Building a Loyalty Program That Resonates with Modern Travelers
Is your loyalty program in need of a refresh? It might be time to rethink traditional points-based systems, which no longer excite today’s travelers. With 79% of Gen Z and Millennial travelers prioritizing experiences over cost, hotel brands must elevate their loyalty offerings to meet these expectations.
Loyalty programs are crucial for cultivating repeat business, which comes with lower acquisition costs, higher direct bookings, and the potential for enthusiastic brand advocates. This translates into increased revenue and NOI. More importantly, a well-crafted loyalty program strengthens guest relationships, offering another opportunity to surprise and delight.
While points were once the industry norm, they no longer captivate guests. To maintain the business benefits of a loyal customer base, hoteliers must evolve their programs in line with changing guest preferences. With digital transformation advancing rapidly and AI reshaping the travel booking journey, keeping up with guest needs is more important than ever.
The key to winning and retaining guests in today’s market is personalization. Your loyalty program should leverage guest data—like spending patterns, stay history, and preferences—to create tailored experiences that resonate. A Customer Data Platform (CDP) is currently the only technology capable of collecting and activating this valuable data, enabling you to craft personalized rewards that truly engage your guests.
So, where should you begin? Here are four tips to create a loyalty program your guests will love:
Know Your Guests Understanding your guests is the foundation of personalization. Research your repeat customers: Are they business travelers or families on vacation? What channels do they use to book, and how frequently? Use guest profiles to identify your most profitable segments. For example, analyze folio and restaurant data to pinpoint those who would appreciate F&B offers.
Your guest segments form the core of your loyalty program. Instead of manually piecing together data, use a CDP’s identity resolution feature to merge information from various sources into a unified profile. This process, powered by AI and machine learning, ensures accurate guest insights, allowing you to tailor rewards to their preferences. Not every guest wants a couples massage, but some might be eager for a dining discount, like the 25% off restaurant offer that Royal Garden Hotel targeted to guests with upcoming stays.
Move Beyond Points – Focus on Experiences If you’re considering a points-based structure, think again. Points might have once gamified loyalty, but they lack the personalization needed today. Experience-based rewards, on the other hand, allow you to apply guest data creatively. Would your guests prefer slowly accumulating points, or would they rather enjoy a rooftop yoga session followed by a spa treatment? The choice is clear.
Use data from various touchpoints—like spa visits, restaurant orders, and overall room spend—to craft experience-based rewards that add real value. Personalization transforms ordinary loyalty perks into memorable experiences.
Stay on Top of Trends Guest preferences evolve, and so do travel trends. In 2024, guests are looking for everything from quiet retreats to ultra-luxury experiences. Trends in food, music, and culture also influence their choices, so your loyalty program must be adaptable.
Conduct market research and analyze data from your campaigns to stay informed. Did your email about new pickleball courts receive a high open rate? Or did a promotion for sustainable dining options get significant clicks? These insights will guide you in crafting rewards that align with current trends.
Measure and Adapt To ensure your loyalty program’s success, regularly assess its performance. Set KPIs like acquisition and retention rates, and track which rewards are most popular. This data will help you refine your program to better meet guest needs.
Nearly half of business travelers and 30% of leisure travelers prioritize loyalty benefits when choosing a hotel, so make sure your program delivers on its promise. Loyalty programs should be dynamic, evolving to stay relevant and avoid becoming outdated.
Make Your Loyalty Program as Unique as Your Guests Congratulations—you’ve built a strong database of loyal guests. But each guest is unique, with their own preferences and travel goals. Creating a loyalty program that reflects this diversity is the next challenge. With the help of a Customer Data Platform, you can use data-driven insights to offer rewards that go beyond points and speak directly to your guests' desires. That’s a win-win for both you and your guests.
