Encouraging repeat bookings through loyalty programs and data science

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End-to-end personalized service makes guests happy and devoted

by James Careless

Once upon a time, hotel loyalty programs were all about rewarding regular guests with points and that was about it. Then loyalty programs such as Hilton Honors, Marriott Rewards and Wyndham Rewards, among others, started enhancing the programs and offering new services through their smartphone apps, and everything changed.

For example, the downloadable Hilton Honors app provides users with the ability to choose the room they want, check in remotely and even turn their smartphone into a “digital key” to open the room door. The Hilton app also allows users to “order extras like food, drinks, extra pillows and more to be in your room when you arrive,” says the Hilton Honors Android app download page at Google Play, all while receiving “our best rate guaranteed – with no hidden booking fees.”

The customer data collected by loyalty programs is what makes their exceptional offerings possible. “All the information that a guest provides helps the hotel operator provide them with truly personalized service,” says Cindy Estis Green, CEO of Kalibri Labs. This enhanced service “gives that guest many reasons to be loyal to this operator and their hotels, whether they are frequent stayers or just occasional travelers.”

The industry trendsetter

According to Estis Green, the growing popularity of loyalty programs among consumers is a major trend driving customer bookings today. Loyalty apps are an important aspect of this trend, because they make booking rooms easy and convenient.

Hotel-branded apps used by loyalty members are also very good for business. Thanks to the convenience and personalization, these programs are motivating loyalty members to book rooms with hotel operators directly, rather than using third-party sites that charge commission fees to hotels. The result is more money in operators’ pockets, and better control of their guests’ booking experiences.

“These mobile apps are extremely effective as booking generators for hotel operators,” says Estis Green. “These apps encourage users to be loyal to a specific hotel brand, which is key to making them repeat customers.”

Tangible benefits for everyone

The hotel business is an industry where happy customers translate into high occupancy rates and respectable revenues (assuming that the rooms, amenities and premium services have been priced with a profit margin built in). This is why loyalty programs are popular with hoteliers and guests alike: because they provide tangible benefits for everyone.

Beyond the benefits to hoteliers already noted, loyalty programs and their apps harness the power of convenience to boost customer fidelity; to increase the likelihood that they will stay with the same hotel operator again and again.

It’s all about customer convenience: When a loyalty program member can book their next room without hassle through their smartphone, they are far less prone to shop around at other hotel chains. Without realizing it, such a guest is being ‘gated’ to the operator’s properties; creating new sales at minimal cost to the hotel operator.

Loyalty program apps provide hotels with a direct marketing path to the customer. Whenever a hotelier develops a sales promotion to appeal to a specific group of guests, the app on their smartphones provides a consistent, reliable way to get it to them and to know that the guest has indicated an interest in receiving a specific type of offer.

App users definitely benefit loyalty members too, and not just because they make booking easy. The loyalty program extras that these apps provide make members feel important and valued in an increasingly anonymous world.

“The personal service these guests can receive – consistent attention to their individual details and preferences, and the convenience of fast check-in/check-out, access to rooms, pools, and other hotel features – makes the hotel apps irresistible to guests,” says Estis Green. “The value they receive is very real to these customers, as is their level of happiness, satisfaction, and loyalty with the hotels that provide these apps.”

The data science possibilities of loyalty programs

‘Data science’ is one of Kalibri Labs’ core services to the hotel industry. In this instance, data science refers to crunching all the guest-related information collected by loyalty program operators on an ongoing basis. The more personal selections its members make, the more the hotel learns about their preferences – and how to sell to them.

“Without looking at the specific identities of guests, we can learn important information about the kinds of guests they are – occasional or frequent; budget or luxury minded – and how this relates to their buying decisions at the hotel,” says Estis Green. Such decisions can range from the level of rooms they book and the premium amenities they are willing to pay for, to the services they use while on the premises, including restaurants, room service and spa treatments.

A loyalty program analysis can tell an operator which types of rooms and services are most popular with guests – and thus worth focusing on. The analysis can also highlight which kinds of guests are most likely to choose certain kinds of rooms and services, and then cross-reference those decisions with their other purchasing choices.

The same analysis can indicate which service offerings aren’t delivering, with related information to indicate whether the offerings can be revived through a few tweaks or dropped altogether.

Personal preferences can provide powerful research insights and marketing opportunities, as well. Something as seemingly small as the type and number of pillows a particular guest prefers – and likes to see on their bed the next time they book a room – can be cross-referenced to their overall booking and ordering behaviors.

In combination with lengths of stay, free/premium on-site services used, and external activities requested (attractions, concerts, shopping, and so forth), this data can give hotel operators tangible, useful data on what appeals to the various groups they cater to, and also yields strategies for how to serve them better and more often.

Loyalty pays off for everyone

Thanks to the growing popularity of loyalty programs and their influence on program members, hoteliers are seeing an increase in direct bookings over third-party bookings in recent years, according to the article “Demystifying the Digital Marketplace” in the March 2017 issue of Today’s Hotelier.

Hotel apps are playing a big role in driving this direct-booking increase. This is why apps are now being offered by most major U.S. hotel chains.

It is worth noting that apps can boost bookings whether the guest is signed up with a budget hotel loyalty program, or with a five-star chain that puts luxury first at a premium price.

“The person who books $59-per-night rooms has different priorities and tastes than someone willing to pay $279 per night,” says Estis Green. “What they have in common is a desire to be treated as if they matter; that their personal choices are worthy of being remembered and catered to by the hotels that they choose. Apps deliver this level of service.”

As far as hoteliers are concerned, loyalty programs in general are worth the investment. This is true whether a hotelier analyzes their loyalty program database for marketing intelligence, or runs the program simply to make guests feel appreciated and valued. After all, happy guests are repeat customers who tell family and friends which hotels make them so happy.

The bottom line: The growing popularity of loyalty programs and the ability to tap the loyalty program benefits through apps is good news for the hotel industry, and the people who rent its rooms. This is a true win-win for both sides of the deal.

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