Measuring the Value of Guest Loyalty: Radisson Hotel Group
In March 2018, the hotel company formerly known as Carlson Rezidor launched a new brand identity: Radisson Hotel Group. The company operates eight brands ranging from economy to luxury, with a total of 1,423 hotels in operation or under development in 115 countries.
At the same time, the company also enhanced and renamed its loyalty program to Radisson Rewards, with exclusive guest loyalty membership benefits that include member-only rates, room upgrades, early check-in/late check-out, and points towards free nights. This is a real game-changer. There’s now a bigger emphasis on the Radisson name: it creates much greater awareness to have the company name associated with the brands.
In ReviewPro’s webinar on brand loyalty, Teresa Comparato, Senior Director & Head of Loyalty, EMEA at Radisson Hotel Group, shared how her company takes a data-driven approach to managing its guest loyalty program.
“Essentially, when it comes to growing our revenues through our loyalty program our priorities include direct bookings on our website and through meetings and events offerings”, said Comparato. “I’m sure that doesn’t come to surprise to anyone.”
“The basic principle behind our loyalty program is that our guests want simplicity,” she said. “Whether it’s managing loyalty points, receiving recognition during their stay, booking a hotel online, or organizing a meeting, guests would rather be able to see what we offer across all our hotels and then choose the brand that’s right for them.”
Why Guest Loyalty Matters
“Appreciating and rewarding loyalty – in any shape, size or format – has always been our priority,” said Comparato.
She pointed out three main reasons why loyalty matters:
1. Our members enjoy a better experience. Member NPS scores are on average 14% higher than non-member scores.
2. Our hotels generate more value. Member folios are on average 24% higher than non-member folios.
3. Our hotels get a return on their investment. This translates to U.S. $18 in revenue for every dollar invested in loyalty, an important message for our owners and operators.
How Important Is Recognition?
“Recognition is a foundational element in the in-hotel member experience”, said Comparato. “We conducted a survey of several thousand Radisson Rewards members and asked them about their in-hotel experiences and views. When we asked, “As a hotel loyalty member, how important is it for you to feel recognized for your loyalty during your hotel stay?”, 97% of them said that they want to be recognized as the important guests that they are.”
What Does Recognition Really Mean?
Comparato emphasized the importance of staff members sincerely recognizing guests at check-in as a valued loyalty member each and every time. “In our recent member survey, we asked, “What made you feel recognized when you stayed with us?” Not surprisingly, expressing appreciation for a member’s loyalty with a “thank you” at check-in is shown as very important.”
But recognition is broader than that, she explained. “It is also shown when delivering the other program benefits and can include “surprise and delight” extras to make members’ stays easier and special. It shows that we know our customers and appreciate their business. You can really own that in the hotel experience. Our loyalty program enables this because we collect so much information on our guests.”
Calculating the Value of Loyalty
Comparato shared some compelling evidence that soft benefits can turn into hard dollars. “We joined recent ReviewPro data with member revenue history,” she said. “It shows that members who feel recognized stay with us considerably more often than those who don’t, and they contribute materially more revenue to our hotels.” That translates to 39% more stays and 35% more revenue, she said.
Tips for Improving Guest Loyalty
In closing, Comparato shared four key tips for improving loyalty:
• Improve hotel benefit delivery and member recognition by providing hotels with training and tools that are innovative and globally consistent.
• Develop a “scorecard” to identify and track key hotel performance metrics combined with in-hotel member engagement.
• Arm key high-level constituents with more consistent reporting to increase visibility of hotel performance and accountability at all levels.
• Create a process for coaching underperforming hotels and recognizing top performing hotels