What Do You Need to Do to Get a Guest to Return?
11 January 2024
In the hospitality industry, there's a pervasive myth that hotels enjoy a high rate of returning guests. This belief has shaped numerous marketing strategies, with a significant focus on efforts like email newsletters, loyalty programs, and personalized follow-ups aimed at enticing past guests to revisit. However, this is often not aligned with reality. Contrary to popular belief, the percentage of guests who return to the same hotel is typically far below ten percent. The mega-chains boast that over 50 % of guests staying in the hotel belong to their loyalty program, but the reality is that most of these guests are first-time guests at that specific hotel. This discrepancy between perception and reality presents a crucial challenge for hoteliers and marketers in the industry.
By recognizing that most guests are experiencing a property for the first time, hotels can shift their marketing strategies more effectively. Instead of heavily focusing on re-attracting past guests, the emphasis should be on understanding and appealing to potential new guests. The crucial moment comes when a reservation is made. This is an opportunity for hotels to personalize the guest experience, including upselling and offering additional services. The more a guest invests in their stay, the more likely they will be satisfied with their experience.
This blog post examines how a data-driven approach, targeted geo-marketing, and personalized guest experiences can transform this challenge into an opportunity for growth and increased guest satisfaction. Let's start by examining why guests are not returning to the same hotel as often as we hoteliers would like.
Why So Few Guests Return to the Same Hotel
The essence of this challenge lies in understanding the myriad reasons that discourage guests from repeating their stay. With an array of choices—from boutique inns to luxury resorts—guests are often enticed to explore new experiences In a world where novelty and variety are prized. Several key factors contribute to this trend, making securing loyal, returning guests challenging for a hotel.
Abundance of Options: Many choices extend far beyond many accommodations in today's travel landscape. Modern travelers have diverse hotel options and an ever-expanding list of destinations to explore. The ease of access provided by online booking platforms and a wealth of information on new and exciting locations continually fuels the desire for novel experiences. This abundance of travel options means that even when guests have a satisfactory stay at a hotel, the allure of embarking on a journey to an entirely new destination often takes precedence over revisiting familiar places. In this environment of endless possibilities, the appeal of new experiences often outweighs the comfort of the known, making it challenging for hotels to secure repeat visits.
Unique Nature of Travel Experiences: Travel is often seen as an adventure, a way to explore the unknown. This mindset encourages guests to seek out different experiences each time they travel, whether a new destination, a different type of accommodation, or unique local experiences. The desire for diverse experiences makes repeat visits to the same hotel less likely.
Impact of Destination Type: The nature of the destination plays a crucial role in determining the likelihood of a guest returning. For instance, hotels in once-in-a-lifetime destinations like remote islands or unique cultural landmarks may see fewer repeat visits simply because the destination is often a one-off experience for many travelers. In contrast, hotels in business hubs or cities with recurring events may enjoy higher repeat visitation rates as guests return for business trips or annual events.
Evolving Guest Preferences: The modern traveler's preferences are not static; they evolve rapidly, influenced by trends, peer experiences, and social media. What was a perfect hotel experience one year might not align with a guest's changed preferences or lifestyle the following year. Hotels must constantly adapt and innovate to keep pace with these changing tastes.
The combination of abundant choices, the quest for unique experiences, and evolving preferences is a challenging environment for hotels striving for guest loyalty. Understanding the nature of the destination and these factors is the first step in devising strategies to attract guests to the hotel.
Understanding Guest Segments for Geo-Targeted Marketing
To effectively attract and retain guests, hotels must first understand who their guests are and why they travel. This understanding forms the basis of geo-targeted marketing, a strategic approach that tailors marketing efforts to specific guest segments based on travel purpose and geographic origin.
Identifying Guest Segments: Categorizing guests into segments is a crucial step. Are they business travelers attending conferences or meetings? Leisure travelers seeking relaxation or adventure? Understanding the purpose of travel helps in crafting messages and experiences that resonate with each segment. Additionally, recognizing the geographic origin of guests opens up opportunities to customize marketing strategies that appeal to cultural preferences and trends specific to different regions.
