotel Administration found guests with hotel rewards memberships stayed more nights than guests”and generated approximately 50 percent more revenue.
Though the rewards are real, there are hurdles to setting up loyalty programs. They require resources (time and money) to set up and maintain. You also have to market your program to ensure guest buy-in. Read on for tips and strategies to help you onboard a hotel loyalty program that brings long-term value to your properties.
Discover how to set up the best hotel loyalty program
1. Determine if your hotel group would benefit from a rewards program
For some small, independent, and boutique hotels with a handful of properties, a rewards program may not be cost-effective. You need people to decide on the best approach and rewards, as well as a technology platform to track members, reward points, and redemptions. Once set up, the program requires ongoing management. Even if you pay a service to manage the program, someone in-house must also monitor its success and ROI.
Some low-overhead and low-maintenance reward ideas to consider:
- Rewards punch cards for every guest to use in the hotel cafe. This can encourage guests to grab a yogurt parfait or a cappuccino on-site, rather than heading to spend money elsewhere. The key is to make the reward attainable. Think one free cafe item after purchasing five items rather than ten items.
- An automatic 15 percent restaurant discount included with every direct booking.
- A partnership reward with the local tourist bureau, a 5-star restaurant, or a nearby spa. You include a discount for tourist excursions, dinners, or massages with a booking. In return, those businesses recommend your hotel as a preferred place to stay.
For small hotel groups with more than a handful of properties and mid-size hotel groups”a formal digital rewards program is often worth the cost. The benefits are the ones mentioned above: longer stays, higher spending during visits, and (of course) loyalty to your brand. Pro tip: Business travelers look for properties that offer rewards.
2. Build your own hotel rewards platform or choose a service
If you’ve chosen to launch a formal rewards program that guests can track, you’ve got to decide the path forward. Options include:
- Building the rewards program yourself. You’ll be in charge of every detail, from creating a portal on your website, and possibly designing an app for the program. This approach lets you maintain full control over the look, feel, and rewards of the program. On the downside, it is time and labor-intensive in both the creation and management phases.
- Partnering with a loyalty program service provider. Reward program companies, such as Spoonify, will help you build a branded reward program for your hotels. These programs are customizable, ready-to-build, and include marketing and reporting.
- Joining a hotel rewards network. You add your properties to an existing rewards network with members who search for hotels in the network.
Many hotels will benefit from setting up their own programs and participating in rewards networks. If you go that route, make sure the network’s reward aligns with your brand.
3. Define ˜loyalty’ for your hotel properties”and keep it simple
When will people receive rewards, and how will they accrue points? Make these decisions strategically, so the program is valuable to your guests and to your hotel’s bottom line.
Different types of ˜loyalty’ you may reward:
- Room bookings and upgrades
- The anniversary date of joining
- The customer’s birthday
- Social media shoutouts
- Newsletter signups
- Spending in the bar, restaurant, or cafe
- Frequent stays
- Extended stays
Your rewards benefits and HOW guests accumulate them should be simple and crystal clear. People won’t join if the program is complicated and they don’t immediately understand how they’ll benefit. The rewards should also be meaningful and fair. Changing up your rewards process can result in frustration at the least. Starbucks faced a fierce backlash after updating their loyalty program in 2019.
Finally, you’ll have to consider restrictions carefully. Will you have blackout dates for point redemption during busy seasons? Will points expire if not used in a specific time frame. Will the rewards membership expire if activity drops off for a year or 18 months?
4. Create personalized and experiential hotel rewards
Rewards are the heart of any loyalty program, so they should be valuable to the people you want to draw to your hotel. Of course, different customer segments appreciate different rewards. Free cappuccinos from the coffee bar are lovely, but families ushering kids to a nearby tourist attraction may not have time for that. Better to let them redeem some of their rewards at the tourist attraction. Professional travelers, on the other hand, appreciate the choice to redeem points for cappuccinos in your comfortable hotel business center.
The best rewards programs offer a mix of instant rewards and more valuable long-term rewards. This captures a blend of business and leisure travelers, and helps members stay invested in the program.
Unsurprisingly, experiences are popular rewards, whether it’s a half-price day at the spa or a private tasting with a local celebrity chef.
