Customer Loyalty in Hospitality

A Complete Guide to Customer Loyalty in Hospitality

By: Frank DePino | May 22, 2024

Attempting to create customer loyalty in hospitality with so many other brands and businesses competing for those same customers can be difficult, especially when you consider the number of elements that go into building a loyal customer base. 

Customer loyalty in the hospitality industry is a very complex topic composed of several unique factors, each of which can be utilized in different ways to turn your visitors into loyal, returning customers. Some of the most important customer loyalty factors include guest benefits, value discounts, and enhanced customer experience.

If you want to learn more about how you can increase your hotel guest retention and increase profits, continue reading as we answer your questions about hotel customer loyalty. 

Customer Satisfaction and Loyalty in the Hotel Industry

Customer loyalty in the hotel industry is when a customer provides repeat business to a specific hotel location or chain. In other words, a loyal or satisfied customer will choose a single location or company over alternative options. 

This can even be the case when a hotel has stricter policies or higher prices, as more often than not, customers are willing to spend a bit more to receive familiar quality or assurance of their expectations.

Customer loyalty is the result of a hotel providing superior service. Guests will return if they know their needs will be met at that particular hotel, and promote your hotel through social media or word-of-mouth to create more potentially loyal guests.

The hotel owner is running different loyalty programs for his customers

Types of Loyalty Programs in the Hotel Industry

Points Programs

Points programs have been around for hundreds of years, long before the idea of digital currency had ever laid its roots. With a points program, a customer will spend money upfront to reap rewards in the future. 

Essentially, they make a transaction first and benefit from that transaction down the line. 

Points programs can be great for getting tons of guests to sign up, though when it comes to increasing engagement, the value and differentiation factors are daily low. These work best when they are paired with loyalty tiers.

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Tiered Loyalty Programs

Tiered loyalty programs are very popular in the hotel industry, as they are based on giving rewards based on specific milestones that guests cross. These kinds of milestones are often measured in dollar values. 

Essentially, the more a guest spends at a hotel, the higher the tier they enter. 

Tiered loyalty programs are wonderful for increasing your member engagement; they make guests feel as if they’ve entered a more exclusive program. When it comes to traditional points programs, which are non-tiered, all guests or customers get the same thing. With tiered loyalty programs, it becomes a thing of status

The higher the tier, the better the benefits. The element of gamification comes into play, incorporating addictive elements that keep people coming back. These kinds of elements can make a program far more exciting for people to traverse. 

Some of the most successful tiered loyalty programs out there will give customers insight into how many people are in each tier, which is usually based on a percentage. That customer can then see how their status ranks compared to other customers in the program, bringing their competitive nature into play. 

Plus, being in a higher tier with more benefits makes the customer feel more valuable. 

IHG and Marriott have some of the best-tiered loyalty programs in the hospitality industry.

Premium Loyalty Programs

Premium loyalty programs are great for higher-end hospitality establishments that are looking to increase customer retention. These kinds of programs are fee-based, meaning they require members to make upfront payments in order to reap instant benefits. 

The moment a guest enters a premium loyalty program, they receive instant gratification in getting to engage with the culture and benefits of the program at any time they choose. 

These programs can be very valuable, though it’s important to make sure that you don’t create too large of a barrier for your demographic. Of course, the idea is that the barrier should be a bit larger than what the average customer could commit to, as that is the point. With a program like this in place, you can strengthen your relationship with your best customers and keep them coming back for more.

To learn more, read our guide on how to improve hotel marketing and increase bookings.

A hotel customer is enjoying the benefits of the hotel's premium program

Examples of Guest Benefits in Loyalty Rewards Programs In Hotels

Wyndham Rewards Program

One of our favorite rewards programs comes from Wyndham. When you’re a member of Wyndham Rewards, you can earn rewards and cash in at one of the many 9,000+ properties that this brand runs. 

Guests can redeem their points for a wide range of things, such as hotel stays, car rentals, retail items, and much more. 