The Role of Geo-Targeted Marketing: Once guest segments are identified, geo-targeted marketing comes into play. This technique involves creating marketing campaigns tailored to specific geographical areas. For example, a hotel in a beach destination could target guests from colder regions during winter months with promotions highlighting warm weather and beach activities.
Utilizing Data for Effective Targeting: The success of geo-targeted marketing heavily relies on data. Hotels must gather, analyze, and leverage data based on reservation records to understand guests, their reason for traveling to the destination, their preferences, and their behaviors. Hotels that pay attention to high-quality and complete data attached to each reservation will have a wealth of information for informed decisions.
Benefits of Geo-Targeted Marketing: By focusing marketing efforts on specific regions and tailoring them to the preferences of those guests, hotels can increase the effectiveness of their marketing spending. This approach not only boosts the chances of attracting guests but also enhances the likelihood of matching the right experience to the right guest, thereby increasing the potential for maximizing revenue per guest and repeat visits.
Understanding guest segments and employing geo-targeted marketing is pivotal in the hospitality industry's quest to attract and retain guests. By leveraging data to gain insights into guest preferences and behaviors, hotels can create targeted marketing strategies that resonate with potential guests, making them more likely to book a stay and return.
Personalizing the Guest Experience
Personalizing the guest experience has emerged as a potential key differentiator in the hospitality industry even though many mega-chains differentiate by brand but not necessarily by each property. The first step in personalization occurs when a guest is attracted to the hotel or an offer from the hotel. However, the journey towards real personalization begins when a reservation is made and continues throughout the guest's stay and even after they depart. Here's how hotels can effectively personalize the guest experience:
Starting at Reservation
The reservation stage offers the first opportunity for personalization. This is when hotels can begin to gather basic information about the guest, such as the purpose of their visit (business, leisure, special event, etc.) and any specific preferences or needs they might have. This information sets the stage for further personalization.
The period between booking and arrival is critical for deepening the understanding of the guest. Hotels can engage guests through the following:
- Questionnaires and Preference Forms: Sending a brief questionnaire or preference form via email, asking guests about their likes, dislikes, dietary restrictions, anticipated arrival time, and interest in hotel amenities or local attractions.
- Personalized Communication: Establishing direct communication channels, such as email or messaging apps, to offer assistance, answer questions, and provide relevant information.
Tailoring the Guest Experience
Based on the information collected, hotels can:
- Customize Rooms: Prepare rooms according to the guest’s preferences, like choosing a pillow type, room temperature, or stocking the minibar with preferred snacks and drinks.
- Personalized Recommendations: Offer tailored recommendations for dining, activities, or local experiences based on the guest's interests.
- Special Touches for Special Occasions: Acknowledge special occasions like birthdays or anniversaries with personalized gestures such as a complimentary dessert or a handwritten note.
During the Stay
Personalization should continue during the guest’s stay:
- Responsive Service: Train staff to be attentive and responsive to guest needs, showing a willingness to go the extra mile to enhance their experience.
- Customized Offers and Services: Based on guest profiles, offer customized services or promotional deals, like spa packages for leisure travelers or printing services for business guests.
After the Stay
The personalization journey doesn’t end at checkout. Post-stay engagement is crucial:
- Follow-up Communication: Send personalized emails thanking guests for their stay, asking for feedback, or offering incentives for future visits.
- Loyalty Programs: Encourage guests to join loyalty programs, which can be used to offer more personalized experiences and rewards in future stays.
Personalizing the guest experience is a continuous process that starts with the first reservation. By engaging with guests at every stage of their journey, gathering information, and tailoring services to their specific needs and preferences, hotels can significantly increase guest spending, enhance guest satisfaction, foster a sense of loyalty, and increase the likelihood of repeat visits.
