Retaining customer loyalty in hospitality

Customer loyalty can be the difference between survival and floundering in these times of continued uncertainty. 

In the hospitality industry, which is still reeling after the Pandemic, consumers have become less tied to long-held loyalties. Cornell University’s School of Hotel Administration published a report last year in which it stated that consumers’ connection to their preferred brand had “frayed” during the downturn in travel. 

It quoted a 2021 survey from Accenture, which stated that 45% of consumers are “considering shifting some or all of their spending away from current travel providers”. This is a time of tightening belts and so customers are looking for the best deals for the smaller pots they have to spend. 

Cornell’s researchers also, however, offered hope by revealing that hotel loyalty programs can account for a 57% increase in room revenue. Loyalty can be not only retained but grown if the offering for customers is apt and enticing. 

The power of data

To deliver this, companies must collect critical data on their customers. This can be gathered from all of your interactions whether online, offline or on mobile platforms. 

Understanding customers’ needs, preferences, habits and dislikes; alongside how they like to interact with your business are absolutely key as they offer an insight into your customer’s mind. This allows you to build a loyalty offering that not only makes your customer feel listened to and catered for; but delivers ease by fitting with how they want to live their life. A study from Motista revealed that companies under-leverage the emotional connection that they could deploy with customers. It found that customers with an emotional connection to brands have 306% higher lifetime value

The personal element is essential here. In its Global Customer Loyalty Report for 2023, Antavo found that the average annual spend of members who redeem personalised offers is almost five times higher than those who have never taken advantage of such offers. 

Make it personal

Personalisation can include birthday offers or introduce some gamification with challenge badges that reward actions directly. Gamification can also be deployed using tiered loyalty systems so that there is always something for customers to aspire to achieving. Antavo’s research has revealed that a three-tier system is a great way to start but it is the programs with larger numbers of tiers that keep customers longer. 

It is important that loyalty offerings are diverse because what your customers want will be also. The ways that they can interact with your business should also reflect this diversity. As such, it makes sense to be present on an array of relevant social media platforms to ensure reaching as many customers as possible. Social media is, after all, a great tool for quickly engaging many customers at once. Companies can also incentivise existing customers to share and tag posts to help them extend their reach. 

Make it matter 

Antavo’s research revealed that whether a company fits a customer’s values is becoming an increasingly important factor in whether you retain them or they go elsewhere. Antavo discovered that 68% of businesses predict that more loyalty programs will support ESG causes. To back this, a survey carried out by Marriott Bonvoy revealed that 63% of those who took part said that environmental considerations now have an impact on their travel planning. 

There are challenges and the hospitality industry has been accused of being slow to act, but measures like supply-chain transparency; ethical sourcing and traceability are going to be increasingly important as customers think hard about who they want to give their loyalty to. 

The economics of retention

Whilst hospitality businesses must seek out new customers and reward their decision to choose your business, this costs around five times more than retaining existing ones. 

These are times of economic turbulence but also of innovation. Businesses must use all of the insight they have to make their customers feel appreciated and reward their loyalty to build relationships that can last years.