Social media and hotels
Why Hotel Loyalty Programs are Good for Hotels
Why Hotel Loyalty Programs are Good for Hotels
Generating new business and attracting new guests requires significant investment in marketing and advertising. Media campaigns, improving your search engine optimization, or paying online travel agents such Booking.com a higher commission hurt your bottom line and are drag on your capital resources.
It is far more logical to develop a steady flow of repeat business from your past guests. Research carried out by Second Opinion Marketing found that it cost five to eight times less to retain existing customers than attracting new customers.
One of the best ways to boost your hotel’s repeat business is to establish a guest loyalty program. This blog will provide you with an overview of hotel loyalty programs and the benefits a loyalty program can bring to your hotel.
How Hotel Loyalty Programs Work
A hotel loyalty program works in very much the same way as frequent flyer miles work in the airline industry. Guests accumulate free awards when they make repeated purchases with a hotel. Typically a hotel loyalty program will offer guests (depending on the amount of points they have earned) value-added benefits such as free room upgrades, early check-in and late check-out, free spa treatments and guaranteed room availability.
Jennifer Nagy in her blog, The Importance of Hotel Loyalty Programs, argues that the so-called ladder format is the best format for a hotel loyalty program. As members of the loyalty program earn more points, they are able to redeem their points for higher-value rewards. “This format makes the ladder system effective at incentivizing loyalty amongst hotel guests,” writes Nagy.
The format of the ladder system also means that guests with a small or medium size budget to spend can benefit from a hotel’s loyalty program. Many hotels make the mistake of solely targeting their loyalty program on elite guests who are able to spend huge sums of money when staying at a hotel. To get the most out of a loyalty program you will have to make sure there are attractive rewards on offer to all guests and not just guests with big wallets.
Communication To build loyalty and generate repeat business among members of your loyalty program you will have to find an effective and efficient way to communicate with your program’s membership. Members of your loyalty program will need to know how many points they have, how they can redeem them, and what rewards they are entitled to. Some hotels have introduced a standalone app for reward management, while other hotels communicate with members through general hotel management apps that also provide guests with information about check-in and check-out as well as information about loyalty points. You can also simply send your members an email notifying them of their points and what their entitled to.
The Benefits of a Hotel Loyalty Programs
Hotel loyalty programs have been around since the early 1980s and were developed by large hotel chains to ensure guest retention and to encourage active purchases. However in recent years some experts in the tourism and hospitality industry have started to question the value of loyalty programs for hotels.
Critics of loyalty programs point to the fact that it costs hotels somewhere between 1% and 5% of room revenue to create, promote, and operate a loyalty program.
So do loyalty programs benefit hotels or are they a waste of time and money? The Centre for Hospitality Research carried a study of 50,000 hotels in North America over two years to determine if hotel loyalty programs were worth the time and money hotels spend on them.
The study found that, once a guest signed up to a hotel’s loyalty program the frequency of stays booked by a guest at that hotel rose on average by 49%. The study also found that loyalty programs accounted for a 57% rise in bedroom revenue.
The authors of the report wrote, “Hotels in the study are seeing a substantial revenue increase when their guests enroll in a properly conceived and executed program.” The authors went on to write, “Loyalty programs can and do deliver positive results in terms of revenue, stay frequency, and guests spending.”
Loyalty programs also provide hotels with a wealth of information on their guests. Hotels that operate a loyalty program have insight in to who their guests are, what they like, and where there from. All this valuable information can be used by hotels to create laser focused marketing campaigns for various different kinds of guests.
Conclusion
There has been a trend recently amongst big utility companies to offer very good deals to new customers while simultaneously raising prices for existing customers. I have argued throughout this blog for hotels to do the opposite, and to concentrate on guest retention and less on attracting new guests. It makes far more sense for hotels to generate more repeat business than constantly trying to drum up new business.
Loyalty programs are becoming an increasingly important factor in determining what hotel a guest decides to book a stay in. A study carried out by Market Metrix found that the desirability of a hotel’s loyalty program ranked fourth in the top deciding factors that influence guests when booking a hotel.