Leveraging Technology for Analytics
Technology stands as a cornerstone in the hospitality industry in the quest to deliver personalized experiences and understand travel reasons, guest behavior, and preferences. Advanced technological tools enable hotels to gather, analyze, and utilize guest data more effectively, leading to enhanced guest experiences and informed decision-making. Here's how technology plays a pivotal role:
The Power of the PMS: Hotels underestimate the power of the hotel PMS by only using it as a transactional system for reservations and payments. However, hotel PMSs are invaluable in managing guest data. These systems store a wealth of information, including past bookings, guest preferences, feedback, and communication history. By analyzing this data, hotels can identify trends, tailor their marketing strategies, and anticipate the needs of returning guests, thereby creating more personalized experiences.
Data Analytics Tools: Data analytics tools go beyond mere data collection; they help interpret large volumes of data to extract meaningful insights. These tools can analyze booking patterns, guest preferences, and even online behavior, providing hotels with the knowledge to create targeted offers, improve services, and anticipate future market trends.
Artificial Intelligence and Machine Learning: AI and machine learning can link the hotel and the guests. AI-driven chatbots and virtual assistants can enhance the guest experience by providing instant assistance and personalized suggestions.
Real-Time Data Processing: The ability to process data in real time is crucial for responding to guest needs promptly. Technology like IoT (Internet of Things) in hotel rooms can collect real-time data on guest preferences, such as room temperature or entertainment choices, allowing for immediate personalization of their stay.
Enhancing Guest Experience with Technology: Beyond analytics, technology enhances the guest experience directly. Mobile apps enable guests to check in and out, control room settings, and access hotel services from their smartphones. Personalization can be taken further by integrating guests' digital preferences, like streaming services or digital newspapers, into their stay.
Leveraging technology for analytics is not just about handling data; it’s about transforming that data into actionable insights that can profoundly impact the guest experience. By harnessing the power of the hotel PMS, data analytics, AI, and real-time data processing, hotels can meet and exceed guest expectations, paving the way for increased satisfaction and potential repeat visits.
Conclusions and Takeaways
There is a myth that an older generation wanted to revisit the familiar places and often returned to the same hotel repeatedly. Younger generations are more interested in exploring new destinations and new experiences at a destination they have visited before. This makes it more difficult or almost impossible to increase the share of returning guests to a hotel. The job of a hotel is to attract guests, most of whom will be first-time guests. To succeed in this job, this blog post has several critical themes.
Understanding Guest Behavior: Understanding guest behavior is the foundation of any effective guest retention strategy. Recognizing the diverse reasons for travel and the preferences of different guest segments enables hotels to tailor their services and marketing efforts more effectively.
Targeted Marketing and Personalization: Geo-targeted marketing, based on guest segments and origins, allows for more precise and relevant marketing campaigns. Personalization, beginning from the point of reservation and continuing throughout the guest’s journey, is essential in creating memorable experiences that resonate with guests, encouraging them to return.
Leveraging Technology: Technology, mainly the hotel PMS and data analytics tools, plays a vital role in understanding and predicting guest behavior. These tools assist in personalizing the guest experience and provide valuable insights into potential geo markets and guest spending preferences.
Actionable Takeaways for Hoteliers and Hospitality Professionals
- Invest in Data Analysis: Develop capabilities to gather and analyze guest data to understand preferences and behaviors.
- Personalize Guest Communications: Use the data to personalize communications and services, starting from the reservation process.
- Embrace Technology: Implement technology solutions that enhance guest experience and streamline operations.
- Continuously Adapt and Innovate: Stay attuned to changing guest preferences and market trends, adapting services and marketing strategies accordingly.
- Focus on Building Relationships: Prioritize building long-term relationships with guests through personalized experiences and post-stay engagement.
By focusing on these areas, hoteliers and hospitality professionals can create compelling and satisfying guest experiences that meet and exceed expectations, fostering loyalty and potential repeat visits.