Guest loyalty: Fine-tuning your hospitality retention strategy

Last updated
May 19, 2024
Traveling can be intimately personal, stressful, aspirational, and relaxing. How do you keep your guests coming back and encourage word of mouth? Here are tips from the experts.

If my experience working in the hospitality industry has taught me anything, it's that I could never do it again. Good luck, people!

Just kidding.

The art of taking care of guests for a meal or an overnight dates back to as long as people have traveled. Which is forever.

Yes you can encounter some jerks that make you want to quit everything and start a podcast about it.

But you can also experience some of the most wonderful things.

Summers full of weddings. Reunions. The joy of dancing and live music. World travel. And of course, the view.

2024 travel trends

Everyone's on a budget but we all still want to find ourselves 🧘♀ and that might mean tacking on 3 days alone by the beach onto the end of a work trip or a wedding 😏 🌴 💅

Travel growth is expected to slow this year, down from prior surges of "revenge travel" years and impacted by the economy in 2024. Yet a Jeffries Global Resarch survey of 500 people found that people have a few more trips planned this year than last year, which maekes budgeting more important than ever.

Reuters reported that Marriott's CEO Anythony Capuano told investors that "The rebound impact from the pandemic has waned."

Booking.com's 2024 traveler survey of 27,000 travelers found that 62% said the increased cost of living will play a limiting factor to travel in 2024.

Turns out that the hot cookie doesn't work to generate more loyalty – in fact, it might even create disloyalty, a much more dangerous issue. So what does?

Why is it so different from commerce or services?

Hospitality loyalty – from food service to accommodation – is an art, a science, and an exercise in passion for the details. The stakes are much higher when it comes to the customer experience and here's why: 

  1. It's already attached to an emotionally charged event. Traveling itself is an emotionally charged event. It's stressful to navigate planes, trains, and automobiles when you're also carrying a pressed suit or re-writing vows or polishing that pitch. The fact that the entire meal, stay, or weekend will also be attached to that emotional event, whether its a conference or a wedding, means that your guest is going to remember a LOT. The good, the bad, and especially the ugly.
  2. It's longer. A nice meal is 90 minutes if you do it right, an overnight is 24 hours. It takes maybe 30 minutes to buy a pair of jeans online when you know your size and style, and you likely won't have to talk to anyone. There's just more opportunity within a window of 1 to 7 days for interactions that can leave the customer feeling good or bad about their experience.
  3. It's more interactive. The person is in your house, so to speak. They will have many face to face conversations, they might even need to resolve an issue, and then there's the heightened energy of the event. There's just more opportunity for interactions to go right or wrong.
  4. It's a big purchase that comes with expectations. There's planning, anticipation, and money involved. Naturally, this comes with expectations of the guest – they want to live the experience they have imagined in their mind.
  5. It's an industry in flux. People want to try new hotspots, travel to new locations, fill their instagram feeds like they do their passports with stamps. This means they might not be ready for a repeat experience, but: 
  6. Word of mouth is as impactful as online reviews. To attract new customers, you need the strong word of mouth and online reviews of your previous customers. So while your previous guests may not become return guests soon, they very well could in the future, and along the way they will tell up to 3-10 people about their experience.
Hospitality loyalty is dependent on making a positive memory with the place. This image shows a pool in a desert hotel with two oranges, a bottle of wine and a sunhat on a table in between two lounge chairs. Empty, idyllic blue pool in the background.

Knowing how high the stakes are, these are the places to focus your efforts in 2024 if you want to start improving guest loyalty: 

#1: Nail the first and last impression

I remember walking in to the lobby to check into one of the fanciest hotels in downtown San Francisco – a splurge my partner and I were excited for – just as a tour bus pulled up and 75 people swirled around us and into the check-in line.

It took over an hour to get through the line and check in. Definitely just a "poor timing" issue, but instead of trying to expedite, lobby employees just stood and watched as the line slowly snaked around to the 3 stretched customer service desk reps. I don't remember what the room even looked like because all I can remember is the way my back hurt sitting on my luggage for an hour.

Train your team to pick up on what customers need, without them having to ask. Reward proactivity in your team culture and you'll have the benefit of empowering people to continue to be proactive problem solvers.

It's relieving to walk into a spotless and comfy room as a guest. But if they're frustrated in the lobby, they won't feel it.

