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Hotel Loyalty Programs E-mail

Written by Ken Rutkowski, on 06-02-2008 23:58


Hotel loyalty programs are growing. These club memberships have grown by almost 12% and are having more of an influence on hotel-brand selection. Members of hotel loyalty programs are almost twice as likely to return to a hotel compared to nonmembers.

Beyond the repeat hotel business these programs encourage, club members typically spend more per room, are less sensitive to price increases, and are more satisfied with their hotel experience. But competition among industry offerings has increased, and the average frequent traveler belongs to multiple loyalty programs. To understand these customers and identify ways to retain members and attract more people to the clubs, we examined the profiles of members and nonmembers of hotel loyal programs. Here are some differences between the groups.

• The percentage of all guests who indicated club membership is "very important" when selecting their most recent hotel stay increased steadily throughout 2003 with a 25% annual increase. Features such as points transfer and instant redemption combined with no blackout dates and no point expiration are making it faster and easier for members to redeem points.

• Frequent travelers (15 or more roomnights per year) are four times more likely to consider club membership very important when selecting a hotel. Frequent travelers represent more than 50% of all roomnights sold in the United States.

• Among frequent travelers, club members have considerably higher incomes, pay slightly more per roomnight, stay more nights per year in hotels and are more tolerant of price increases compared with nonmember hotel guests.

• The average profile of a frequent traveler who joins a loyalty program is a 47-year-old male traveling on business. He stays 31 nights per year in hotels, is very brand loyal, pays an average of $103 per night (but would pay another $11 before switching brands) and has an annual income of $104,000.

• Loyalty-program members are much more likely to make their reservations online than nonmembers. Loyalty-club members use the Internet 43% of the time to make their hotel reservations. Nonmembers go online 32% of the time to book their hotel rooms.

• Fifty-nine percent of loyalty-club members use the hotel's or brand's Web site to make their online reservations. Nonmembers use these Web sites only 27% of the time.
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