If your hotel doesn’t have a loyalty program then get your team together and make it your top priority to develop an efficient and effective loyalty program for your hotel.
To read more blogs about the hospitality industry click the link: http://gogroupbooking.com/category/blog
Up-selling is the name of the game
One of your regular customers comes into your hotel bar and asks your barman for a whiskey and coke, your barman notices that the customer is looking a bit down and ask, “Do you want me to make it a double.”
A husbands calls your hotel to book a weekend stay for himself and his wife; your receptionist ask him has he booked your hotel for a special occasions and he replies, “it’s our wedding anniversary,” your receptionist asks, “Sir would you like me to arrange for a bottle of champagne be brought to your bedroom on arrival.”
The above anecdotes are all really great examples of hotel staff up-selling to guests. In this blog I will explain all the advantages and benefits up-selling can bring to your hotel and provide you with information on how to up-sell to your guests.
Overview of Up-selling
Up-selling is used by a large and growing number of companies across many different industries as a key component in their marketing and revenue generating strategy. Electronic stores offering extended warranties and home deliveries, trades people offering upgraded kitchen and bathrooms, and airlines charging passengers extra for extended leg-room are all great examples of different businesses using the up-selling model to increase their profits.
However the hospitality industry has been slow in adopting the up-selling mode. Instead hotels have favoured providing high valued guests with free upgrades, in hopes of attracting repeat business and brand loyalty.
Up-selling simply involves a sales person (In a hotel this would be the receptionist, reservation manger, or revenue manger) selling an existing customer a more expensive or additional product or service. In the context of the hospitality industry this could mean a hotel offering guests the chance to purchases a more personalised service or access to extra hotel amenities such as the spa or gym.Perhaps the reluctance amongst hoteliers to fully adopt up-selling can be explained by the misconception that in order for a hotel to up-sell to its guests it must provide premium inventory to get maximum value.
Fortunately hotels like every other enterprises only has to focus on the advantages their business has in order to up-sell. It is also very important to note that up-selling can also allow a company to turn a perceived disadvantage into advantage.
Tim Peters in his eBook, When More is More, gives the example of a hotel located close to an airport that up-sells its runway view bedrooms to families with young children. As you know a bedroom with a view of a runway would not be very desirable and most hotels would offer those bedrooms at a much lower rate. However the hotel that Peters gives as an example was able to up-sell runway view bedrooms by marketing the rooms as making the hotel experience more memorable and enjoyable for children, because they can watch the planes land and take off.
Hotels situated in city centres have found they can up-sell their smallest rooms by marketing them as executive efficiency bedrooms, which offer business travellers breakfast, faster internet speeds, and mulit-function printers.
The Up-sell model works because people don’t have an in build value meter that tells them how much things are. Instead people focus on the relative advantage of one thing over another, and estimate the value accordingly. All you have to do is offer your guests a service or product that has perceived value for your guests.
It is up to every hotel manager, revenue manger, and marketing manger to up-sell every aspect of their hotel. As we have seen from the examples above there is very little of a hotel that cannot be turned into an up-sell and a disadvantage can be turned into advantage.
The Benefits of Up-selling
If you want raise your hotel’s revenue through increasing your occupancy rate you will have to spend valuable resources on prompting your hotel online through paid search, SEO activities, buying advertising in the media or paying higher commissions to online booking agents like Booking.com and Late-Rooms.com.
If you try and raise revenue through increasing room rates you risks coming up against guests’ resistances and loss of market share to your competitors. The beauty of the up-selling model is it allows you to increase your hotel’s revenue without having to spend huge amounts of money or risk losing guests.
The advantage of benefits of up-selling:
- Higher profitability
- Stronger guest loyalty
- Increased referrals
- Shorter sales cycle
- Greater utilization of hotel facilities
How and where to Up-sell
- Coaching and Training:
It is essential that your staff are trained and confident in up-selling to guests. Make sure your employees have an in-depth knowledge of the services and products you are trying to up-sell. Make sales part of the job description for your reception staff.
