Increase customer loyalty with hotel subscription programs

Last weekend, I visited our must-go long weekend destination, Pondicherry. Traveling with our pet Coco means we always choose a pet-friendly resort that caters to all our needs.

From the pup-friendly pool to the spacious rooms and lush green farm, this was our favorite place to stay!

The staff also gave Coco an extra belly rub, which was the icing on the cake. 🐶

This was our 6th stay and upon checking in the manager mentioned that they were offering a new subscription model that would save me thousands of dollars. This piqued my interest as it was a completely new concept to me.

After doing some digging into Coco, I can tell you that it is going to be a game changer for the hospitality industry!

So, let me take a deeper dive into what the hotel subscription model is and how you can make the most of it as an accommodation provider.

Understanding the subscription model

The subscription model is basically a business strategy where customers pay a recurring fee, usually monthly or annually, to use a product or service. This model has become popular across industries and has revolutionized the way businesses interact with their customers and generate revenue.

The core focus of the subscription model is Build long-term relationships with customersRather than a one-time transaction, it encourages ongoing engagement by providing ongoing value. For example, streaming services like Netflix and Spotify have transformed entertainment consumption by offering unlimited access to their vast libraries for a monthly fee. Similarly, Buckbos and Dollar Shave Club Build a loyal customer base by delivering curated products to your customers’ doorsteps on a regular basis.

In the hotel industry, a subscription model means offering guests a package where they pay a fixed amount for a certain number of nights or services over a specified period. This might include monthly stays at a particular hotel chain or exclusive amenities and experiences.

For example, inspirationLuxury Vacation Rentals offers a unique subscription model that allows its members to book unlimited stays at five-star hotels, cruises, and vacation rentals. With subscription prices starting at $2,500, members can save money on nightly rates, enjoy new experiences, and stay anywhere at no additional cost.

SakuAnother example is the Micro Aparthotel in Amsterdam, which offers guests flexible accommodation with subscription plans starting at €2,750 per month.

You can price your subscription plan based on your location, the amenities you offer, and a few other key factors. But don’t get hung up on price, remember that flexibility is key.

Challenges facing traditional hotel booking

Traditionally, the hospitality industry thrived on one-time bookings. Guests would research, compare rates, and book a room for a specific length of time. While this model has served us well, it has limitations in today’s dynamic travel environment. Factors such as guest acquisition costs, guest loyalty, seasonality, and competition constantly put pressure on securing bookings and maximizing revenue.

The hotel subscription model turns tradition on its head and turns guests into loyalty members. Here’s how it works:

• membership level: Hotels offer tiered subscription plans, each with different fees and benefits. These tiers may unlock a certain number of nights per month, discounted rates per stay, room upgrades, or exclusive benefits like spa treatments or airport transfers.

• Recurring income: Guests pay a predictable monthly or annual fee, which guarantees revenue for the hotel and is convenient for guests’ budgets.

• Build loyalty: Subscriptions deepen the connection between guests and your brand. They become invested in your hotel and enjoy the convenience and familiarity it provides.

Think of it like a hotel gym membership. Here’s a subscription plan you can check out to see what I mean.

Guests choose your brand in exchange for exclusive benefits and a streamlined booking experience. This fosters a sense of community and strengthens guest loyalty, a valuable asset in a competitive market.

The potential of subscription models in the hotel industry

The power of subscription lies in its ability to address key challenges facing hoteliers.

Subscription fees can buffer seasonal fluctuations, guarantee basic income and financial stability throughout the year, and more importantly, establish a deeper connection with guests.

The convenience and predictability of membership builds trust and loyalty, encouraging repeat business. This shift in focus from short-term discounts to long-term value allows hotels to escape the price wars that typically dominate the market. Traditional booking pattern.

Subscriptions can also solve the problem of empty rooms during the off-season. By offering discounted subscription prices during the off-season, hotels can incentivize guests to stay and maximize occupancy.

In addition to these core benefits, the hotel subscription model also provides greater pricing flexibility. You can adjust prices based on demand, ensuring profitability during peak seasons. In addition, the subscription model also provides great benefits for your guests, helping them save a lot of money, providing additional exclusive benefits, and is generally flexible as well.

Essentially, the subscription model provides hotels with a powerful tool to build a loyal and engaged customer base. It creates a win-win situation, providing convenience and value to guests and recurring revenue and a more stable business environment for hoteliers.

Now let’s understand how to develop a subscription model that will attract guests.

Designing a hotel accommodation subscription model

Developing a successful hotel subscription model requires a three-pronged approach: understanding your target audience, creating a tiered structure, and enriching the overall value proposition.

• Target Audience: The first step is to identify your ideal subscriber. Do you serve business travelers looking for predictable accommodations, or digital nomads eager to work from anywhere? Understanding their needs allows you to tailor your benefits to meet their needs.

• Hierarchical structure: Variety is key! Offer multiple subscription tiers with varying prices and benefits. A basic tier might offer a certain number of discounted nights per year, while a premium tier offers unlimited stays, room upgrades, and exclusive perks. Cater to different budgets and travel styles.

• Enriching value proposition: Think beyond room nights. Subscription plans should be attractive. Consider including perks like free breakfast, early check-in/late check-out options, or discounts on dining and spa services. This creates a sense of value that goes beyond the room itself, making your subscription a smart choice for savvy travelers.

By following these steps, you can design a subscription model that attracts the right guests and provides a compelling value proposition.

Tips for implementing a subscription model

The potential of the hotel subscription model is undeniable, but successful implementation depends on careful planning and execution. Here are some key tips to guide you:

• Know your audience: Before you dive in, conduct thorough market research to identify your ideal subscriber. Understanding their needs allows you to tailor your subscription tiers and benefits accordingly.

• Create eye-catching layers: Offer a range of subscription tiers, with varying prices and benefits. This caters to different budgets and travel styles. Consider offering a basic tier for occasional guests, a mid-level tier for frequent travelers, and a premium tier for VIPs.

• Outstanding value: Don’t just focus on the discounted price. Emphasize the overall value proposition of the subscription.

• Seamless booking and management: Invest in technology that simplifies the subscription process for both you and your guests. This includes user-friendly booking platforms, automated subscription management tools, and clear communication channels for inquiries and updates.

• Marketing and Communications: Spread the word! Promote your subscription plan through targeted marketing campaigns and highlight its benefits on your website and social media channels.

• Collect feedback and adjust: Don’t be afraid to adjust your program based on guest feedback and usage data. Monitor trends, analyze what’s working well, and be prepared to adjust tiers, benefits, or pricing structures to optimize your subscription model for long-term success.

By following these tips, you can transform your subscription model from a new concept into a thriving program that builds guest loyalty, increases recurring revenue, and puts your hotel at the forefront of the future of hospitality.