22Mar

The Case for Enhanced Loyalty: What Traditional Hotels Can Learn from Casinos

Author: John Wallace

For many properties, capturing total guest value (TGV) has many hurdles. Property Management Systems that don’t capture adequate data, disparate reporting systems and a simple lack of customer data from indirect booking channels all contribute to those challenges. Casinos have some of the most effective methods for capturing customer value and leveraging that information to enhance customer loyalty. In many ways, traditional hotels should look to these casino properties for ideas on how to better understand their customer and personalize the guest journey.

The recent trend in hospitality has been to encourage existing loyalty members and new guests to sign up for their loyalty program and to use the hotel or brand website to book reservations. The most common enticements are providing a discount and bonus points for the direct booking. However, while it’s true that direct bookings can result in lower acquisition costs, offering too much of a discount may ultimately result in a dilution of profit while not actually fostering additional loyalty. Casino hotels encourage enhanced loyalty by engaging their guests with a broader range of amenities and experiences such as gaming promotions and events, bars and restaurants, retail shops, entertainment and more. The incentives offered by casinos are highly targeted and personalized based on TGV and customer preference which limits the dilution to revenue and profit.

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Casinos understand that customer value and personalization are vital in how they segment their business, so they tailor offers and opportunities to the individual guest. The segmentation they obtain from their data is sophisticated, carrying visibility into guest behaviors, preferences, demographics and spending history.

Enhanced customer loyalty brings a host of benefits to your property. First, with a known customer, you can track historical stay and spend patterns by location and booking channel. This gives you the ability to send and track offers and promotions via one or more contact points. As you gather data pertaining to offers, you’ll accumulate a history of point redemption timing and type, allowing you to further target your offers and refine your segments. The result is a positive impact to your bottom line with higher conversion rates and lower acquisition costs.                                                                                                        

The shift in distribution channels has in a sense hurt traditional hotels. With more and more business booking indirect, traditional properties have limited access to a large portion of the customers’ data. On the other hand, you’ll rarely find a regional casino customer booking through an OTA. The casino guest would miss out on their loyalty membership points, they won’t get special offers, and they won’t get a tailored experience unless they book direct. By incentivizing guests to book directly with personalized offers and rewards points, you’ll drive more business to your direct channels but more importantly, enhance the loyalty of your guests and drive stronger customer lifetime value (CLV).

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The Harrah’s Total Rewards Program: A Success Story

Harrah’s success in tracking a staggering 80% of their guests through their Total Rewards program provides insight into how a leading-edge loyalty program works.  First, Total Rewards has an aspirational element which gives guests attainable rewards at smaller point increments, such as white glove service in the Seven Stars Lounge or luxury merchandise. Control over their points is a huge benefit for Harrah’s guests because members can use their Reward Credits for whatever, whenever, and however they want. The card is usable at any Total Rewards Casino across all brands regardless of where it was issued.  Finally, Members are offered ‘More Ways to Win’ via exciting and robust promotions that are not available to non-members.

When it comes to enhancing loyalty and leveraging TGV, there is plenty that traditional hotels can learn from the casino world. A powerful suite of tools helps properties build strong, sustainable relationships with key guests. With more data-driven loyalty programs it’s easier than ever to get the right message to the right customer at the right time.

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