Loyal guests aren’t just great for your brand, they’re great for business. A study by Harvard Business School demonstrates just how effective guest retention can be at reining in costs. Incredibly, increasing customer retention rates by 5% grows profits by 25% to 95%. The study also found that acquiring new customers can cost companies 20%-40% more than retaining existing ones.   

Now, for the important question – how can hotels increase loyalty among guests? Promptness, courtesy and engagement go a long way in hospitality. In fact, they impact recall long after the guest has checked-out. The key is to engage with guests at the right time and in the right manner. Technology such as guest experience platforms powered by Hudini are one piece of the puzzle. They can help hotels connect with guests at every step from pre-arrival to post-departure, and across channels.  

There are a number of ways in which hotels can deploy technology to build loyalty, while also leaning on several other innovative strategies.

1. Personalized experiences

Guests who feel that a hotel has gone the extra mile to curate experiences especially for them are more likely to return. Technology like CRM software and hospitality apps remember guests’ preferences and can help tailor everything from room type to food recommendations and itineraries.

2. Sustainability & social responsibility

Younger guests aren’t just interested in a hotel’s ratings and amenities; they’re also mindful of its carbon footprint and involvement in the local community. A Booking.com study, for example, found that 72% of the respondents planned to stay at a sustainable property in the future.  

When guests believe that a hotel aligns with their values, they’re more likely to patronize it. It’s their way of contributing to a cause even when they’re traveling. Hotels that not just practice sustainability and local outreach but also involve guests in these programs can foster long-term relationships with customers.

3. Responsiveness to feedback

A recent study by Cornell University highlighted the impact of reaching out for and responding to feedback. The study found that any feedback, whether positive or negative, “signals a willingness to engage with the brand and increases the probability of them becoming loyal by almost 50%”. Not only should hotels request feedback within a few days after the guest’s departure, they must also immediately respond to the guest’s review. If it’s a negative one, guests note and appreciate it when corrective action is taken. 

While regular reviewers don’t need to be prompted to post a review, most guests will require a gentle nudge. It helps if your feedback email has a link to the review page so that guests can share their experience with just a few clicks. Remember, it’s not just the reviewer who will judge you by your response; potential guests also browse review sites prior to booking, and a well-worded response from your team can make a good impression.

4. Exceptional service, every time

This one might seem obvious, but it can’t be overstated. It’s not enough to achieve excellent standards; hotels must also maintain them. Guest experience platforms like Hudini can help establish this consistency by remembering guests’ preferences and offering valuable AI-based insights derived from data and feedback. Hotels can use these to enhance what guests liked and correct what they didn’t.  

Hotel apps can make stays more seamless for guests by helping them book rooms, check-in, order services and provide feedback through a single interface. They also benefit staff by automating basic tasks, giving teams more time to focus on guest interactions. Together, these factors create the impression that the guest is the hotel’s main focus.

5. Meaningful loyalty programs

Loyalty programs don’t just give guests a reason to return to your hotel, they’re also incentives to spend more during a stay. These days, hotels are making loyalty benefits more tangible and immediate. Think exclusive discounts, complimentary services, room upgrades and exclusive experiences.  

Data is also helping hotels tailor loyalty programs to different guest segments. For example, a PwC study pointed out that millennials mostly redeem loyalty points for upgrades, whereas older guests opt for free nights. Such insights can make loyalty programs more valuable for guests and hotels.  

Repeat guests have an excellent customer lifetime value for several reasons. Firstly, they often choose to book directly on hotel websites, saving commission fees on third-party booking engines. They’re also vocal brand ambassadors; their positive reviews and referrals can be as effective at new customer acquisition as a great ad campaign, and at a fraction of the cost.  Business benefits aside, loyal guests are a great reward to the hotel and boost staff morale. They’re proof that their hospitality wasn’t just appreciated, but also remembered.