- At Booking:
You can start up-selling as soon as a guest makes a booking. If a guest books on the phone make sure your reception staff tells the guest about the special offers your hotel has to offer. Alternatively if your hotel has an online payment system you can set up automated emails to be sent out to new bookings informing them about all your up-sell offers.
- At Check-In:
The check-in offers you and your staff a great opportunity to up-sell to your guests. A guest may have booked a basic package but get your reception staff to offer every guest the chance to upgrade to the deluxe package. Remember that guests don’t like to be sold but do like to buy. So don’t try and push the up-sell on your guests, up-selling is not about the hard sell.
- Check-Out:
It may seem strange but a great time to up-sell is when your guests are checking-out. Inform your guests about your hotel’s loyalty program and your promotional offers. Up-selling at check-out time will get guests use to been offered up-sell services which will lead to guests been more open to buying up-sell services in the future.
Conclusion
As mentioned early in this blog getting more guests is not easy and can be very expensive. An article from the Irish Daily Mail found that hotel booking sites are charging hotels between 15% and 25% commission on every booking. Up-selling allows you to get the most out of your business and increase your revenue without investing heavily on marketing, and paying online booking sites outrageous sums of money. If you haven’t fully embraced the up-sell model now is the time to do it.
How to Raise Your Prices and Rates Without Losing Guests
The King of Wall Street, Warren Buffett once said, “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
Increasing bedroom rates is of course one of the chief ways hotel owners and managers boost income and profit. However due to the fear of losing guests and market share many hoteliers are weary of increasing their prices. This was especially so during the Great Recession.
Many hotels got stuck in the trap of constantly dropping their prices in a bid to attract guests away from competitor hotels and protect their market share. As a result hotel bedroom rates have plummeted and hotels have found it a challenge to turn over a profit.
Thankfully as the economy has started to recover and to grow again, hotel bedroom rates have also started to creep up. No business and no industry can grow or expand if prices are continually falling or stagnating. Rising prices mean hotels can grow and expand again.
My ambition for this blog is to give you some helpful tips and practical advice on how to raise your hotel’s prices without losing guests.
Value and Pricing
The value of a product or service is the worth customers places on a product or service. The higher the value the higher the price you can charge. The vast majority of successful businesses are successful because they get the match between price and value right.
When the time comes to raise your prices you should also raise the value you offer your guests. Remember that a higher price implies greater quality. It is critical you get the match between price and value right. Failure to get the match between price and value correct could lead to customer resistance and a decline in the number of guests visiting your hotel. Always remember that price is what your guests pay and value is what they get.
Pricing Strategy
When setting the price for a product or service there are three primary methods to choose from. The three approaches to pick from are cost-based pricing, completion-based pricing, and customer value-based pricing.
All three mechanisms have their advantages and disadvantages, but the consensus amongst business experts and those working on the frontline is that the customer value-based pricing method is the best pricing strategy over all.
Andress Hinterhuber in his article (Sited above), writes, “The increasing endorsement of the customer value-based strategies among academics and practitioners alike is based on a general recognition that the keys to sustained profitability lies in the essential features of customer value-based pricing.
These include understanding the sources of value for customers; designing products, services, and solutions that meet customers’ needs; setting prices as a function of value; and implementing consistent pricing policies.”
Choosing the Right Time
Choosing the right time to raise your prices is crucial. If you get the timing wrong your risks losing guests to your rival hotels.
It is generally accepted that the best time to raise prices and bedroom rates is just before a busy period. If you want raise your bedroom rate for the busy summer season, then start making perceptions for the price increase in early spring and then raise your prices in April just before the start of holiday season.
The Freedium Model
Judith Aquino in his blog, recommends employing the freemium model of pricing. The freemium model works by offering a basic product or service free of charges while charging a premium rate for advanced services.
There is a growing trend in the hospitality industry of using the freemium model in relation to internet and WI-FI services. A hotel could for example give its guest’s free basic WI-FI but then charge a premium rate for an upgraded service that offers faster download speeds and better accessibility.
