Creating a loyalty program is an effective way for short-term rental businesses to stand out from the crowd. Acquiring a new customer costs 5 to 10 times more than retaining an existing one – so it only makes sense to put as much effort into hanging on to your returning guests as you can.
So why aren’t more businesses focusing on guest retention as a crucial step in their lifecycle marketing strategy?
Here are the types of loyalty programs for vacation rentals that you can start implementing to earn your guests’ devotion and keep them coming back.
What is a loyalty program and why should you create one?
Loyalty programs are reward schemes that offer benefits to returning customers – such as freebies, discounts, reward points and referral systems – to keep them coming back.
Hotels and airlines have been running loyalty programs for decades. Until recently, travellers who prefer alternative accommodation to hotels had to make do without elaborate reward schemes. However, vacation rental businesses are slowly starting to adopt loyalty programs and make them an integral part of their guest retention strategy.
It started with hotels moving into the vacation rental space. Wyndham expanded its loyalty program to its portfolio of vacation rentals in 2016. Marriot also started including their home-sharing business, Homes & Villas by Marriott International, in their immensely successful loyalty program.
The first vacation rental business to take the leap was property manager Stay Alfred, who has also introduced a pioneering rewards program – the first of its kind in the industry.
As Doug Truitt – Director of Distribution at Stay Alfred shared with us:
“The ‘Stay Alfred Rewards’, or the ‘Green Suitcase Society’, which is not unlike what you find in a hotel chain with repeated stays, lead to free nights with us. I think that’s a very valuable piece that has been missing in the vacation rental space. A lot of folks are saying ‘Well, I love staying in a vacation rental but I miss all my Marriott Rewards points…’. So, I think we’re really bridging the gap, I don’t think anybody else has actually successfully attempted that. We are fully launched with it and we’re getting a lot of great organic feedback from it without pushing too much.”
Now, it’s time for you to start exploring your options and creating your own loyalty program!
Loyalty Programs for vacation rentals and how to set them up
1. Travel credit cards
The easiest way for vacation rental businesses to introduce a loyalty program is to start accepting travel credit cards that allow cardholders to collect and redeem points for vacation rental stays.
Travel credit cards are extremely popular among budget travellers (especially in the US). Once they’ve collected enough miles or reward points, travellers can cash them in to pay for their next trip. Some of the most popular travel credit cards to use for booking vacation rentals are the Capital One Venture Rewards Credit Card, the Discover it Miles Card, the Chase Sapphire Preferred Card and the Bank of America Travel Rewards Credit Card.
The points collected through these credit cards can be spent on big vacation rental websites like Airbnb because payment services classify Airbnb bookings as travel purchases – the same way they classify hotel stays. FlipKey and Booking.com code under travel purchases too, while, for some reason, HomeAway and VRBO do not (which means that they’re not eligible for points, as of yet).
If you want to be able to accept travel credit cards as a property manager, make sure that your bookings are classified as travel purchases as opposed to real estate purchases. Once you’ve got your new credit card loyalty scheme going, travellers will be able to earn and redeem points when they book your property. If travellers can use their favourite credit cards to book with you, they are more likely to keep coming back. Remember, not many vacation rental businesses offer this option yet! This is your chance to get ahead of the game.
Are you ready to go one step further and create your own loyalty program from scratch? You can start by offering discounts to returning guests.
If you’re a fan of the simple and straightforward, just offer a discount on the price of the next booking (maybe even a free night!). It’s also a good idea to come up with unique discounts that reflect your brand and cater to the preferences of your guests. For example, if you’re managing a mountain chalet, you can offer discounts on passes at the nearby ski resort. Or, if your properties are chic urban apartments, you might want to strike up a partnership with a nearby restaurant and offer discounts on dinner.
Talk to your local providers and see what your options are.
Similarly to discounts, the best kinds of rewards are the ones that allow you to stay true to the theme of your property.
When a guest comes back, reward them with a free airport pick-up, a luxurious welcome basket, or free tours and activities in your area – think amusement park, winery or waterpark for the kids. You can offer all these extra services through guest experience apps like HelloHere and Wishbox.
Just like with discounts, the key to securing awesome rewards is to strike up partnerships with local providers. Don’t be shy, reach out to them and see what you can work out!
4. Referral programs
You can also reward your guests for recommending your property to their friends and family.
Referrals are one of the most powerful and valuable ways of getting bookings – and you can encourage them by offering special discounts or freebies to guests who spread the word about your property.
Make referral programs a part of your loyalty marketing by offering your guests gift certificates or cash in exchange for recommendations that turn into bookings.
How to promote your loyalty Programs for vacation rentals
By now, you’re probably convinced that loyalty programs should be a part of your guest retention efforts. But how do you go about promoting them?
First of all, you need to know what your guests value and what rewards would make them happy. The best way to find out is to just ask them. You can get them to fill out a survey while they’re staying at your property, or after they’ve checked out.
If you want to keep in touch with your guests post-stay, you’re going to need a PMS (Property Management system) or a CRM (Customer Relationship Management) system. These tools offer communication channels that can help you build a base of devoted guests through email marketing and other tactics. See a list of the PMSs out there, or opt for a CRM system like MailChimp.
Next, build a mailing list for the members of your loyalty program, come up with a strategy and send consistent emails, letting them know about discounts, rewards, and referral opportunities.
Another option is to enlist an app like HelloHere that sends push notifications to your guests to let them know about the discounts they could be missing out on.
You can also promote your loyalty program on your website, on social media and even on vacation rental websites.
Need tips on marketing, online distribution and the best software for vacation rentals? Speak with one of our specialists.