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Loyalty Reimagined

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October 23, 2022
Shayne Paddock

Two years ago, many of the loyalty customers I worked with put their loyalty programs on pause, and for good reason. They didn't stop their programs altogether – they weren't going to downgrade guests or expire points for those who had made a certain tier status. They wanted to be fair to guests who were loyal to them in 2019, knowing that they couldn't possibly stay at the same levels in the year to come.

Fast forward two years and those same hotels are now turning their programs back on. The question is, should they go back to the same model they had before? Should they still have five tiers with a top tier maxing out at 100 nights per year? Is that realistic?

For some hotels it very well might be, and that’s great. But for many groups, now is the time to reimagine these programs and adjust them accordingly. Set them up to help achieve the realistic business outcomes you’re striving for. And remember that these days, guests want instant gratification. They aren’t willing to wait months or years before they can take advantage of their loyalty points or status.


Many guests are now loyal to places that give them a seamless experiences and reduce the overall friction of travel. With all the flight disruptions in the news lately, it isn’t as appetizing to book a business trip. There's zero friction to staying home and doing a Zoom call compared to flying in person these days.

In a lot of ways, staying home is a hotel’s chief competition now. Your challenge is to think of ways to get the guest looking forward to the trip and how you can make it a memorable experience worth repeating. Services like mobile check-in, keyless entry and mobile checkout are becoming mainstream. They not only remove friction points for the traveler, they also help with staffing shortages that most hotels are currently facing. Plus, they can be huge drivers to loyalty program signup, since they’re often only available in the loyalty app.


Loyalty programs have historically focused on the business traveler, but with corporate travel still below 50% of pre-pandemic spend, hoteliers might need to rethink their programs with a focus on leisure as well. How can you use your programs to attract that leisure traveler to stay with you year over year, or maybe a second or third time within the same year? A leisure traveler who behaves in this manner is incredibly valuable, but are you treating them any differently than a guest who’s staying for the first time?

When setting up loyalty tiers think about making that second tier achievable with as few as one or two stays. Encourage restaurant and spa visits by rewarding guests for their total spend, not just room nights. Consider off-property rewards such as Starbucks or Uber vouchers, especially for direct bookings. That allows guests to use their rewards regardless of where they are.

The psychology of loyalty status has always been about feeling special – like you’ll receive a better experience than the average guest. How do you ensure that special feeling throughout every aspect of the guest journey? You do so by offering personalized experiences at every touch point of the trip.
ON THE WEBSITE: When a loyalty member arrives on your website do they see the same content as everyone else or do they get exclusive offers and content tailored just to them? Even just a simple message like “It’s good to see you again” can make the guest feel valuable and appreciated.

Often a leisure traveler will come to your site undecided about the location of their next trip. Using data from their earlier stays, you can recommend certain destinations over others. If their last vacation was a ski trip to Colorado, highlighting your property in Whistler will likely result in a higher conversion rate than just listing all your properties alphabetically.

DURING THE BOOKING PROCESS: Back in 2017, hotels started to introduce the concept of member rates. The idea was to offer a better rate to folks who signed up for the loyalty program and booked direct. These programs were hugely successful in driving loyalty signup, occupancy and repeat business. But now, with so many hotels implementing them, how can you differentiate yourself once again? What if, in addition to preferential pricing on rooms, you were to offer that same preferential pricing on amenities tailored to the guest based on their preferences.

Instead of a myriad of welcome amenities for loyalty members, why not let them choose their own personalized welcome gift? This prevents you from spending money on things the guest won’t enjoy and gives them what they really want. Options could range from extra points to breakfast or even a bottle of wine. Atlanta’s EV Hotel recently made headlines for offering NFT’s as loyalty rewards. While this won’t appeal to all patrons, it’s a good example of allowing guests to choose the types of rewards they value.

Are you making it easy for guests who’ve already stayed several times with you to select the same room type they always choose, or do they have to hunt for it every time? Highlighting their favorite room makes them feel recognized. It also makes the booking process faster.

AS PART OF PRE-ARRIVAL: Is your pre-arrival room upgrade offer to loyalty members the same one you’re giving to everybody else? Or is it tailored just for them? If you run a points-based program, can guests redeem the upgrade offer for cash instead?
Are the activities you offer in your pre-arrival letter just a set of static offerings that don’t reflect their guests’ preferences or past spending habits? There’s an opportunity for higher conversion if you send a personalized list.

WHILE THEY’RE ON PROPERTY: Many hotels do an excellent job of personalization above-property, but lose all the earlier context for the journey when guests arrive because their systems aren’t connected.
Some guests still prefer to stop by the front desk. Make sure your staff can address them by name, recognize their brand loyalty and offer them the same upgrade or activity they were offered in their pre-stay.

If you know a guest’s past food and beverage preferences, wow them by offering a list of room service meals curated just for them. These could be options available in your own kitchen or, for those hotels without food and beverage services, the meals could be available for delivery from nearby restaurants.


To create these types of personalized experiences, start by capturing as much permission-based guest data as you can and choose suppliers that use modern techniques like artificial intelligence (AI) and machine learning.

You don’t need a data scientist on staff to do this – these techniques are becoming more common in the marketplace and may be built into the products you already own. Don’t feel you have to do it all at once, either. Start small and build on it. Once you’ve made personalization part of your hotel culture, doing it will get easier.

Loyalty isn’t just about points and redemptions. At its heart, it’s about turning your guests into raving fans who want to come back – repeatedly. If you had a hotel experience like I’ve described, wouldn’t you keep going back over and over?


SHAYNE PADDOCK is a loyalty and personalization expert who's currently serving as an independent strategic advisor after having held such roles as VP Portfolio Strategy for Amadeus, VP GMS Product Development & Innovation with TravelClick and CIO at ZDirect.

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