The transient nature of tourism means that repeat business isn’t always easy to come by. And the stats illustrate that; within travel and hospitality, customer retention rates often lag behind other industries.
However, we can draw valuable lessons from sectors with higher retention rates and explore how these insights could transform the hospitality industry.
Here, we investigate the significance of structuring your services to build hotel customer loyalty and incentivise repeat visits.
Increasing retention rates by just 5% can lead to profit boosts of between 25% and 95%.
Why consider loyalty programmes in hospitality?
Attracting new customers can be five times more expensive than keeping existing ones. This makes an engaging loyalty programme not just a smart move, but a necessary investment. The key is to create incentives that genuinely appeal to your guests.
Start by analysing your data to identify popular offerings. Combine this with customer feedback to build a reward scheme that resonates with your audience. Research indicates that 54% of customers are more likely to make repeat purchases if they feel personally appreciated by a brand.
An effective way to gather this information is through targeted post-experience surveys. Instead of leaving questions open-ended, offer specific options to simplify their responses.
For example, you might ask:
- What would encourage you to return?
- Discounts on future stays
- Points for rewards
- Access to exclusive events
- Complimentary upgrades
Asking relevant, specific questions not only helps inform what your loyalty scheme offers, but increases your connection with guests, as they feel valued. This is especially true when/if changes are made to the loyalty programme that reflect their feedback!
Benefits of loyalty programmes for hotels and travel brands
Travellers are equipped with tools to curate their travel experiences in a way never previously seen; from the gap year student, to family holidays, to the silver surfers. A range of price comparison sites, competing venues and optimised search engines allow them to find the best deal, in the best place, at the best time.
Brands that cultivate strong relationships with their clientele are better positioned to deliver tailored offers and create lasting connections.
With this in mind, it makes sense that , 94% of the world's leading hotel brands feature a loyalty programme, each presenting an array of rewards from points systems to exclusive experiences. And with 894 million members across the top seven hotel loyalty programmes, it’s working.
A 2% increase in customer retention is the same to profits as cutting costs by 10%
Murphy and Murphy
Businesses that go beyond a one-time offer will find greater engagement with their target audience. An engaged customer base can provide essential insights to help enhance customer retention and inform strategic marketing initiatives.
British Airways Holidays found that by collecting user-generated content from its verified reviews that it could stop using stock imagery in its marketing campaigns – instead, utilising the varied range of photos from its happy holidaymakers.
What makes a good loyalty programme for hotels?
A successful loyalty programme for the travel and tourism industry clearly communicates its value to customers, ensuring they understand how to earn and redeem rewards. Personalising rewards based on individual preferences, tracked through CRM software, enhances customer connections and increases loyalty.
A loyalty programme is part of your customer experience, so ensure it’s as efficient and helpful as your staff :
- User-friendliness is integral: 47% of people say that great customer service will encourage them to stay loyal to a brand.
- Earning and redeeming rewards should be seamless.
- Complicated systems can frustrate customers and deter participation.
Once your loyalty programme is established, it’s crucial to continue to evaluate its effectiveness and how customers interact with it. Gathering customer feedback shows you what elements resonate and what may need refinement. Data derived from feedback forms can drive enhancements to the programme, support targeted marketing efforts, and even help increase overall hotel customer satisfaction.
Understanding customer needs in loyalty programmes
A key aspect of crafting a successful loyalty programme is recognising the separate requirements of leisure and business travellers. Business guests tend to be more regular users, often favouring the targets offered by tiered rewards. In contrast, leisure travellers may appreciate discounts and offers that enhance their next holiday experience, such as reduced car hire or complimentary breakfasts.
Offering exclusive promotional events or partnerships with local businesses can benefit the experience, creating a sense of community and exclusivity for loyalty members.
A prime example is Booking.com’s ‘Genius’ programme, which successfully caters to both segments with its varied rewards structure. Incorporating sustainable initiatives—like carbon offsets or Feefo’s own ‘feedback into forests scheme’,”Treefo” —can differentiate your brand, as 74% of consumers prioritise sustainability in their purchasing decisions.
For over 15 years, Feefo has been at the forefront of gathering insightful hospitality and travel reviews. Clients such as British Airways Holidays , AAA Travel, and Cottages.com have harnessed verified customer feedback to enhance their services, optimise operations, and proactively boost customer loyalty.
For further insights on transforming customer reviews into actionable strategies, explore more at Feefo’s resource centre.
