Hotel Loyalty Programs Boost Revenue
By Alex Palmer
December 10, 2013
The financial benefits of hotel loyalty programs were illustrated by recent research that found that members of the programs were far more likely to extend their stay and make additional purchases than non-members. The research, the 2013 Hotel SCORES syndication, drew on the responses of more than 12,000 frequent-guest program members across 11 countries, getting their opinions on hotel usage and travel spend.
The study, conducted by Phoenix Marketing International, found that among individuals who redeemed a room award, almost three-quarters (73 percent) purchase at least one additional room night with each award. These redeemers purchased an average of 2.1 room nights with each night’s redemption.
“It’s an important finding for the hotel owners and franchisees, answering questions about the value of the program,” said John Antonello, division managing director, of Phoenix Marketing International’s travel and leisure group. “A frequent-guest program is not just giving away nights — guests are buying additional nights, and paying for F&B and other services.”
Phoenix has been running the Hotel SCORES study for 10 years, and Antonello said that compared to earlier years, 2013 saw respondents acting more focused in their use of loyalty programs — sticking with just one or two a majority of the time, rather than the three or four that had been the case in earlier years.
The study pointed to additional Phoenix findings on what the company called “the loyalty continuum” in which as members move up a program’s ranks, they become more committed to that brand. On average, the research firm found that non-members may spend 10 percent of their room nights at a particular hotel brand, but this quickly increases as the individual becomes a member (spending 24 percent of room nights with that brand), active member (31 percent), and elite member (54 percent).
“When I start reaching elite levels in the program, I’m literally giving 60 percent or more of my nights for a particular program,” said Antonello. “As a hotelier, you are really getting major business thanks to the program.”
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