Hotel Loyalty Programs: Marketing Tactics

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Hotel Loyalty Programs: Marketing Tactics

Referral programs, email, partnerships, and word of mouth are some proven successful marketing tactics for hotel loyalty programs. InterContinental Hotels and Choice Hotels are some of the most renowned hotel companies in the US using these marketing strategies.

SUCCESSFUL MARKETING TACTICS OF HOTEL LOYALTY PROGRAMS : OVERVIEW

Referral Programs

  • For hotels trying to market their loyalty programs, experts recommend having referral programs. This is reportedly one of the most effective ways to advertise a hotel loyalty program.
  • Studies have shows that US consumers are more likely to use a product, service, or brand recommended by a peer than they are to use one seen on traditional advertising. Through a referral program, hotels are able to get access to their customer's circle of family, friends, and acquaintances.
  • A referral program can be assigning a referral code to current members of a hotel's loyalty program and encouraging these members to share the referral codes for more points or a different perk. A study by Harvard Business Review revealed that customers referred by a friend are almost 20% more likely to remain with the company.
  • Hotel Tonight is one brand doing this. It encourages loyalty and new customer acquisitions with benefits for referrals. In the email example shown here, it offered loyalty members a unique code for friends and family. When a new customer uses the code, both the loyalty member and the new customer get a $25 discount.

Email

  • Sending hyper-personalized emails related to loyalty programs is known as another effective way to grab the attention of US consumers.
  • With an ROI of over 28%, email is known to be significantly more important than direct mails, which have a ROI of 7.5%. US customers are 28% more likely to open an email when the subject is personalized.
  • Loyal customers of hotel brands want to be valued for their loyalty and patronage. Receiving personalized emails about the loyalty program a hotel offers gives them a sense of exclusivity. Personalized emails can help hotel brands build an emotional connection with customers.
  • Hotel brands can send first-time guests a personalized post-stay email acknowledging their visit, thanking them for their stay, and sharing the perks of being a member of their rewards program.
  • Thompson Hotels is one brand that does this. After every booking or brand interaction, it sends personalized emails asking members for feedback on its loyalty program. It uses this feedback to make changes that will help enhance customer experience.

Word of Mouth

  • Word of mouth is another effective method of advertising a hotel rewards program.
  • When guests check in, hotel brands need to ask if they are part of the loyalty program and offer information about being a part of this program.
  • Brochures about this loyalty program can be left in the guestrooms and on the front desk as well.
  • Choice Hotels does this. It encourages its front desk attendants to always talk to guests about its loyalty program. Brochures of this loyalty program are arranged by the check-in area as well.

Partnerships

  • Striking strategic partnerships for a loyalty program is an effective way to not only tap into combined larger customer bases but also broaden loyalty perks.
  • Hotel brands are advised to combine their efforts with other brands in the hospitality & travel sector, including airlines so they can offer complementary experiences in their loyalty programs.
  • IHG Hotels & Resorts is one brand that does this. It partners with companies like MasterCard for its loyalty program.

CASE STUDIES OF HOTELS WITH SUCCESSFUL MARKETING TACTICS FOR LOYALTY PROGRAMS

Choice Privileges

  • The Choice Privileges program is a loyalty program offered by Choice Hotels. The program rewards members with points each time they stay at a Choice brand hotel or vacation rental. The program is divided into four tiers. They include Basic, Gold, Platinum, and Diamond. Typically, basic members earn $10 per $1 spent. Gold, Platinum, and Diamond members earn an additional 10%, 25%, and 50% bonus points respectively.
  • Through this program, members are able to earn points for free stays at Choice Hotels brands like Comfort Inn and Econo Lodge. Members can also cash in their points for free stays at participating Preferred Hotels & Resorts properties. Members of this loyalty program are able to earn points for car rentals, flower deliveries, and cruise vacations, among many other perks.
  • Choice Hotels uses a wide range of strategies to promote its loyalty program. The company uses public relations tactics like press releases and press events. Visitors at any of its hotels see marketing materials - like brochures - for its loyalty program displayed at the front desk. Choice instructs the front desk attendants at all its hotels and vacation rentals to ask every guest that checks in if they are enrolled in its loyalty program. These attendants urge guests to enroll in the program if they haven't.
  • The loyalty program is also advertised on all its websites including choicehotels.com and choiceprivileges.com. Choice uses Reservation Contact Center Promotions. The brand also advertises its loyalty program on travel & vacation directory pages, as well as, blogs such as Nerd Wallet.
  • Another way the Choice Privileges program is advertised is through partnerships with companies like Amtrak and Avis. Choice Hotels sends emails, direct mails, and quarterly newsletters about its loyalty program to its customers and people who have stayed at any of its hotels.
  • The brand also uses TV commercials to get more members for its loyalty program. In 2018, it launched a TV ad called "Badda Book. Badda Boom." The ad featured a man in a suit summarizing the experience of booking with Choice Hotels in just four words: "Badda Book. Badda Boom." A bystander clarifies "that the website offers a lowest-price guarantee for rooms and allows customers to receive free nights and instant rewards at check-in."
  • Choice utilizes social media, video, and high impact banners to advertise its loyalty program and connect with more consumers in the US. It has a highly rated mobile app that it uses to encourage people to enroll in the Choice Privileges program for points and cash.
  • As evidenced by the surge in new Choice Privileges members and program engagement within the last few years, it is clear that its marketing strategies have been successful. US News named its program as the fourth best hotel loyalty rewards program in the US.
  • Choice Privileges has been successful because it was promoted using a plethora of marketing tactics, including atypical strategies like Reservation Contact Center Promotions. Choice also leveraged different marketing strategies for different demographics. For example, direct mail for older customers and social media or younger customers.