Three examples we love that you can do on a budget: 

  • Create welcoming amenities: Provide a small welcome package that includes local snacks, a map with nearby attractions highlighted, and a QR code to a hotel member perks page for local deals.
  • Offer personalized greetings and tailored information: Train your front desk staff to greet guests by name and provide personalized information about local events or attractions during their stay. 
  • Everyone is a greeter: It's a little weird to see someone in the lobby but they're unable or look unwilling to help. Anyone can say, "welcome! the front desk agent will be right back." This is the same in restaurants - if the host is not back at the hosting station to bid a diner goodbye, you'll likely hear it from a passing server or bartender.

These thoughtful touches make guests feel valued and excited right from the start.

#2: Personalize everything you can

Everyone wants to feel special, and you can take advantage of that by personalizing whatever you can. Get to know what makes each guest feel important to boost their comfort and make them feel like a regular.

Here’s how you can get personal:

  • Anticipate your guests. Be able to greet them by name after you look up their confirmation number. We love the way hotels now have "Welcome, Adrienne" on the TV when I walk in. It's also easy to remember my wifi when I'm a member or it's always a convention like "last name + room number". Dietary preferences? Store them. Allergies? Store those too. Don't forget the pets – "Will you be bringing Fluffernutter this trip, Ms Kmetz?"
  • CRM Magic: Use CRM software to keep track of guest preferences and past behavior, so you can tailor recommendations and be one step ahead for their next visit. This is especially true of luxury stays, or places where guests love to order room service.

    I've gotten champagne before from a Kimpton manager on my anniversary, and I remember it so much because it was sweet and they remembered. The next time I stayed at a Kimpton they asked if I wanted my favorite pancakes the next morning for room service. Now that's personalization.
  • Respectfully chitchat: For the guests that welcome a little banter, start conversations that get to know them, check in to make sure they’re comfy during their stay, and jump on any requests fast to give them a stay that feels responsive. There’s a line between being noisy and being a good service provider, so keep an eye on that.

#3: Traditional loyalty programs are not the answer

Remember when travel companies had those point programs that could get you free trips if you kept flying or staying with them? Big players like United and American Airlines have raked in loads selling these points.

But here’s the twist: when the travel world hit pause during COVID, keeping your VIP status got easier. Once everything started rolling again, though, the rules changed, and now you need more points to get the freebies. Stuck with a ton of miles on one airline? Switching isn’t so simple.

Here's a summary of the shift in the way loyalty programs work: 

Loyalty in travel programs. Chartshowing how the original purpose of loyalty programs have shifted from loyalty to revenue

If you're thinking you need a points program for your customer loyalty, think again. Most customers report that points are too hard to earn and redeem. What if you eliminated points altogether, and simply gave everyone a reward for doing the action? IE. Members who sign up get traveler perks, and every time a member completes a valuable action, they get a perk.

If these programs don’t make folks feel like VIPs and instead just "leads", people might just give up on point collecting. Travel companies are now brainstorming ways to jazz up these programs and here is where tip #4 arrives.

#4: Give some perks to your regulars - at any time, sans points

There are plenty of examples of successful loyalty programs without points.

The best part about a hospitality perks program is that you eliminate the friction of a complicated points program – 100% of your customers are in your loyalty program when you use perks to reward travelers or members at any time. More perks = more value. 

Our studies at Paylode show that places implementing perks programs pull in significantly higher booking and occupancy rates than those that don’t implement them. Our studies highlighted a 7% jump in member logins in the first couple of months after starting off the perks programs.

Always throw a thank you to those comeback customers by recognizing their loyalty. And perks is one of the best ways to do it.

So, what makes a hotel loyalty program effective?

The little things. The first impression, the last impression, and resolving issues early and fast.

Keep it simple; no one likes a headache from confusing rules. And make sure the rewards actually fit what your travelers want, like choosing a late checkout or picking how they want to use their points.

Building solid customer loyalty in hotels makes business sense and if you’re reading this, you know it. By making your guests feel unique and special, and understanding what they love, thanking them for returning, and throwing in some nice perks, you'll get the return business when they're ready, and the positive word-of-mouth in the meantime.

Ready to build a traveler perks program? Let's talk.

References: Rioux, P. (2020). The Value Of Investing In Loyal Customers

About the author
Adrienne Kmetz
Adrienne is a marketing expert with a career history of working in startups of all sizes, from early stage to series A. She has 17+ years of experience writing about business, finance, and entrepreneurship. She went to Colorado College where she majored in skiing.
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