Delivering great guest experience leads to loyalty. But while rewards systems, points and discounts can help, they aren’t the natural way to build guest loyalty.
At Experience Hotel we work with hundreds of hotels to help them with technology and tools to improve guest experience. We’ve worked with hotels for most of our professional lives and came to notice that hotel marketing works best when hotels deliver incredible service.
When we built Experience Hotel we did so because we saw a need on the market to improve the guest experience much much earlier than on arrival.
Guest experience begins right after booking and continues way after they’ve left the hotel.
We recently analysed over 100,000 hotel bookings to look at how guests travel, how they book, what they want and how that affects guest loyalty, the results were interesting.
With all that data we put together an infographic that you can download here. But we wanted to go over some of the information from the infographic to explain it in some detail.
Understanding the Guests
From the 108,000 reservations we analysed mainly to independent hotels or hotels of smaller chains in larger European cities, 51% travelled for leisure and 26% travelled for business.
What is interesting with the data is that of those 26% that travelled for business almost half of them booked using private email addresses (gmail, hotmail, yahoo etc). The chart has the exact figures.
The reason it’s interesting is that many hotels use the professional emails as a way to know the guest better and know if they are coming for business or not. In this case there is no way to predict what kind of guest is staying at the hotel.
What we also found was that 30% of the profiles in the hotel’s PMS lacked guest email addresses, which makes it quite difficult to communicate with them or even identify them on future reservations.
Understanding guests’ needs
As the hotels who work with Experience Hotel typically excel at tailoring guest experience based on their needs we had quite some data here and we wanted to understand what are the most common needs of guests arriving in European cities.
42% asked for restaurant recommendation before arriving in the hotel. So despite all the recommendations apps and systems that exist, guests still would like human recommendations from the hotel.
Almost 25% wanted instructions on how to get to the hotel, which again, despite Google Maps and a multitude of navigation applications out there, guests still prefer to hear it from the hotel.
In line with Booking.com’s predictions of trends for 2017, 18% wanted recommendations for local experiences which is something hotels shouldn’t ignore or leave up to Airbnb to deliver.
While there are a number of applications that help upsell services to guests, we kept things simple – and so did the clients. Most of the upsales are for Breakfast and Parking.
An important note on guest needs is that when offered the choice, almost 40% of hotel guests would like to have their room customized in some form or another. Something hotels should pay attention to as this is where they can excel over short term rentals.
Understanding guest behavior
There is a growing trend of cancellations pre-arrival for hotel guests. In many cases it is guests booking multiple hotels early and then cancelling last minute for the hotel they liked best. But to say this is all would be a generalization that wouldn’t help.
However we did notice some trends here, OTA bookings tend to have a much higher cancellation rate than direct bookings. Booking.com with the “free cancellation” being advertised on their page has up to 57% cancellation rate on the hotels we sampled. Expedia is less than half that with 26% and the website is almost half that again with 14%.
A very interesting fact we noticed is that cancellation rates tend to go down 30% when implementing a good pre-arrival email.
Understanding Guest Loyalty
As with any business, guest or customer loyalty is the holy grail of marketing. But we said above, it takes a lot more than just points system or a card to earn loyalty. We did a bit of digging into the numbers here and some interesting facts came up.
38% of the guests said they return regularly to the same city. That’s a huge number especially for European capitals that receive a lot of leisure tourism. It is also a huge opportunity to have them return to your hotel, if you deliver an excellent experience.
Of further note, is when we asked tens of thousands of business travellers (of which most had booked through their private email) if they were interested in getting negotiated corporate rates for their company, 26.8% replied yes. Again a huge opportunity for hotels to build corporate contracts that aren’t subject to OTA commissions.
Interestingly almost 10% of the guests reservations we analysed, booked at the hotel again after their first stay, and if that number can be matched to the 38% who said they regularly come to the hotel, this could again be more direct revenue for the hotel.
To deliver excellent service to guests, hotels need to understand their guests and communicate with them early. We recommend hotels begin the guest experience right after the guest booked and maintain communications with the guests until long after the guest has left – without spamming of course.
Building a great experience and delivering great guest experiences is, after all, what we’re here for as hoteliers.