Why should you focus on Loyal guests in Hospitality?

29 November 2022 | By Axovia | COMMUNICATION

Why should you focus on Loyal guests in Hospitality?

What is a Loyalty Program?

Loyalty Program, Rewards, Advantages… are some of the many names you can hear in the Hospitality industry when giving a name to the strategies to increase your loyal guests.

Hotel Loyalty Programs are a specific strategy to reward and value your returning customers for choosing your hotel again and again.

From boutique hotels, luxury hotels, resorts or hotel chains, there are many ways to build a strong and effective program depending on each hotel type and market you are aiming to or whether you’d like to enhance your customer’s current stay, or future stay with tailor-made ancillaries, exclusive discounts or free-nights advantages.

Considering loyal guests is a key to driving your direct bookings to another level, in this article, we’ll explain why you should focus on your loyal guests and the advantages of having a reward program running in your hotel.

Key data you should know about Customer Retention

Whatever Marketing Studies you’re looking at, the data on Customer Acquisition vs Retention Costs is well established.

Here is why you should consider strengthening your Retention strategy

Acquiring a new customer can cost five to 25 more times than selling to an existing customer
The probability of selling to an existing customer is 60/70% while the probability of selling to a new prospect is 5-20%
Existing customers are 50% more likely to try new products and spend 31% more when compared to a new customer.
Increasing retention rate by 5% can increase your profit by 25% to 95%

Some other data more focused on the Hospitality industry:

A Cornell University Report states that guests with memberships stay more nights and generate up to 50% more revenue
Loyal guests are more likely to recommend to family & friends, share on social media and help with positive reputation

3 Advantages you can expect from your Loyalty Program

Enhanced & tailor-made guest experiences -

Enhance your hotel experience by knowing & valuing returning guests. Having an organized cardex, with each of your guest profiles, is one of the keys to assure a top-notch stay and service experience for your guests. Preferences, interest, and behavior will be recognized, anticipated and taken care of, creating a tailor-made guest experience.

Direct booking impact with better profit

Additionally, to increasing the customer retention and driving more bookings from existing guests that will return and enjoy their over-time rewards, a loyalty program with instant added values and perks can also be the decision maker for an undecided traveler, attracting them in the first place.

Attracting new & returning guests through your direct channel will per definition make you save money on commission of third parties like the OTAs.

Increased Ancillary Revenue

Returning guests are more likely to spend more money on ancillary services, extras in F&B and amenities. Creating a memorable experience for a satisfied guest will also make him comfortable and confident to keep spending money through time, as he’ll be ensured with his value for money.

By Axovia