Guest Loyalty: A Challenge for Independent Hotels
Do you have clear differentiation in your value proposition?
By S. Lakshmi Narasimhan Founder, Ignite Insight LLC | September 29, 2019
The Loyalty Factor
Businesses worldwide tend to crave loyalty in customers. This is not merely for brag rights but is also a sound strategy from many points of view. To begin with, customer retention which is the other term for loyalty allows businesses to cut marketing costs. This is because the customer who returns has already bought into the value proposition of the business. They are sold so to say. Secondly, loyalty is a great fulcrum in bringing in more customers into the fold through referrals.
Hotel businesses are no different. Loyalty is a sought after attribute by hotels too in their guests. Loyalty as a factor is however not entirely applicable to all hotel business types in equal measure. Why so?
Chain Vs Independent Hotels
Hotel businesses can broadly be divided into group or chain hotels and independent hotels. Group or Chain hotels are often represented by a big, visible brand under whose umbrella the constituent hotels operate. Chain hotels have a major advantage over single independent hotel undertakings - they can offer attractive deals and value to entice the guest to come back to their various hotels. Variety is on offer as part of the brand and it is powerful. Even if the prospective customer does not find a particular hotel property in a given location suitable they can be offered similar ones within the group. This allows chains to retain customers in their fold.
Single, independent hotels have an uphill task on their hands. To begin with, they do not command the investment budgets or marketing muscle that chains can boast of. They are often small sized boutique hotels offering a differentiated value proposition. They have no choice. With the constraints they operate under, their core message has to be sharp. But resources are not their only crunch factor. Without the ability to offer different hotel properties to a prospective customer, they often suffer in the loyalty arena. Guests are likely to return to big brand chain hotels with multiple offerings for a given location. So how do these independent hotels battle the loyalty challenge?