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Hotel Guest Loyalty

How to Best Measure Hotel Guest Loyalty

For the past several years, the term ‘loyalty’ has risen to become a major industry buzzword in the hotel arena. As a result, many hoteliers have launched customized loyalty programs, and implemented new innovations to attract and retain guests.

This is especially timely because the competition from OTAs, other hotel brands and AirBNB has become increasingly more intensified. With this in mind, it begs the question: are hotel guests truly loyal and how do we measure it?

According to a recent McKinsey podcast about the ‘consumer decision journey,’ only three categories out of 30 are loyalty driven. While this may not be good news for hoteliers, the data provides an opportunity for hotel brands to develop the right programs to create loyalty.

The best way to do this is to ask the right questions to your guests. Many large brands rely on Net Promoter Scores (NPS) to gauge loyalty, which at first glance seems like a viable program to implement. However, NPS scores rely on asking “how likely would a guest recommend a hotel to a friend or family member.”

Although this seems like a powerful point of data, loyalty is much deeper that just recommending a product or a service. Instead, hoteliers should ask these two questions:

  1. What one thing delighted you about your stay at our property?
  2. Is there anything about your stay that could have been improved?

These two questions tackle both the positives and the negatives of a stay. This two-sides-of-the-coin approach will allow a hotelier to learn about what is working well, and what needs to be improved. From there, they can make the organizational changes required to address these issues, and enhance upon what is already working well.

The McKinsey podcast may offer sobering news for hotel brands about the state of consumer loyalty but by asking the right questions, tailoring day-to-day operations, and developing loyalty programs accordingly, it is possible to crack the code for delighting all guests in ways that they will always want to return.

 

Hotel Loyalty Programs and Brand Ambassadors

While there have been many hotel industry articles about how to turn guests into “brand ambassadors,” large hospitality providers may want to consider ways to ensure that all staff also play this vital role.

In other words, to transform guests into loyal advocates, the foundation needs to be in place – with every staff member on a property at the hotel first. One way to achieve this is by making loyalty programs truly about loyalty.

As we highlighted before, the core focus in the hospitality arena should be about fostering relationships with guests. Hotel guests want to have an emotional connection with their preferred hotel brands.

This concept is critical for developing high-level strategies for building loyalty. And this goes beyond what many highlight about the value of education and hotel loyalty programs. A guest should have an experience that feels completely personalized, which can increase chances that they will sign up and take advantage of the actual loyalty programs.

In a recent Marketplace interview, Arne Sorenson, CEO of Marriott International, discussed the importance of providing guest experiences. “We’re delivering experiences which people can count on and where they want to come back to us and have those experiences,” said Sorenson. This includes catering to guests’ needs both on- and off-property.

By focusing on providing these experiences, as well as pushing for all staff members to be brand ambassadors, it is possible to achieve the highest level of loyalty – where the guests themselves actively advocate on behalf of your brand.

 

Cornell Study: Top Hotel Amenity is Free Bottled Water (is it that simple)?

For many hoteliers, providing unique amenities can help drive differentiation and long-term guest loyalty. While many luxury brands tend to focus on things like private cycling guides, VIP shopping assistants, even a “soap concierge,” the simplest of amenities can sometimes stand out.

For example, a recent Cornell University study found that offering free bottled water translated into a the highest ROI for returning guests, when compared to Internet access and fitness club use. One of the interesting aspects of this report is it focused more on upscale and luxury brands.

While this study is limited to just high-end brands, it speaks volumes about what guests actually want, and provides insights into the drivers that motivate guests to return. In addition, the many publications that covered this study were more interested in one key data point: that hotel gyms actually don’t get much usage.

From a larger perspective, this report reinforces how illuminating it can be when we actually mine hotel guest data. We often make assumptions about guest preferences, which can only be truly validated by the data itself.

Based on this study, we imagine that many hotel brands are now focusing on providing more free water in guest rooms, which is a sound data point. However, the real motivator should be “how can we glean these types of insights on guest preferences”? On top of this, if hoteliers are mining guest data, are they using this knowledge to quickly develop the right amenities that truly resonate?

Of course, providing bottled water is important, but this is only the tip of the iceberg. When taking a deep and analytical look at guest data, hoteliers may find something surprising. This new-found knowledge could then ultimately be used to develop amenities and offerings that are truly wanted.

 

The Road to Guest Satisfaction and Loyalty Lies in Data … But There is a Catch

In every industry, there is a push to best leverage customer data in ways that help best influence buying behavior. In the hospitality arena, many larger brands are now collecting data at every point in the guest stay cycle – with the desire to enhance bookings based on travelers’ past purchasing habits.

The reality is that it is very easy to collect data from every touch point in the stay cycle. However, hoteliers should consider creating goals before starting off on developing a large data repository of guest behaviors.

The reason? Collecting and storing data costs practically nothing, and requires a minimal lift for hotel brands. The catch is making sense of the data, which starts with creating the right foundation.

Here are some tips for creating the backbone that best leverages guest data:

  • Make sure everyone involved in gathering or providing the data knows how it will ultimately be used.
  • Align the data gathering effort to tangible business goals.
  • Generate a list of questions that you want the data to answer. The better the questions – from both qualitative and quantitative perspectives – the better outcomes.
  • Keep the overall effort very simple, and avoid complexities that will run up costs.
  • Continually iterate efforts to achieve better results faster.
  • Design your collection methods to be painless for the guest, and only use a form when absolutely necessary.
  • Always be willing to give the guest something and think about what’s in it them. Avoid gifts that have social consequences such as free drinks at the bar.

The most opportune way to gain guest long-term loyalty is to build a data foundation that can be used in the future. Once this ground work is in place, the next phase is developing strategies for generating meaningful and actionable results, which we will be covering in future blog posts.