Part 1: The Shift from Points to Instant Rewards & Milestones

The Limitations of Traditional Points-Based Programs

For years, points-based loyalty programs have been the industry standard. Guests accumulate points over time and redeem them for rewards once they've reached a threshold. While this method works for large brands with widespread appeal, it often fails to deliver the same level of engagement and satisfaction in small to mid-sized hotel groups. Why?

Delayed Gratification: Guests need to stay multiple times before seeing any benefit, which can feel unattainable for travelers who aren’t frequent visitors.
Complexity: Points-based systems can be confusing, with different rates of accumulation depending on booking channel, room type, or even seasonality.
Competition: Independent hotels are up against large brands with vast resources. A guest may prefer a Marriott points system simply because it's global, creating a steep uphill battle for smaller groups.

The Rise of Instant Rewards and Milestone Programs

Instant reward programs, on the other hand, offer immediate value and drive engagement from the very first interaction. Instead of waiting for a large accumulation of points, guests can earn rewards during their stay, or even at the moment of booking. This strategy creates an instant emotional connection and encourages repeat business.

Guest Experience Enhancement: Instant rewards like discounts on dining, room upgrades, or access to exclusive experiences can surprise and delight guests. It's an immediate reminder of why they should choose your hotel over a competitor.
Simplicity: Rewarding behavior immediately—whether booking directly, referring friends, or engaging with your hotel on social media—makes the system transparent and easy to understand.
Increased Ancillary Spend: When a guest receives an instant reward, they are more likely to spend additional money at your property, enhancing your revenue.

Milestones: A Balanced Approach

Milestone programs reward guests for reaching specific achievements, like their 5th, 10th, or 20th stay. Unlike points, which may seem abstract, these milestones are concrete moments guests can look forward to. Pairing instant rewards with milestones ensures both immediate engagement and long-term loyalty, without the frustrations of waiting to accumulate points.

Part 2: How to Implement a Successful Loyalty and Reward Strategy

Define Your Goals and Audience

Before implementing any loyalty strategy, it’s essential to clearly define your hotel group’s goals. Are you aiming to increase repeat bookings, encourage direct bookings, or boost ancillary revenue from guests?

Target Audience: Understand the needs and preferences of your ideal guest. Are they leisure travelers, business guests, or a mix of both? This will help shape the types of rewards and experiences that will appeal most.
Measuring Success: Whether you want to boost direct bookings by 20%, or increase repeat guests by 15%, set measurable goals that will guide your program’s success.

Choose the Right Technology Platform

The technology behind your loyalty program should be seamless and easy to use for both you and your guests. An ideal solution integrates with your hotel’s existing Property Management System (PMS) or Central Reservation System (CRS), enabling you to track guest interactions and offer real-time rewards.

Flexibility: Ensure the platform allows for customizations—whether you want to reward guests for staying during low-demand periods or offer bonuses for social media engagement.
Data Collection: Make sure the system captures valuable guest data. First-party data from loyalty programs is crucial for personalization, helping you tailor future offers and rewards to each guest’s preferences.

Incentivize Direct Bookings

One of the primary benefits of a well-structured loyalty program is the ability to incentivize direct bookings, helping you avoid hefty commissions from OTAs (Online Travel Agencies).

Offer Instant Rewards at Booking: Provide rewards like discounts or free amenities for guests who book directly through your website, reinforcing the value of bypassing third-party channels.
Personalized Experiences: Use data from previous stays to offer customized rewards at the booking stage, such as a room upgrade for a repeat business traveler or a spa discount for leisure guests.

Part 3: Maintaining and Evolving Your Loyalty Program

Keeping Guests Engaged Over Time

Launching a loyalty program is just the first step. To maintain engagement and drive repeat business, you need to continuously interact with your guests, offering new rewards and staying relevant in their travel planning.

Dynamic Rewards: Rotate and refresh rewards based on seasonality, local events, or new services at your hotel. This creates urgency for guests to return and take advantage of limited-time offers.
Guest Feedback Loop: Regularly collect guest feedback to understand which rewards are most appealing and where there may be room for improvement. Encourage feedback through surveys or reward incentivized reviews.

Personalized Loyalty Marketing

Leverage the first-party data collected through your loyalty program to offer personalized marketing. Segment guests by travel patterns, preferences, and spending habits to send targeted offers that feel unique.

Triggered Messaging: Set up automated emails or text messages triggered by specific guest actions, like completing a booking or reaching a milestone. For instance, a guest may receive a “Congrats on your 5th stay!” message with a complimentary room upgrade offer.
Loyalty-Driven Promotions: Offer exclusive promotions to loyalty members that aren’t available to the general public. This could be special rates, access to events, or early booking windows for high-demand periods.

Continuously Measure and Adjust

To ensure your loyalty and reward strategy remains effective, consistently track key performance indicators (KPIs) like repeat booking rates, direct bookings, and ancillary revenue. Adjust the program based on what’s working—and what’s not.

A/B Testing: Experiment with different rewards and offers to see what resonates most with your guests. Try offering a local experience reward in one instance and a room upgrade in another, and compare the results.
Analyze Milestone Effectiveness: Evaluate whether your milestone rewards are prompting the desired level of guest retention and loyalty. If certain milestones aren’t driving repeat visits, reconsider the reward or timing.

The Future of Guest Loyalty

Independent hotels and small groups need a fresh approach to guest loyalty. By shifting from traditional points programs to more flexible and engaging instant rewards and milestone strategies, you can cultivate deeper connections with guests and drive both short- and long-term revenue growth.

At Laasie, we believe that the future of loyalty lies in immediacy, personalization, and measurable success. Our platform allows hotel groups to offer compelling, instant rewards that keep guests coming back—no matter their size or market position.

Unlocking Guest Loyalty: Creating, Implementing, and Maintaining an Effective Reward Strategy for Independent Hotel Groups