Independent Loyalty Programs for Hotels

• Loyalty Programs for Independents

How is The Guestbook different from programs like iPrefer and Stash?

Before signing up with an independent loyalty program it’s important for hotels to reflect on why branded loyalty programs like Marriott Bonvoy and Hilton HHonors add value.  These types of loyalty programs incentivize guests to book with a brand by offering experiential and monetary incentives. Experiential incentives include things like room upgrades, WiFi and late checkout which sway frequent travelers into booking via a loyalty program because they actually get better treatment than the average guest. Monetary incentives enable loyalty program members to experience higher property tiers which also can drive loyalty.  For example, a frequent Marriott Courtyard business traveller can build up points and use them towards a stay at W Hotels where they ordinarily wouldn’t have stayed. By staying at a higher tier property within the network that guest now has a haloed perception of the Marriott brand as a whole. Circa 2010, independent hotels took note of the massive growth in branded loyalty programs and banded together via programs like iPrefer (by Preferred Hotels & Resorts) and Stash Hotel Rewards. An April 2018 study by Oracle Hospitality (study here) highlights the dynamic that helped such programs grow.  Namely, there is a discrepancy between hotel perceptions of loyalty programs and the reality of such programs.  According to the study, hotel managers believe that 61% of guests sign-up for loyalty programs while in reality only 24% actually do.  Similarly, hotels perceive that 54% of guests will find offers relevant while in reality only 22% of guests believe that offers made by loyalty programs are relevant.   Revinate summarizes data from Oracle's loyalty study   Just because hotels overestimate the value of loyalty programs doesn’t mean that they don’t add value. Ultimately even small volumes of incremental bookings can still deliver a high ROI so independent hotels should still consider joining an independent loyalty program but should do so with realistic expectations. Independent loyalty programs that try to mimic branded programs rarely work.  Smart hoteliers know that points are mostly irrelevant when it comes to the world of independents since booking with another property in the network has no impact on loyalty for your own property.  The landing page for Destination Hotels & Resorts’ Destination Delivers program is a testament to the death of points for independent hotels: "This unique loyalty club is filled with perks. Not points." ~ Destination Hotels & Resorts A 2019 Revinate study shows that groups with more than 50 hotels can sometimes benefit from pursuing points based programs while smaller groups (under 50 properties) rarely benefit from such programs. When loyalty members receive points towards a program like Marriott Bonvoy their loyalty is building towards Marriott corporate rather than towards an individual property or sub-brand.  The problem with what we call ‘independent loyalty 1.0’ (e.g. iPrefer and Stash Rewards) is the misconception that loyalty is actually being built towards a specific property. Where programs such as iPrefer and Stash Rewards are still operating dated points based system models, Guestbook Rewards is a new kind of loyalty program that is more in touch with how today’s traveller behaves and books.  It's worth noting that Preferred Hotels & Resorts has sales infrastructure and relationships with travel advisors that bring material business for it's portfolio.  The firm also provides cost purchasing benefits so while the iPrefer value prop is in our opinion relatively weak there are other facets of the program which are definitely attractive for independent hotels. Guestbook Rewards understands that driving true guest loyalty to independent properties by giving points to spend at other properties is a near impossible feat. As a result, the Company has positioned itself as a way to increase conversion on hotel websites via offers and cashback.   Guests choose between three options: 5% cash back, a 5% charitable donation or 15% trip cash that can be used within The Guestbook’s network of ~700 hotels.  By offering cashback through a 3rd party, hotel clients are able to circumvent rate parity clauses with OTAs and create their own version of a private offer program like many of the brands have today and leverage exclusive loyalty network pricing to bring in more direct bookings. Independent hotels should explore the Guestbook because they want to incentivize direct bookings without breaking parity, not because they expect material bookings from The Guestbook’s loyalty program member base.  While expectations should be modest the Company now offers a "Guestbook Guarantee” of fully offsetting its fees with new inbound business.  To their credit, The Guestbook recognized this and developed a Chrome Plugin called Gopher which helps internet browsers find the best hotel deals by scanning hotel websites in real time. According to the Google Chrome store, the Gopher plugin has ~3,600 users so it’s unlikely to drive material volume for clients today but has the potential to solve the problem and is a clear demonstration that The Guestbook has a better pulse on technology and internet behavior trends than most of its competitors.  The Guestbook claims that it also has a similar number of users in the Safari App store but Apple doesn't publicize figures. Gopher has taken queue from a company called Honey which allows shoppers to check prices while shopping ecommerce websites. While the Gopher strategy doesn’t seem to have paid off yet for The Guestbook, the Honey plugin has grown to 10M+ users which is a testament to the larger opportunity around online shopper price checking if the team can figure out the right growth strategy over the medium to long term. Independent hotels that are looking to increase direct bookings can benefit from joining a program like The Guestbook but benefits can vary property by property so it’s important for hoteliers to read authentic peer reviews and request unmoderated referrals to properly evaluate the program. Read Guestbook reviews Request Guestbook references Independent hotels should think of The Guestbook’s program as a substitute to a direct booking platform like Stay Wanderful which also offer rewards for booking direct but can be used in tandem with platforms like Triptease. Where The Guestbook has a narrow focus on facilitating offers, platforms like Triptease have a more comprehensive and data driven website conversion optimization approach.  Stay Wanderful sits somewhere in the middle. We sat down with The Guestbook’s Dev Dugal to get his take on where independent loyalty has been and where it’s going.   Dev brings an interesting perspective to the discussion having previously owned his own hospitality business and also having worked in several mid sized hotel organizations before making the leap into hotel software and technology.  Dev advanced quickly in his career by leveraging a unique combination of interpersonal skills and technical adaptability. As a hotelier, Dev was always a technology maven who constantly sought to implement new technologies and marketing strategies for his hotels.  His story provides a roadmap for competitive hotel marketers seeking to beat out the compset and also for hoteliers with aspirations to leverage their hospitality ski