Member Rates Disrupted: How to Make Guests Feel Valued While Boosting Your Bottom Line
Ever wondered if there's a way to make hotel guests feel like royalty without your revenue team staging a rebellion? Welcome to the world of "new member rate" strategies, where we sprinkle a little bit of financial wizardry to create win-win scenarios for both hotels and their beloved guests.
The Classic Dilemma: Discount or Perish?
Traditionally, hotels have tried to woo guests with hefty discounts. It’s a noble effort, but let’s face it: slashing 20% off your room rate is like giving away the crown jewels. Sure, it attracts attention, but at what cost? Your margins get thinner, and your revenue takes a hit. But what if we told you there’s a better way? A way where you can keep more of your revenue and still have guests singing your praises?
Enter the Member Rate + Instant Reward Strategy
Here’s the secret sauce: instead of offering a 20% off member rate, offer a 10% off member rate with a high perceived value instant reward, like a $25 local experience that costs the hotel only $2.50. The result? You retain more revenue from the reservation, and the guest feels like they just hit the jackpot.
Imagine a guest named Linda, an avid traveler. She’s shopping around for a hotel and sees two options. Hotel A offers a 20% discount, and Hotel B (that’s you!) offers a 10% discount plus a $25 credit to a local experience. Linda picks Hotel B, feeling like she’s gotten a fantastic deal, while you smile knowing you've kept more revenue in the till.
Why This Works: The Psychology of Value
The beauty of this strategy lies in perceived value. Guests love instant rewards because they feel like they’re getting something extra, something special. A instant reward or a digital voucher is tangible, immediate, and gratifying. It’s not just a discount; it’s a little gift that says, “We value you.”
From the hotel's perspective, the actual cost of these rewards is significantly lower than the face value, meaning you’re not giving away the farm to keep your guests happy.
Aligning with Direct Booking Strategies
This approach aligns perfectly with direct booking strategies. When guests book directly through your website to access these exclusive member rates and rewards, you sidestep the hefty commissions charged by Online Travel Agencies (OTAs). This means higher-margin reservations and better control over the guest experience.
Impact Across Marketing Funnels
Let’s dive into the ripple effects this strategy can have across your marketing efforts:
Higher Digital Marketing ROI: Incorporating the member rate + instant reward into your digital ads can significantly improve your click-through and conversion rates. Guests are more likely to click on an ad promising an exciting reward rather than a simple discount.
Higher Conversions within Meta: Meta search channels, where hotels compete directly on price, become a battleground for creativity. The promise of an instant reward can set you apart from competitors who are simply slashing prices.
Increased Loyalty Member Enrollments: Offering attractive member rates with instant rewards is a compelling reason for guests to sign up for your loyalty program. More members mean more repeat bookings and a more robust customer database for targeted marketing.
The Bottom Line: More Revenue, Happier Guests
By leveraging the member rate + instant reward strategy, hotels can retain more revenue while still offering something enticing to guests. It’s a smarter way to discount, ensuring that both the guest and the hotel come out ahead.
So, next time you're pondering how to attract more guests without breaking the bank, remember: a little bit of creativity and a touch of instant gratification can go a long way. Offer a member rate with an instant reward and watch your occupancy rates—and guest satisfaction—soar.
And remember, in the hotel business, keeping everyone happy (including your revenue team) is the ultimate luxury.