22Feb

Redefine the Path to Loyalty: Revenue Management Best Practices for 2018

Author: Avanti Joglekar

Hotels are clamoring to deliver personalized experiences to inspire loyalty among their guests. But a definition of what loyalty entails is the biggest limiting factor to capitalizing on having a loyal base of repeat business to your properties.

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What is Loyalty?

Traditional loyalty programs are working well for hoteliers, but perhaps not always for the guests. Big brand hotels use point systems, with points redeemed for free nights. A guest may frequent these properties for business purposes, but when the time comes to go on vacation, those points do little to inspire loyalty. Today, some guests aren’t attracted by points for a free night at a ubiquitous chain and may spend more for a personalized experience even if they have a free night at a big brand property.

Traditional hotels can learn a lot from casinos about inspiring loyalty. Casinos reward loyalty with free rooms, buffets, and other amenities based on what the guest is doing on-property. The more data captured on guest spend and behavior at a casino property, the more the property understands what matters to the them. 

One key insight into inspiring loyalty comes from your ancillary revenues. Capturing the places guests spend their additional dollars, from food and beverage to spa services to gambling, is key to delivering the personalized experience that will bring your customers back. 

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Redefining the Path to Loyalty

Hotels need to consider alternative methods to gaining guest loyalty, especially from its most valuable customers. One best practice is delivering the highly personalized experience that guests are coming to expect. For example, a program that offers a guest the ability to set up a profile through your website and indicate what amenities they’d like to receive upon arriving could drive your direct bookings. Another simple strategy is offering a discount on minibar purchases, which makes them more comfortable with spending more on the in-room offerings.

The places where guests spend their money is key to determining what matters to them. Unfortunately, when you consider how many different ways a guest could pay for the services they seek, it can be difficult to gather all the data necessary to understand what the guest sought to experience.

A tactic that solves this problem is leveraging technology to incentivize the guest to make their spending habits when on-property known. For example, implementing a system that captures a guest’s spend no matter how they pay on your property will both provide you with essential data on what drives ancillary revenues and allow you to promote loyalty to your guest in a way that they will find most useful.

The path to profitability via loyalty starts with defining what loyalty is for a guest. Data on guest spending is essential to making sure your property can track what guests consider valuable to their experience, which will in turn allow you to create the personalized experience that will drive direct bookings and high profits.

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