Why Your Hotel Should Keep Guest Loyalty Scores

The hotel industry today is vibrant yet tumultuous, reshaped by digital disruption. Online travel agencies and new entrants like Airbnb have inserted themselves between hotels and guests, and consumers now have more choices than ever. In this environment, guest loyalty remains a key differentiator.

Loyalty programs provide a framework to nurture guest relationships by offering recognition, perks, and redemption options. Equally important, they create guest profiles and transaction histories that yield insights for personalized interactions—essential in today’s hospitality landscape.

What is Customer Loyalty?

Customer loyalty in hotels is a guest’s commitment to one property or brand over other accommodation choices. It includes both emotional attachment and repeat purchase behavior.

• Average customer loyalty rates across industries are around 20%, yet this smaller group of loyal customers can contribute up to 65% of total sales revenue.
• Studies show 9 out of 10 customers are likely to make repeat purchases with brands that provide outstanding customer service.
• Between 2020 and 2021, leisure travelers who were loyalty members of the hotel they stayed with increased from 43% to 47%; business traveler loyalty remained around 64%.

Hotels can capitalize on this trend by rethinking tier structures and redemption opportunities to better engage leisure travelers.

The Importance of Customer Loyalty

Loyalty programs generate significant revenue for hotels. According to Skift Research, loyalty members contribute between 30% and 60% of room revenue and often pay higher average daily rates (ADR) than non-members.

Key reasons loyal guests matter:

1. Increased Spending
   Repeat guests typically spend more on services and amenities. For retail benchmarks, repeat customers can be a small portion of the base yet contribute a large share of revenue.
2. Word-of-Mouth Marketing
   Loyal guests often become brand advocates. Nielsen reports that 92% of consumers trust word-of-mouth recommendations more than advertising.
3. Enhanced Guest Satisfaction
   Personalizing experiences based on guest preferences increases satisfaction. Forbes notes that a 5% increase in customer retention can boost profitability by 25% to 95%.

What are the Three Rs of Customer Loyalty?

The “Three Rs” commonly used to describe key elements of customer loyalty are:

1. Relationship — Build meaningful relationships beyond transactions. Relying only on discounts commoditizes the brand and encourages price competition. True loyalty comes from engagement and trust.
2. Relevance — Tailor communications and offers to individual interests and needs. Relevance helps your messages break through the daily marketing noise.
3. Reward — Show appreciation through thoughtful recognition and benefits. Personalized rewards strengthen the guest-brand bond.

Why Should You Measure Customer Loyalty?

Measuring loyalty helps hotels understand how well they retain guests and encourage repeat business. Loyal guests are more likely to:

• Return for future stays
• Purchase additional products and services
• Book directly (reducing OTA dependency)
• Provide positive reviews and referrals
• Engage in two-way communication that builds long-term relationships

What Customer Loyalty Metrics Should You Track?

Track a combination of behavioral and sentiment metrics to get a full picture of loyalty.

Repeat Visit Rate

The percentage of customers who make multiple purchases or stays within a timeframe. Returning visitors are typically more likely to convert than new visitors.
Formula: Repeat Purchase Rate = (Number of customers with repeat purchases) / (Total customers in timeframe)

Upsell Rate

Measures how often customers purchase additional or higher-value products over time. The more dissimilar and higher-value the additional purchases, the stronger the loyalty signal.

Customer Lifetime Value (CLV)

The expected profit from a customer over the entire relationship.
Basic approach: CLV ≈ Average sale value × Average number of transactions × Average customer retention period × Profit margin

Customer Retention Rate (CRR)

The proportion of customers who remain with the business over a period.
Formula: CRR = ((E − N) / S) × 100

• E = Customers at the end of the period
• N = Newly acquired customers during the period
• S = Customers at the start of the period

Customer Satisfaction Score (CSAT)

A short-term metric measuring satisfaction for specific interactions, products, or services. CSAT is usually expressed as a percentage: (Sum of scores / Sum of maximum possible scores) × 100

Customer Loyalty Index (CLI)

A compound metric that asks customers a set of questions (e.g., intent to repurchase, likelihood to recommend, and openness to upsells). Regular surveys over time make CLI a useful indicator of loyalty trends, though it measures intent more than behavior.

How to Improve Customer Loyalty Scores

Improving loyalty requires a strategy centered on guest needs and consistent execution.

• Provide excellent, proactive customer service.
• Offer personalized discounts, promotions, and experiences.
• Actively gather, analyze, and respond to guest feedback.

Loyalty Programs

Loyalty programs are critical: the 2021 Loyalty Barometer Report found that over 80% of customers seek a relationship with brands. Well-designed programs recognize and reward frequent guests and strengthen their bond with the hotel.

Better Customer Service

Service quality matters to a large majority of guests. Proactively addressing concerns and resolving issues quickly increases satisfaction and retention.

Improved Personalization

Around 87% of customers consider personalization at least somewhat important. Understanding VIP preferences enables targeted marketing and tailored experiences that drive repeat business and higher spend.

Increase Guest Loyalty Scores With HelloShift

Focusing on guest loyalty scores supports long-term success. To build a loyal customer base you need the right tools to deliver timely, personalized service. HelloShift is a platform designed to help hotels improve guest experience and loyalty by enabling real-time communication and staff collaboration.

HelloShift customers report 30% fewer guest complaints and 2x faster issue resolution. Our AI handles routine guest requests, digital guidebooks reduce front desk calls by 40%, and preventive maintenance checklists prevent costly breakdowns.

Ready to transform your hotel? Get started in 5 minutes with our free trial, or schedule a demo to see HelloShift in action at a property like yours.