Industry Update
Opinion Article15 April 2019

Why Retaining Current Guests Is More Cost-Effective Than Attracting New Ones

By Kate Hayward, Professional Marketer and Writer

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While some top economic experts extol low unemployment rates and increased executive compensation as indicators of overall market health, those who have studied macroeconomics over decades fear that the current apparent boom will lead to a devastating crash. Business leaders have long preached that retaining repeat customers costs far less than attracting new ones, particularly in belt-tightening years.


The hospitality industry proves no exception to the rule that customer retention drives higher profits. In anticipation of economic contraction, hoteliers should take extra measures to retain their most reliable regulars. During periods of recession, few possess the financial means to schedule new travel, but those traditionally returning to the same destinations year after year will revisit properties offering the ultimate getaway experience.

  • What Keeps Frequent Fliers Coming Back?

Many hoteliers offer reward points as their sole means of retaining repeat customers. However, few frequent travelers cite discounts as the reason they return to a property again and again.

Rather, both business and recreational travelers value unique hotel experiences over saving 10 or 20 percent on their stay. Creating a feeling of luxury by offering amenities unavailable at rival establishments drives repeat business.

Offer a rewards program that honors repeat guests with value-added perks in lieu of price markdowns. Properties with spa amenities may offer frequent travelers free admission to the fitness facility on return stays. Throwing in additional bonuses, such as a free mani-pedi to mark a customers' third, fifth or 10th visit, likewise delights travelers.

Properties lacking luxury amenities can partner with local businesses to offer specials mutually beneficial to both entities. Partnering with area restaurants makes sense and increases revenue and repeat business for both. Additionally, properties located near popular tourist attractions can offer free or discounted excursions to guests — think mule rides for Grand Canyon explorers or one free child admission ticket to a nearby theme park.

  • Cost-Efficient Ways to Improve the Guest Experience

Hoteliers wishing to grow repeat business need not expend wads of cash to install marble bath fixtures in all rooms or add pricey private haciendas poolside. Cost-effective ideas for adding property value on the cheap abound.

One way that savvy hotel owners can increase the value guests perceive includes adding staff to cater to common visitor headaches. Few business travelers enjoy schlepping heavy luggage from place to place, so adding bellhop service gives frequent fliers relief for their aching backs. Likewise, valet services save guests the hassle of finding a parking spot, and as professionals providing these amenities rely primarily on tips for their income, the overhead for additional salaries remains relatively small.

Another idea for offering exceptional value includes partnering with local service providers to lead fitness classes or provide courier service from local stores and restaurants. Licensed professionals in the exercise industry often collect an entry fee from each participant, meaning hotel managers need only supply a safe space for yoga and kickboxing. While many urban destinations provide food delivery via GrubHub or similar apps, some guests inevitably forget necessary items like phone chargers, and having such items delivered or available on-site saves guests from searching for stores in unfamiliar locales.

  • Upgrading During Crunch Time?

Frequently, hoteliers put off upgrading their properties during periods of economic recession. While some improvements can certainly wait until more favorable times, delaying others can leave guests disappointed with their stay.

Torn wallpaper, flat pillows, ugly, patterned bedspreads and dismal wall art leaves guests feeling like they've checked into a property managed by an overly ambitious slumlord. While replacing decor more properly suited for the disco era does cost a bit, simple improvements like replacing gaudy floral bedding with cozy, solid-colored comforters projects a more upscale feel valued by frequent travelers.

Hoteliers should never skimp on guest safety — even during an economic pinch — lest they face potential lawsuits, so continue regular room inspections to uncover any hazards and repair them immediately. Lodging houses with pools should likewise comply with all local ordinances regarding fencing and should require a guest card to enter the swimming area.

Look for little ways to improve visitor perception of the property value. Simple acts, such as partnering with local artists to create engaging guestroom wall hangings, adds a luxurious touch without severely impacting hotels' bottom lines.

  • Planning for Long-Term Hotel Success

Long-term success in the hospitality sector requires increasing perceived value while minimizing costs. By creating a memorable experience for guests, hotel owners can enjoy high booking rates and smooth sailing through even the roughest economic waters.

Disclaimer: This post is sponsored by PSECU, a Pennsylvania-based credit union.

Kate Hayward

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    Kate Hayward
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