IHG Rewards Club

  • The InterContinental Hotels Group's Rewards Club allows members to earn rewards within its extensive network of hotels, such as Holiday Inn and InterContinenetal. Members are also able to earn points on hotel stays, air travel, and daily purchases using the IHG Rewards Club Traveler Credit Card and the IHG Rewards Club Premier Credit Card by Chase.
  • These points are earned by staying at any hotel within the InterContinental Hotels Group's network and buying goods and services with IHG partner vendors like OpenTable and Groupon. The loyalty program is divided into our tiers: Club, Gold Elite, Platinum Elite, and Spire Elite.
  • In general, IHG uses several marketing tactics for its rewards program, including direct mail and its mobile app. In 2019, it was signed as a major sponsor of the US Tennis Association (USTA) as a cornerstone in its strategy to centralize and strengthen its loyalty program.
  • Recently, IHG released a campaign called #TravelFirsts. The company described this campaign as a ""Thank you" to IHG Rewards Club members" for helping it reach 100 million members - an "industry first among hotel loyalty programs."
  • Through emails, social media platforms like Instagram, and paid media, the brand sent messages to its customers to share their travel-firsts and the new experiences that make them keep traveling again. These moments could be the first time they visited a new continent or did anything new through travel.
  • IHG created blog posts, videos, and a landing page to announce the campaign. It also formed the hashtag #TravelFirsts so "member stories could be searched, collected, and shared for inspiration." Using tools like Sprinklr and BazaarVoice, IHG gathered and shared some of the most compelling stories on its campaign website and social media channels.
  • The brand also collaborated with MasterCard to introduce a contest called Priceless Experiences. Through this, "guests who posted their #TravelFirsts, along with the hashtags #Priceless and #Contest, could win one of four exciting journeys to New York, Las Vegas, Los Angeles, or New Orleans."
  • Just two months after the campaign launched, the campaign video already had 3.8 million views and 37,000 website visits. IHG launched this campaign to drive conversation, "delight members, and showcase stories only great travel can provide."

TOP HOTELS IN THE US

The Venetian and The Palazzo

  • With 7,117 rooms, The Venetian and The Palazzo is the largest hotel in the US and the second largest hotel in the world. Its website can be found here.
  • It is known as one of the best themed hotels in Las Vegas as it boasts of an Italian design with replicas of the top landmarks in Venice like Doge's Place. The Venetian is also the most romantic hotel in Las Vegas. It is owned and managed by Las Vegas Sands Corporation.
  • The brand leverages several marketing tactics, including print ads as seen here, TV commercials, digital banner ads, e-mail, out-of-home ads like billboards, and social media campaigns.

Loyalty Program

  • Grazie is The Venetian and The Palazzo's premier loyalty program. It allows users to earn points on accommodations, purchases such as spa services, retail purchases, and video poker play, among others.
  • It appears the loyalty program targets poker players. A few years ago, The Venetian and The Palazzo offered the chance to win cash prizes for people who sign up for its loyalty program. These customers were awarded prizes for every 500 slot reward points earned. This offer was advertised on its Facebook, Instagram, and Twitter accounts.
  • In 2019, it partnered with Caesars Entertainment so that its Platinum members could earn rewards at the casino. The Venetian resort also uses video ads. It ties in its loyalty program with that of other hotels like IHG. Members of the Grazie program are able to transfer their slot reward points for IHG Rewards Club points and redeem them for IHG hotel stays.
  • It recently released a video featuring colorful themes and people doing several activities, including playing poker, getting a massage, eating luxurious meals, and shopping. The key messages in this ad include "when you say "hi there," we say Grazie" and "when you say "spoil me," we say Grazie."
  • The Venetian has brochures in all its hotels about the Grazie loyalty program. These brochures are headlined "want the world? Get it with Grazie rewards."
  • The brand frequently markets its loyalty program on Twitter, Instagram, Facebook, and YouTube. One of its recent tweets mentioned; "Club Grazie, our premier Loyalty Program is a great way to earn points when you eat, sleep, shop & play. Learn more."
  • The tone used to market the program on its website is one of simplicity, luxury, and style. This is evidenced by its use of terms like "the Venetian (Grazie member) prefers enrichment to riches and believes the world is her oyster."

