Loyalty programmes within the hotel industry

The year so far

The first half of 2017 has been very good for the hotel industry, thanks to the increase in overseas investment. An estimated £2 billion worth of property sales has come from overseas investors, with a prediction of more than £5 billion by the end of the year.

A favourable exchange rate is the most like motivation for these overseas investors, who account for over £1 billion of transactions. Approximately £800 million have bee domestic investments.

How can hoteliers take advantage of the hot market, and encourage customer loyalty?

Loyalty Programmes

‘Hotel Loyalty Programmes’ have caused a debate in the industry, especially on how to create better programmes in an effort to maximise the derived potential return.

There are many financial and non-financial benefits to a loyalty program such as:

  • eliminating price-based competition between competitors
  • developing direct relationships to help retain customers
  • creating brand advocates

Loyalty programmes strengthen ties with guests by reinforcing brand recognition and rewards clients for their loyalty. These programmes can develop highly tailored profiles for their customers based on their exhibited habits during their stay, their transaction data and even the input provided by the customers themselves.

One way to market these loyalty programmes is to highlight the improved and customised service they allow hoteliers to provide to consumers. Another draw are the rewards customers can receive from their memberships.

As long as these loyalty programmes are seen as relevant and reliable for consumers, the more guests are willing to sign up for them. These loyalty programmes also need to have clear instructions on how consumers can redeem the rewards from these programmes.  Difficulty in redeeming rewards puts consumers off. This can mean bad PR for hoteliers, as negative reviews tend to spread faster than good ones.

If you have any questions or would like to discuss the needs of your hotel business, please get in touch with our Tourism & Hospitality team on 01903 234094.

A version of this blog originally appeared on the website of one of our MHA association member firms, MHA MacIntyre Hudson.