Loyalty program memberships offer significant benefits to both guests and hotels. Members receive exclusive perks and discounts as well as first-to-know offers. The program results in increased revenue for hotels per guest. A Cornell University School of Hotel Administration 2014 study found that guests who have hotel rewards memberships stay more nights than guests and generate approximately 50% more revenue.

Although the benefits are great, it is not easy to set up loyalty programs. To set up and maintain loyalty programs, you will need to invest time and money. To ensure guest acceptance, you must also market your program. Read on for tips and strategies that will help you create a loyalty program for hotels that adds long-term value.

Find out if your hotel group could benefit from a rewards programme.

A rewards program might not be economical for small boutique hotels that are independent and have only a few properties. It is important to have people who can decide the best rewards and approach and technology platforms to track members, reward points, and redemptions. The program must be managed after it is established. Even if the service is paid, it’s still necessary to monitor its success and ROI.

Here are some low-maintenance and high-overhead reward ideas:

• Every guest receives a reward punch card that can be used in the hotel’s cafe. This could encourage guests to purchase a cappuccino or yoghurt parfait on-site rather than going to the shops. It is important to make the reward achievable. Consider getting one cafe item for every five items you purchase instead of ten.
• Direct bookings get a 15% discount at the restaurant.
• Partner reward with the local tourist office, a 5-star restaurant or a nearby spa. A booking includes a discount on tourist excursions, dinners, and massages. These businesses will recommend your hotel to their clients as a favourite place.

A formal digital rewards program can be a great option for small hotels with more than one property or mid-sized hotel groups. These benefits include longer stays, higher visits and loyalty to your brand.

Tip: Business travellers should look for properties with rewards.

You can either build your hotel reward platform or select a service.

You have to choose the best way forward to create a formal rewards program that guests can track. There are many options:

• Creating the rewards program by yourself. From creating a portal to your website and even designing an app. This allows you to control your program’s design, feel, and rewards. It is also labour-intensive and time-consuming in the management and creation phases.
• Partnering with a loyalty program provider, such as Spoonify will help you create a branded reward programme for your hotel. These programs can be customized and are ready to build. They also include reporting and marketing.
• Joining a hotel rewards network. Your properties are added to an existing network that rewards members who search for hotels within the network.

Hotels will be able to set up their own rewards programs and join reward networks. Make sure that the reward scheme is aligned with your brand if you decide to go this route.

You can define loyalty for your hotel properties, but keep it simple.

How will points be earned, and when will rewards be given? These decisions should be made strategically to ensure that the program is beneficial to your hotel and your guests.

You may be rewarded for different types of loyalty.

• Upgrades and room bookings
• The anniversary date for joining
• Birthday of the customer
• Social media shoutouts
• Sign up for the newsletter
• Spending time in a bar, restaurant, cafe
• Frequent stays
• Extended stays
• Referrals

Your guests should understand how they can earn rewards and your rewards benefits. If the program is confusing or unclear on how they will benefit, people won’t sign up. Also, the rewards must be fair and meaningful. Changes to your rewards system can lead to frustration. Starbucks was subject to a strong backlash after updating its loyalty program for 2019.

It would be best if you also considered restrictions. You might have to consider whether there are blackout dates that you can use for points redemption during peak seasons. If points are not used within a specified time, will they expire? If the activity falls off for 18 or more months, will the rewards membership be cancelled?