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More Luxury Hotels Should Offer Repeater Benefits to Returning Guests. We're not talking about frequent stay or loyalty programs for a brand, such as World of Hyatt or Marriott Bonvoy. We mean perks for returning to an individual hotel property.
Example of Repeater Perks at a Luxury Hotel
For example a luxury hotel in the Maldives that we've now reserved multiple times for clients currently offers these benefits to repeat guests who stay for five nights or more:
- One full bottle of Louis Roederer Champagne in the villa on arrival
- 1 hour spa treatment per person per villa at the spa (to be enjoyed with 48 hours of arrival)
- Afternoon tea served in Villa or at the Over Water Bar, once during the stay
- One complimentary wine tasting during guest stay
- One shoreline dinner at the resort's main restaurant during the guest's stay
- USD 150 resort credit per villa per stay (valid for all outlets with the exception of the Surf Shack & Dive Center)
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Value Added Perks Rather Than a Discount to Encourage Returning Guests
At first glance, the above repeater benefits may seem like a lot. Dining and spa experiences in the Maldives are costly, so the retail price of these repeater benefits exceeds $800. But luxury resort stays in the Maldives are also pricey, starting at ~$2000 + taxes per night during peak season at this particular resort. For a 5 night stay, then, the benefits are about 8% of the value of the stay before taxes for an entry level accommodation, and less than that for higher villa categories. As a rule of thumb, we don't typically see repeater benefits exceed 10% of the accommodation rate. And while we have seen a 10% rate discount at another property for repeat guests, we find the value added approach far more compelling. Repeat guests, after all, have already experienced the resort and have memories of it, so just reading about the spa treatment, wine tasting, and shoreline dinner can evoke images and memories of their previous stay and help create a desire to return.
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Returning Guests Tend to Spend More
Studies have shown that a minority of repeat customers tend to generate a significant part of a company's revenue. For example, one study of small businesses found that over 40% of a company's revenue was produced by just 8% of its customers. And for hotels, returning guests are more likely to upgrade to a higher suite category or spend more on dining, spa, and other experiences given their familiarity with the property.
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Attracting New Guests is Costly
Attracting new clients is more expensive, sometimes 5X or more costly than retaining an existing one. There are advertising and promotion costs, travel pro familiarization stays, and payouts to online travel agencies (OTAs). There's also the risk of attracting the wrong kind of guest, one whose taste, aesthetic or otherwise, doesn't match that of the hotel, one who is searching for any kind of flaw in order to try to negotiate a lower rate or upgrade, or who's determined to leave a scathing review.
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Word of Mouth From Returning Guests is Powerful
Consider what you pay more attention to: an ad or email from a hotel you've never heard of or a close friend, whose taste you trust, raving about his/her recent stay at a resort? Word of mouth endorsements are powerful, so it's no wonder that 92 percent of consumers state that they trust recommendations from friends and family above all other advertising. All the more reason to cultivate returning guests as brand ambassadors.
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We want to know: which luxury hotel in the world do you most want to return to?
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Updated: Top 10 Maldives Luxury Resort Offers 2023
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