There is a new era of innovation and personalization in the hospitality industry, which is essential not only for guest satisfaction but also for the growth and sustainability of the hotel business.

The holiday travel season is in full swing—45 percent of Americans say they are more likely to stay in a hotel this holiday season than they were last year. In order to stay relevant and appeal to this influx of travelers, hoteliers need to leverage every tool at their disposal.

One such tool is the strategic application of hotel loyalty programs. These programs, especially critical during high-traffic periods like the holiday season, have evolved from simple point-based systems to complex applications that significantly enhance guest experiences and drive substantial revenue. Here are some tips on how to make the most out of your hotel loyalty program this year.

Focusing Beyond Points and Discounts

The landscape of hotel loyalty programs has undergone a radical transformation. No longer are these programs just about accumulating points or securing discounts. Today, they represent a sophisticated and integral part of the guest experience. This evolution is characterized by the introduction of bespoke rewards, meticulously tailored to resonate with each guest’s unique preferences, thereby elevating their overall experience.

At the heart of this transformation is the understanding that modern travelers seek experiences that go beyond the ordinary. This shift has led hotels to rethink their loyalty strategies, focusing on creating memorable experiences that reflect the unique character of their location and services. For example, as a promotion available only for rewards members, a hotel in a city known for its rich history might offer a personalized guided tour of hidden historical gems, allowing guests to delve deeper into the local culture.

In today’s digital landscape, hotels have a powerful tool at their disposal to boost revenue through loyalty programs: the impact of shared experiences on social media. A staggering 75 percent of leisure travelers rely on social media to make travel decisions. When hotels offer personalized experiences that guests find worth sharing online, these guests effectively become brand ambassadors. This not only extends the reach of the hotel’s marketing but also enhances the perceived value of the loyalty program. By incentivizing guests to share their unique experiences, hotels can leverage these organic endorsements to attract a wider audience, thereby increasing both revenue and customer loyalty.

Tapping Into Personalization and Data Analytics

Personalization, powered by data analytics, is at the heart of modern hospitality strategies. This encompasses not just basic demographic information but extends to preferences, past behaviors and even subtle nuances picked up during previous stays. For instance, data can reveal if a guest prefers a higher floor for its panoramic views or is eager to take advantage of upcharge opportunities. By understanding guest behavior patterns through data analytics, hotels can create highly targeted offers through their loyalty programs, whether it be tailored package deals, special promotions for repeat guests or personalized incentives for longer stays.

The integration of AI and predictive analytics in the hospitality industry is also transforming guest interactions, with a direct impact on loyalty programs. These technologies empower hotels to anticipate guest needs and preferences, often before the guests themselves are aware. For instance, predictive analytics can ascertain a guest’s propensity to choose a room upgrade or extend their stay. By offering personalized incentives based on predicted preferences, hotels can encourage guests to engage more deeply with their loyalty program. This fosters greater customer loyalty and opens up new revenue streams, as guests are more likely to opt for premium services that feel tailor-made for them.

Expanding Horizons with Ancillary Revenue Streams

Contemporary hotel loyalty programs are pivotal in unlocking myriad ancillary revenue streams by integrating rewards with on-site facilities. For example, a hotel with a renowned gourmet restaurant can offer loyalty program members exclusive dining experiences, such as a chef’s table event or a themed dinner night, adding a layer of exclusivity and appeal. Similarly, spa services can be tailored to guest preferences, offering customized wellness packages or unique treatments exclusive to loyalty members, thus enhancing the perceived value of staying at and engaging with the hotel.

Another significant aspect of expanding ancillary revenue is forming strategic partnerships with external travel-related services. Collaborations with airlines, car rental agencies or local attractions can create a comprehensive ecosystem of rewards. Loyalty program members could earn points when booking flights with a partner airline or receive special rates and perks with a car rental service. These partnerships extend the loyalty program’s reach and influence, encouraging guests to utilize these services in conjunction with their hotel stay, thereby generating revenue beyond the direct hotel booking.

Prioritizing Mobile Apps and IoT Technologies

A robust, cloud-based technological infrastructure is crucial for the success of any modern loyalty program. Mobile technology, for example, has revolutionized the way guests interact with hotel services. Dedicated mobile apps for loyalty programs offer guests a convenient platform to check their points, redeem rewards and access personalized offers.

Incorporating secure and efficient payment systems is another aspect of modern loyalty programs. These systems must not only ensure the security of transactions but also offer flexibility and convenience. For instance, integrating contactless payments or mobile wallet options enhances the guest experience, aligning with the expectations of tech-savvy travelers.

IoT has also found its place in enhancing the hotel guest experience. Smart room features, such as automated lighting, climate control and entertainment systems, can be tailored to guest preferences, recorded in their loyalty program profiles. This personalization extends to the overall hotel environment, with IoT devices enabling a seamless and customized stay, from personalized welcome messages on in-room screens to automated check-in and checkout processes.

The Road Ahead with Loyalty Programs

The future of hotel loyalty programs is about creating a holistic experience for the guest. These programs must be seen as strategic assets that significantly contribute to a hotel’s revenue and brand reputation. By focusing on personalized experiences and embracing technological advancements, hotels can create loyalty programs that not only resonate with guests but also foster long-term relationships. This approach requires a shift in mindset—from viewing loyalty programs as marketing tools to seeing them as integral parts of the guest experience and overall hospitality business model.

Brittain Brown is president of Givex.