Do Loyalty Programs Work for Boutique Hotels?
A loyalty program for hotels usually are run by big hotel chains. A hotel loyalty program is a key approach to attract and maintain business at its properties. These days, loyalty programs are becoming an increasingly important factor when guests are selecting a hotel. Hotel loyalty program works pretty much in the same way as frequent flyer mile rewards in the airline industry. Guests receive free awards when they make repeated stays in the hotel. It is to appeal the business travelers or frequent hotel guests to revisit the brand or group of hotels.
Market Matrix studied found out that loyalty program ranked 4th in the top deciding factors that help guests decide to book a stay at those hotels. According to Second Opinion Marketing research, it claimed that one of the best ways to boost hotel repeat customers is to establish guest loyalty program. Big hotel chain like Hilton have a huge loyalty program with many offerings. The following are in IHG Reward club: InterContinental® Hotels & Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, Holiday Inn® hotels, EVEN® Hotels, HUALUXE® Hotels & Resorts, Holiday Inn Express® hotels, Holiday Inn Club Vacations®, Holiday Inn Resort®, avidTM hotels. Another example is GHA Discovery. The Global Hotel Alliance loyalty program comprises of 30 different independent luxury hotel brands across more than 500 properties in 75 countries. There are three different status levels —Gold, Platinum and Black. Black status provides complimentary items such as newspapers and bottled water, welcome gifts, guaranteed room availability, and one of the best parts of the program's perks, Local Experiences. Local experiences are the experience that connect guests to a specific destination. It could be riding elephant in Chiang Mai in Thailand or experiencing Northern Lights in Iceland through the loyalty program.
According to Forbes 2019, boutique hotels are starting to align with big chain hotel in the loyalty program. One of the examples is Kimpton Hotels. They are joint venture with larger award programs, giving guest the benefits of a broader loyalty program, while maintaining a unique design led hotel experience. Kimpton merged its existing rewards program with IHG Rewards in 2018.
Some of the boutique hotel loyalty program to members including 10 percent off room rates, earlier check-in and late check-out, complimentary Wi-Fi, complimentary breakfast, room upgrades, special birthday card and gift, free spa treatment, event tickets and reward night vouchers etc. The perks and benefits of this will be higher when guests stay and spend more in the hotel. For instance, the event tickets can be claimed when guests stay at the selected five luxury star or spend $5,000 in a year. "Loyalty programs can and do deliver positive results in terms of revenue, stay frequency, and guests spending." Said The Centre for Hospitality Research 2016.
In my opinion, loyalty programs is not only useful for repeating guests but also useful in term of big data. Loyalty programs provide hotels with insightful information on their guests. They will know who their guests are, what they like, and where they are from. Further, it will show what the guests do during the stays such as what facilities they use, what cocktail or food they order, the style of hotel they are staying, etc. Also, one might book hotel often with family, therefore the promotion or special offers given to those guests should be different compared to business/corporate guests. This allows the hotel to understand the guests more in order to push sales and make additional revenues by tailor making the experience.
In conclusion, hotels can use all this valuable information to create marketing campaigns for various different type of guests. Loyalty programs is very useful in both repeated guests and big data.
Korosh Farazad
Founder and Chairman of Farazad Group of Companies
Farazad Group Ltd.