MGM Grand Las Vegas + The Signature

  • MGM Grand Las Vegas + The Signature has 6,852 rooms making it the second largest hotel in the US and the third largest hotel globally. It is also the largest hotel in Las Vegas.
  • The iconic hotel has served as a venue for several performances and events, including iconic concerts and memorable boxing matches. It has several shopping centers, casinos, restaurants, and designer stores. Its website can be found here.
  • MGM uses a diverse range of marketing strategies, including TV commercials, radio & podcasts, out-of-home ads, digital banner ads, print ads, interactive mobile ads, sponsored editorial, paid & organic social ads, and vehicle banners.

Loyalty Program

  • MGM's loyalty program is called M life Rewards. It offers members exclusive access to world-class offerings and valuable rewards. Members are able to earn tier credits by spending on accommodation, dining, spa experiences, entertainment, slots, and table games. The program also offers members exclusive access to M life Moments at MGM Resorts Destinations Nationwide.
  • MGM partners with other hotel loyalty programs, including World of Hyatt by Hyatt Hotels and Resorts, to tap into a larger customer base. It also partners with airline loyalty programs like Southwest Rapid Rewards by Southwest Airlines. Other brands it partners with include Royal Caribbean International, Cirque Du Soleil, and Celebrity Cruises.
  • The brand frequently hosts events and invites customers to sign up for the M life Rewards program. In 2018, it hosted a sign-up party for M life Rewards. The event was furnished with a lavish red-carpet. It allowed users to preview all M life Rewards properties and enjoy DJ entertainment.
  • MGM mainly uses its mobile app to promote its rewards program. The brand created the mobile app because it wanted more customers to engage with the M life Rewards program frequently.
  • To provide a seamless mobile experience, MGM recently revamped its mobile app. This improvement was also made to drive a massive increase in the loyalty program registration. The new mobile app portrays MGM Resorts as an umbrella brand, while simultaneously elucidating the full scope of its rewards program and fostering cross-selling between its properties, events, restaurants, and so on.
  • MGM has a website dedicated to its M life Rewards program. The website is crisp, clean, and digestible. It also portrays a bold use of photography. The combination of this engages users and makes them excited about the program.
  • MGM's loyalty program has won several awards including one for Best Promotion and another for Best Customer Service.

Caesars Palace

  • With 3,960 rooms, Caesars Palace is one of the largest hotels in the US. It is a luxury hotel and casino situated on the Las Vegas Strip. The hotel boasts of several celebrity-owned restaurants, seven swimming pools, and an upscale spa, among other amenities.
  • It was founded in 1966 as a themed resort. Just 50 years after its launch, it expanded from an "opulent 14-story hotel with 700 rooms to a small city with six towers, 4,000 rooms and a 636,000-square-foot shopping mall."
  • Its marketing strategies include sweepstakes; social media channels like Facebook, Twitter, and Instagram; partnerships with renowned companies like Salesforce; digital banners; event sponsorship; and its loyalty program.

Loyalty Program

  • Total Rewards is Caesars Palace loyalty program. In January 2019, the hotel rebranded its loyalty program to better connect its elevated standard and prestige with its global destinations. It is now called Caesars Rewards.
  • The program allows members to earn reward credits for gaming activity, dining, hotel expenses, and retail spending. It also has a Caesars Rewards VISA credit card that offers members the opportunity to earn additional credits. These credits can be redeemed for hotel amenities, gift cards, and casino free play.
  • Caesars promotes its loyalty program through its website, direct mail, its mobile app, email, social media, partnerships, and interactive slot machines. Caesars has an app for its Caesars Rewards loyalty program specifically. The app was redesigned recently to improve customer experience. Since its redesign, downloads of the app doubled in 12 months.
  • The brand partnered with two top rewards providers in the hospitality industry- Starwood Preferred Guest and Wyndham Rewards - to expand options for its customers and target more customers.
  • Caesars' uses data analytics to enhance guest personalization and improve customer satisfaction of its Total Rewards program. The company gathers all guest transactional data, such as their spending at its casino, golf course, and spa. The data "collected from guest spending is then used to analyze each guests’ personal characteristics and behavior to further tailor details to their interests" vis-Ă -vis its loyalty program.
  • On its website, the company highlights the main benefits of joining its rewards program, including the opportunity to earn credits at over 40 resorts and casinos. It also markets the Caesars Rewards app and mentions that the app now has a new-look and better design.
  • One thing Caesars does differently in promoting its rewards program is having social media pages specifically for this loyalty program. It has an Instagram, Facebook, and Twitter account for the Caesars Rewards Program. Across these social media platforms, it posts some of its members who have won money by leveraging the credits they earned. It also frequently emphasizes the benefits of joining the program.

RESEARCH STRATEGY

We based our ranking of the top hotels in the US by the number of rooms they have in the country. While The Wynn & Encore, Las Vegas has almost 5,000 rooms, making it the third largest hotel in the US, it just launched its loyalty program in November 2019. Seeing as it has been less than six months since the launch, little to nothing could be found on its communication and promotion strategies for the loyalty program. In addition, CityCenter and Mandalay Bay are other large hotels that should have been included in our list. However, these hotels are part of MGM Resorts and use the M life Rewards program that we already discussed.


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