Hotel reward ideas to consider for your properties:
- Free birthday pastry from the cafe (redeemable before the guest’s next birthday)
- Complimentary mini-bar
- Provide swag bags on arrival to loyalty members who were active for a year
- Complimentary upgrades
- Ability to use rewards in your restaurant or bar
- Members-only cooking classes or ˜wine and paint’ nights
- Partnered discounts to local attractions, museums, and restaurants
- Early check-in and late checkout
- Free breakfast
- A cooking class with the restaurant chef
- A wine tasting with the hotel sommelier
Business-focused hotel reward ideas to consider:
- Reduced price in-meeting lunch delivery from the cafe
- Unlimited coffee service for group meetings
- Discounts for mid-week corporate team building events
- Discounted massages at the spa
- Nine holes at a nearby golf course
5. Survey your guests to make sure you get the rewards right
Post-stay surveys are an efficient method of narrowing down your rewards options. Send out brief surveys to clarify what your guests appreciated most about their stay, what they would look forward to experiencing again, and what they wished you offered. You can also ask your front desk staff to talk with guests about their favorite perks, and what will inspire them to return to the property.
Things guests appreciate and the unique rewards they can inspire:
- Fresh and free coffee in the lobby. Possible reward: A fresh French press of coffee delivered to the room ten minutes after arrival.
- Flavored spa water. Possible reward: In-room flavored spa water dispensers.
- Gym attendant in the mornings and evenings. Possible reward: A yoga or strength-training class with a local fitness instructor.
6. Consider adding tiers to your hotel loyalty program
Reward your frequent guests by offering tiers, so perks improve the more guests stay at your hotel or the more they spend. You’ve no doubt encountered this with reward programs that progress from silver to gold to platinum. But you can keep it simple, with a two-tier rewards program.
The entry-level tier should include immediate rewards (such as a free latte or a branded travel mug), plus valuable rewards as points accrue. The second-tier should offer luxury perks and personalized rewards, such as free spa days, an added overnight stay, or craft brew tastings. Make sure the rewards of the second tier are appealing enough to encourage spending”without setting an impossibly high bar.
Here too, clear communication is vital. How many points do members need to build up to reach the second tier? And how long do they have to reach that mark?
7. Consider additional hotel rewards targeted for event planners and groups
Your loyalty program is, of course, available to event and corporate planners booking groups at your properties. But it is an exclusive program offering rewards to event planners and corporate planners that you track on your hotel CRM software.
To start, go back and review your bookings for the previous three to five years. Hopefully, you should already have a good relationship with planners who have booked with you. But you’ll want to make sure you reach out to planners who make repeat venue bookings or reserve large room blocks.
Once you have a list of planners, craft an email that spells out rewards for group reservations and repeat venue bookings. You can also offer rewards for venue referrals that lead to a booking. Possible rewards:
- One morning’s coffee break included for weekend conferences.
- Cover the cost of a simple swag item, such as reusable straws or pens.
- Discounts for attendees in the hotel gift shop or spa.
- A donation to a charity in the planner’s name.
8. Market your loyalty program to sustain engagement for the long-term
Though loyalty membership is high, hotels struggle to sustain program engagement. You need to make sure every guest knows about the reward program, that it stays relevant to them, and is easy to track. Here are marketing strategies to keep your hotel rewards program top of mind:
Give them multiple points of entry.
People are busy. The guest who missed their first opportunity to join your program may jump at it later. Here’s when to reach out:
- Booking confirmation emails
- Follow-up emails
- Signage at check-in
- In-room material
- A prominent portal on your website
Social media advertising.
Entice membership through social posts across platforms. Include visuals that demonstrate the benefits at a glance. Showcase that one-of-a-kind view from a suite available at regular room price for VIP rewards members. Or, share the original chef-prepared dinner served to a sales team at the end of a four-day training.
A dedicated loyalty program app.
This is the simplest way for guests to track their tier level and rewards. Engaging graphics can also influence spending by showing rewards members that they are approaching the next level or they’ve reached enough points for an extra night. With notifications, you can also alert them to new rewards or expiring points.
Design a must-join hotel loyalty program for your properties today!
Hotel loyalty programs have real value when focused on what your guests care about. Use these tips to build a program that boosts revenue and engagement for your properties.