As we enter the busy travel season, hotels and motels will be competing for their share of the leisure travel market. One form of industry marketing, loyalty rewards programs, has been particularly popular among providers recently. But, are these programs delivering benefits that add to the bottom line? Research from Cornell University’s Center for Hospitality Research suggests these programs are yielding big returns, especially when they target a specific type of guest.
Historically, hotel rewards programs have been designed to increase loyalty from guests who already stay at a specific property or chain. Researchers found that mid-priced properties earn $70.19 a night from non-rewards members. These guests typically make an average of 1.15 visits annually, stay 2.84 nights and generate annual revenue of $190.75. On the other hand, members of a rewards program result in a revenue average of $97.65 per night. These guests visit the property 3.26 times a year for a total of 8.69 nights and they pay $712.59 a year.
Researchers point out that motels and hotels experience the following boost in key performance indicators from their most loyal guests when they participate in a rewards program:
- Average revenue per night: +4%
- Total nights per year: +45%
- Total stays per year: +45%
- Total revenue per year: +57%
Ad-ology Research has learned that just over 50% of consumers will take a vacation in the U.S. in the next year. About half (46.6%) of these consumers are planning a trip to the beach. Amusement parks (35%) and casinos (27.8%) are also popular destinations with domestic travelers. These businesses may want to engage in a joint promotion with hotel properties to increase business. 60.6% of domestic travelers note that magazine ads (in all formats) influenced them to take action in the last year. 59.2% say the same about ads that were mailed to them. Hotel properties may want to increase their direct mail promotions to recent guests to generate more participation in their loyalty programs.
AudienceSCAN data is available as part of a subscription to Ad-ology PRO. Media companies can access AudienceSCAN data through the Audience Intelligence Reports in AdMall.