Wyndham even optimized guests’ point-earning opportunities by partnering with other large companies, such as American Airlines, Amtrack, and United Airlines. 

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World of Hyatt

World of Hyatt is Hyatt’s top-notch loyalty program, which provides benefits to members who stay in one of their many 700+ properties throughout North America, Asia, Europe, and beyond. 

Guests who are involved in the World of Hyatt program can use points they earn for free nights, stay experiences, and room upgrades. Hyatt has also allowed for these points to be transformed into car rentals and airline miles. 

Recently, Hyatt partnered with Visa to offer a credit card for members who want to earn points with every purchase they make. 

Guest Benefits in Loyalty Rewards Programs In Hotels

Marriott Bonvoy

One of the most effective hotel loyalty programs in the industry today is the Marriott Bonvoy program. When guests sign up for this program, they can get points for staying within Marriott’s network of hotels.

Beyond standard Marriott hotels, the company has 30+ affiliate brands attached to this program. They include The Ritz-Carlton Hotels and Resorts, Westin Hotels and Resorts, and St. Regis Hotels and Resorts. 

Members who are a part of this program receive unique and exclusive benefits, including mobile keys, special member rates, food and beverages, and free hotel room internet. By using specific Chase Visa or American Express Cards, members can even score extra Marriott reward points. 

At this point, you may want to know how to create an unforgettable brand for your hotel.

4 Tips To Increase Customer Loyalty In Hospitality

#1 Offer Valuable Rewards

Your hotel guests want to join loyalty programs that offer interesting rewards. It’s up to you to take any opportunity to gather your guests’ information. In this way, you can better gauge their preferences and determine what kinds of rewards would suit them best. 

We often find that it’s best to offer a diverse mix of rewards, such as:

  • Bonus credit card points.
  • Discounts on stays.
  • Free amenities or services (such as a free spa treatment).
  • Free continental breakfast or room service.
Customers of the hotel just got the benefits of VIP tiers

#2 Create VIP Tiers

The idea of climbing through different membership tiers of a hospitality loyalty program to get to the top is a key part of many loyalty programs. As your customers reach new tiers, you can increase their available benefits while enjoying their continued business. 

Determine how you want to tier out your loyalty program or membership tiers and assign perks to the different tiers that make the most sense for your business. Ensure it is clear to your members what they must do to move from one tier to the next or earn new rewards. 

#3 Utilize Loyalty Program Software

You might not have a large team with the bandwidth to manage a complex loyalty program. Luckily, there are plenty of hospitality loyalty program software options you can use to keep things organized.

This kind of software makes it much easier for independent hoteliers to reward loyal guests. It usually provides a dedicated app that guests can use to track and use the rewards they’ve earned. 

#4 Create Corporate Rewards

We suggest differentiating rewards for people who are traveling for leisure and those who are traveling for business. You might consider implementing perks that encourage big-scale corporate stays to return business travelers. 

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The 3 R’s of Customer Loyalty

  • Reward – A tangible “thank you” that a business provides customers for their business.
  • Recognition – Showing your loyal customer you recognize their value by providing certain gestures, such as complimentary upgrades.
  • Relevance – Not always making loyalty about discounts or deals, but instead about experiences that help your loyal guests connect with your brand better.

Final Thoughts

Customer loyalty in hospitality doesn’t have to feel overwhelming to implement. However, it’s important that you start your business off on the right path to retain customer loyalty by picking the right programs and determining ways in which you can provide your guests with the best value. 
Here at MediaBoom, we’re all about helping brands find success when it comes to customer loyalty. Get in contact with us today to see how hiring a hotel marketing agency can take your brand to the next level.

By: Frank DePino

Frank DePino is Principal and Founder of Mediaboom. Since 2002, Frank has led Mediaboom’s award-winning staff of creative and technical professionals, building the most effective marketing and advertising solutions for its clients.

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