There is considerable scope to expand the freemium model to other aspects of your hotel business. For instance you could offer your guests a cheap bottle of wine for free with their dinner and then charge a premium rate for a higher quality bottle of wine.
Conclusion
This blog has been about how to raise your prices while avoiding guest’s resistances. After reading this blog I want you to walk away with the confidence and self-belief to raise your prices and not fear losing guests and market share. Rising prices are a sign of a hotel’s health and vitality.
Turning Prospects into Guests
Turning as many prospects (potential guests) into paying guests is obviously going to decide if your hotel is going to be a success or a failure. Filling your bedrooms night after night, week after week is what it’s all about. But we both know that’s easier said than done.
However there are some simple steps you can take to ensure that you convert more of your prospects into paying guests.
What is Your Unique Selling Point
You have to understand when somebody is looking for a hotel they are going to be offered a lot of choices. In actual fact they will be presented with so many hotel choices they won’t possibly be able to look at and investigate every hotel the internet offers them.
So how to do you attract potential guests to your hotel and not your competitors? The answer to this central question lies in making your hotel stand out from the herd of hotels that Google shoots out at people.
This hotel certainly stands out
Or maybe your hotel is the only hotel in the area that allows guests bring their pets with them. There are a lot of pet lovers out there and they will really want to know if your hotel allows them to bring their beloved four legged babies.
This little guy is enjoying his night away
You have to constantly advertise and publicize what makes your hotel different from all the rest. The days when you could simply throw open the doors of your hotel and watch the guests roll in are over. Selling hotel bedrooms are like selling any other service or product; you have to fight hard for every guest. Always remember that uniqueness will differentiate your hotel from your competitors and thus draw more guests towards your business.
Promotions and Packages
Neil Salerno in his article, 5 Simple Ways to Improve Hotel Sales in a Lousy Economy, argues that adding value is key to turning prospective guests into paying guests. Salerno advocates creating and promoting special packages as a way of adding value to your hospitality business. Salerno also points out that establishing special packages will allow you to mask the through rate of your bedrooms.
If your hotel doesn’t have packages at the present time you should sit down with your key team members and put your heads together to come up with different packages for the different types of guests which stay at your hotel. Quite a number of hotels find it both useful and profitable to design packages exclusively for hen and stag parties.
Follow Ups
Amazingly many hotels fail time and time again to follow up on inquiries made by prospective guests and possible group bookings.
There are so many hotels that are losing out on bookings and revenue, because they don’t put in the time and effort to follow up on promising inquiries.
Collecting contact information will allow you and your staff to touch base with potential guests after their initial contact with your hotel. It also gives you the chance to up sell to your guests and group bookings, and gives your sales and marketing departments the opportunity to send promotional material to possible guests.
If your hotel operates an over relaxed attitude towards following up on inquiries from prospect guests, then its time you shake up the culture in your hotel. It should be every hotel’s policy to always follow up on potential inquiries from possible guests.
Don’t Rush to Drop Room Rates
Many hotel managers who find they are having trouble turning prospects into guests will immediately drop room rates.
Reducing room rates may seem like a reasonable course of action when you’re struggling to get paying guests. However, this is not always the case and in many cases it is the wrong move to make and will do more harm than good.
Instead, hotel managers should come to regard dropping room rates as the nuclear option and should only drop room rates after all other marketing options have been exhausted.
Dropping the room rate is the nuclear option
Salerno in his article (sited above) writes, “Reducing rates is the lazy-man’s form of marketing. It’s generally the first thought when sales are low; after-all, it takes very little thought and certainly very little research and/or effort. If reducing the room rate worked hotels with the lowest rates would be full all the time.”
If you are struggling to generate a higher occupancy rate for your hotel, you should consider up-selling more to your existing guests. Many hotels find it both beneficial and very profitable to up-sell to guests. For example, if your hotel caters for a lot of couples you could create a special romantic package and charge couples a premium for the package. Always remember that people hate to be sold but love to buy, so make sure that any packages you create have value for guests.
