Loyalty an essential strategy in a post Covid scenario

The crisis generated by COVID-19 has left a very complicated situation in the hotel industry. Hotels have focused on adapting their operational processes, but they are already seeing that demand has changed.

And while it is recovering, in the coming months the competition for the client will be fierce, and the hotel direct sales channel will play a fundamental role in order to capture and retain the client. In this context, the personalization and differentiation of the customer experience through a loyalty program will be more important than ever.

How can we improve the personalization and shopping experience of the hotel direct channel?

A well-structured and effective loyalty program can help your hotel increase direct channel bookings by up to 18% in your first year, providing greater competitiveness and visibility to your official website, improving conversion rates and attracting customers.

Any hotel, no matter how small, can work to improve guest loyalty. Many hotels already have as strategies to offer their best clients special treatment. When you take that online, put it on your website and automate Loyalty fulfilment processes, the upside for your business can be very high.

Graph 1 shows the evolution of Loyalty sales of one of clients, since launching their Loyalty program

evolution in sales and bookings

How can a Loyalty program help you increase sales?

– It prevents negative disparities, improving hotel competitiveness vs OTAs by an average of 33%, and naturally increasing direct channel sales.

– It allows you to better compete in metasearch engines. By sending the special loyalty prices metasearchers you will improve the impression shares, click through and conversion rates of your campaigns.

– It helps you capture data from your clients during the registration process, both from users having made a booking and users having just registered but not booked. Graph 2 is a real example from a hotel, showing the volume of potential customers (not having made a booking) captured during the registration process.

You can also invite guests to the program when they connect to your hotel’s Wi-Fi or when use your check-in online tool. Connecting your different systems will help you exponentially increase sign-ups. Graph 2 shows that more than half of registrations in this loyalty program came from the hotel’s Wi-Fi registration.

oyalty members from a roiback hotel

Loyalty customers have a higher yield for hotels, with 11% longer stays and 5% higher average booking value.

– Loyalty program members have 22% higher lead times, which helps the hotel`s occupancy strategy.

– Also, they tend to book premium rooms, improving ADR and selling rooms that are harder to  sell.

– Finally, in addition to improving profitability, customizing the experience improves the perception that guests have of your hotel.

How to further develop your Loyalty program?

One of the keys of your Loyalty program will be to capture repeat customers: they spend more and travel more frequently, so they will be your highest yielding customer types.

Graph 3 shows how a Spanish holiday chain achieved over 30% of repeat business over an 18-month period by working on client segmentation, defining different benefits for each level, and defining a consistent program communication plan.

repeat customers in a spanish hotel chain

To get to a similar level, your booking engine needs a Loyalty Engine that allows you to configure and implement business rules of your program (levels and specific benefits per level). You should take into account not only the value of each customer and the frequency of purchase, but also the recency. That is, the time elapsed since the client’s last stay.

In a nutshell…

By offering your customers specific benefits based on their level of loyalty, you will generate a greater motivation to book and achieve higher differentiation over competing hotels and other reservation channels.

A simple loyalty program improves the visibility of your official website, is a powerful conversion tool and significantly increases the ADR of your direct channel.

But if what you want to do is drive repeat purchases, your program must go much further than a simple discount or promotional code, as many booking engines propose.

You will need to automate the reservation processes with tools that allow you to identify your clients, personalize their experience according to the value that each one represents for your hotel and offer them exclusive benefits and advantages automatically, following the program rules.

At Roiback, we were the first to offer a loyalty program for the hotel direct channel. Now we have improved it, launching our Loyalty Advance program which provide more and better functionalities to enhance the experience of your customers and increase your profitability: User levels; discounts, rates or specific benefits by user level; Client area with advanced functions and direct integration with online check-in, WIFI and CRM platforms.

If you want to know more about our loyalty platform and how we can help you boost your direct channel, do not hesitate your direct channel specialist.

Leo Llorentenoviembre 6, 2020

Leo Llorente

Head of Product. Leo has over 15 years experience within the industry and has a passion for leading high performance teams.