How to… attract guest reservations from loyalty schemes
Hotels could benefit significantly from reward scheme bookings because they don't compete with their existing distribution channels and offer higher-value guests, Sam Turner explains
Did you know that there is around £6b of unspent loyalty scheme points sitting on the UK's top 10 reward cards? Imagine if some of that could be spent on your hotel.
We all know the most famous cards, such as Nectar, Boots Advantage and Tesco Clubcard. But beyond the top 10 cards there are thousands of programmes, ranging from credit card schemes and air miles points right through to employer benefits schemes, where employees get discounts on products or vouchers as part of their pay or for a Christmas bonus.
But why should you start prioritising guest bookings from this channel? A guest is a guest, after all? But there are several reasons (see panel) to consider reward scheme booking.
Top reasons to consider reward scheme booking
1 Bear in mind that reward scheme bookings don't compete with your dotcom or existing online travel agency partner. Rather, these are complementary bookings from a channel that has no overlap with any other sales source. Someone purchasing via these platforms is generally not considering other alternative routes to purchase. And if you work with overseas schemes, they can give you non-domestic bookings too.
2 Bookings via such platforms are not so sensitive about price, which means higher yields for your hotel. Why is that? They are not booking in pounds, but instead in 'points' - in an environment where one point doesn't always equal one pound - thus making the conversion and association with hard cash value difficult. Additionally, often guests simply wish to spend their points before they expire, and people in a hurry are not so concerned by value. Furthermore, the choice of hotels is normally much more limited, meaning you have much less competition.
3 Our research shows that bookings made via points and loyalty schemes can deliver higher-value guests when compared to the online travel agency channel or even dotcom. Such guests book further in advance, cancel less, frequently stay for longer and spend more once in the hotel.
4 Like any distribution channel, you need to dedicate time and resources to do this properly. But you don't need to be a big chain, or even have multiple properties - at its most simple, you can contact the big scheme providers and start from there.
5 If dealing with multiple providers is too tricky, an easier alternative is to work with a business-to-business distribution partner, such as a bedbank or channel manager that offers access to many points' redemption, loyalty and employee benefits schemes. As mentioned before, there are tens of thousands of points schemes in the UK alone and perhaps millions across the globe - so you are never going to come close to dealing with them all. Not only should such a bedbank or channel manager partner be able to negotiate the best deal on your behalf, they should also have the technology in place to implement this.
Sam Turner is director of wholesale sales and sourcing at Hotelbeds
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