Conclusion
It is of Paramount importance for the growth and survival of your hotel business that you are able to convert prospects into guests. To put it simply the success of your hotel relies on your ability to turn as many prospects as possible into paying guests. If you are worried that you are not converting enough prospects, then why not implement the steps outlined in this chapter?
How to Capture More Leads from your Web Traffic
The Sale Funnel
Are you getting the most out of your website? Does your website generate enough customers for your business? Or is your website a bit of an under-performer when it comes to attracting customers?
In today’s online world it is critical that your website is front and center in your marketing and sale strategy. In this blog I want to share with you some useful tips on how to get the most out of your website, and how to capture more leads from your web traffic.
Let’s start by defining what a lead actually is
A lead is simply a marketing term for a person who has visited a website and is willing to leave behind some kind of contact information. This could be an email address, a home address, or a phone number. The challenge is to convert your site’s web traffic into hot leads for your activity center.
Structuring your website
If your finding that your website is getting a lot of traffic but you’re not capturing enough leads, ask yourself how user friendly is your website? Is fundamental information easily found and clearly displayed on your website?
• Can potential customers easily make a booking
• Are your facilities clearly displayed
• Can group bookings book and pay for their activity through a group payment system on your website
Or is the opposite the case? Is your website a labyrinth of pages where leads have to search through page after page just to find out basic information?
Always keep in mind what people are looking for on your website. Prospective customers will just want to know about:
• The types of activities you offer
• Your prices
• How to book and pay for their activity
• Your Location
• How to book and pay for group events.
It is crucial for your business that vital information can be found without difficulty by possible customers. Nobody is going to search through a maze of web pages looking for basic information that should be easy to find.
Website Navigation
Link Solutions recommends organizing all of your content into categories. For instances, activities and offers, prices, your facilities, and group event information should be separate categories.
Try and limit yourself to seven main categories, you don’t want to overload your leads and customers with loads of information and loads of different categories.
If you find that you need more than seven categories which often happens then label one of your categories as MORE and provide a drop down menu and add in all your subcategories.
If you need any more information about how to make your website more users friendly and easier to navigate you should check out link solutions website, you will find loads of good tips at www.hotellinksolutions.com
Branding and design
How you brand and design your business online is also extremely important. You must always be aware that your website allows leads and possible customer to form a first impression of your activity center; And first impressions are everything in business, customers look before they book. People are not going to look twice at a business that doesn’t look good online.
A good tip when it comes to designing your website is to use your company’s brand colours. Don’t use new colors no matter how good you think they look. Try also to standardize your logo and color scheme.
The font size you chose for your website is another vital factor for you to consider. You have to put some thought and time into it. You need to pick a font that is easy to read and that looks good. You will also need to make sure the font colour you choose can be read against your website’s background. Arial, Verdana, Tahoma, Times New Roman, and Comicare are all good fonts for business websites.
Languages
If your activity center has a lot of customers coming from countries that don’t use English as their first language, then why not offer a translation service on your website? Providing a translation service on your website will take some time and effort but it is a great way to capture more leads from countries that are not part of the English speaking world.
It is only logical that consumers travelling from France, Germany, or any other country that doesn’t use English on a daily bases would choose an activity center that offers a language service. Just think how impressed tourist from Europe would be if they could read what your activity center has to offer in their mother tongue.
If you decide to add a translation service to your website look up Google translate.Google Translate will walk you through the rest of the process. However it is important to realize that Google translate is the cheap choice and may not be the best option.
There are a number of other language translations companies on the market that will for a fee translate all your website content into whatever language you want.
Images
Up loading images to your business website is another really great way of engaging the attentions of leads. People will always check out your images before reading any written content.
The right images used in the right way can make a huge difference to your company’s reputation and bottom line. But be cautious with the pictures you put up on your website, just as the right images can attract lots of leads and customers. The wrong images can turn people of your business and lead to you missing out on bookings.
Conclusion
This blog has been all about how to captures more leads from your website traffic. It is essential that you invest both time and money into developing the right website for your business. Always remember that your website is your company’s primary marketing tool. You have to get it right.