Repeat guests are profitable and are a influential marketing vehicle
Hotels love frequent travelers because as repeat customers they have a significant impact on the success of their business. A repeat guest is someone who makes multiple visits over a certain period of time. The goal is to move people through the customer lifecycle, starting with catching someone’s attention, letting them know why your hotel is different and better, getting them to stay with you and converting them into loyal repeat guests.
On one side of the coin they an invaluable source of revenue and their loyalty serves as an indicator of guest satisfaction. As their relationship with the hotel grows, they became loyal advocates by recommending your property or brand to others.
On the other side of the coin, they can be amongst the most demanding guests. These travelers know exactly what they want and usually manage to effectively communicate their needs to hotel staff. As seasoned travelers, they also tend to be more forgiving when mistakes genuinely occur.
Before making that physical journey to your hotel, there’s another kind of journey that occurs, which virtually every guest embarks on. Called the ‘customer journey’ it traces the steps a person takes before deciding to book a hotel. In other words, the customer experience hospitality businesses offer their guests begins long before the guest gets to the property. This pre-arrival is the first of a series of touchpoints that can make or break the connection between the potential customer and the hotel.
The journey itself covers different phases: beginning with the wish or need to travel (awareness / interest), followed by research (price, location choice and other considerations) and then making the booking (purchase). Guests, who visit the destination often, will skip the many phases and make only the booking – provided the hotel took good care of them on during their previous stay/s.
Because a repeat guest skips a few stages in the customer journey, the cost of acquisition is much lower than that of capturing a booking from a new customer. The cost is even lower, when the guest is persuaded to book direct with the hotel because it saves on paying fees to OTAs’ for online bookings. Thus guest acquisition costs (GAC) are near zero. Hence, from a purely financial point, returning guests play a crucial role and are more valuable than one-time tourists who seldom or never return to the same destination.
Just as much as human resources people look closely at the attrition rate of staff, sales and marketing people need to identify why some regular guests end their relationship with the hotel. In some cases it could be the completion of a project which understandably, no longer necessitates any further visits. Before you assume you have a retention problem, consider whether you have an acquisition problem instead. Hotels often attract the wrong kinds of guests. One sees this in hotels that promote price heavily up front. They attract deal seekers who then leave quickly when they find a better deal with another hotel.
The bottom line: keeping the right repeat guest is valuable.
Shafeek Wahab - Editor, Hospitality Sri Lanka, Consultant, Customer Service Trainer and Ex-Hotelier
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