Why and How to Set Up a Vacation Rental Loyalty Program

Question: What’s better than a happy vacation rental guest? Answer: A happy vacation rental guest who books again and again! And a great way to make that happen? Set up a successful loyalty and referral program.

As Mark Simpson, founder of vacation rental direct booking specialist platform Boostly, advises: “You’ve got to dangle the carrot, because then people are more likely to act.”

That’s why a great incentive program can get people booking again and again, and referring you to friends too.

But setting up a system from scratch can be complex and confusing, with a variety of different kinds of program out there—and the last thing you want to do is make booking more complicated for guests, or have your system come across as impersonal or corporate.

That’s why below we’ve explained: 

• The benefits of incentivizing loyalty and referrals

• The 5 main types of loyalty schemes for vacation rentals

• Best practices and tips on how to share your loyalty program effectively

We’ve also explored how maximizing automated guest messaging can improve guest engagement and uptake of your loyalty program for even better results.

5 business benefits of incentivizing loyalty and referrals 

Repeat direct bookings help to boost occupancy and revenue

Repeat bookings are great for business. Setting up a scheme to incentivize loyal guests and drive repeat direct bookings makes sense not only for good reviews and relationships, but also for your bottom line. 

1. Repeat bookings bring more reliable revenue and occupancy

Building a strategy around repeat guests helps you to establish predictable revenue and occupancy.

Often, repeat bookings coincide with annual trips—for example, guests who come to you to celebrate their birthday or anniversary—and people who have a great time one year are more likely to want to return. 

This means that you can build up a list of repeat guests who book direct consistently, so you can plan your revenue and occupancy rates thanks to some tried-and-true guests you can often rely on.

2. Repeat bookings save you money and time

It’s a well-known business principle that it’s easier to convert existing customers than new ones. Research shows that it can cost five to 25 times more to acquire a new customer than to retain one, and that the cost of servicing those clients also decreases with time.

The takeaway? Happy guests who have booked with you before are much more likely to book again, and won’t need any convincing via expensive ad campaigns (though they may still welcome a well-timed email offer or discount code).

3. Repeat guests will build your brand (and save on OTA fees)

Make direct bookings easy for your guests with a beautiful, intuitive website—like this ATHENS Vacation Rentals website built by Hospitable.com
athensvacationrentals.hospitable.rentals

Taking repeat bookings also enables you to build your vacation rental brand, so guests see you as more than just a stranger with an OTA listing, and more of a real business with trustworthy, professional systems.

As Mark Simpson, founder of Boostly, says: “The reason why somebody goes to Airbnb or Booking.com or Vrbo is because that’s the recognized brand. They spend billions making sure of that. But what they don’t do is add that little bit extra.”

“That little bit extra” is what smaller STR businesses can offer to differentiate themselves from the competition. And building your brand to differentiate yourself means that repeat guests are more likely to book direct, saving you hundreds or even thousands of dollars in OTA fees.

4. Repeat guests mean more referrals 

Repeat guests are also more likely to recommend your rentals to their friends, family, or colleagues. They had a great guest experience and remembered you—and may have developed a strong relationship with you. The more memorable and positive the stay, the more effusive the recommendation will be.

This is important, because word-of-mouth recommendations are powerful. A report from Nielsen found that 92% of buyers are more likely to believe friends and family compared to advertising.

“I always say there’s a story behind each booking,” says Mark, from Boostly. “And it’s up to us as business owners to figure out what that story is and find out the context. If you can master that, and if your guest leaves the property with excitement, then you’ve done a good job.

“If you do it well, then the benefit of it is that those people will go home, they’ll tell their friends, their coworkers, they’ll talk about it on social media,” he says.

Mark recommends simple, assertive action, that maybe takes you out of your comfort zone, by sending messages that directly ask: “Do you know anyone that is looking for a place to stay?” 

“This works really well for business guests,” he says. “Everybody knows everybody. Say you’ve had a business guest stay for a conference. I guarantee that someone else they know is going to be in that town or city for another conference sooner or later.”

Vacation rental loyalty programs: The 5 main types

Before you go about sharing your loyalty program or repeat booking incentives, you’ll want to decide which type will work best for you and your rentals. 

The 5 main types of vacation loyalty programs

• Loyalty points – Guests build up points and can exchange them for gifts or “upgrades”

• Tiers – Enables guests to qualify for greater rewards depending on their bookings

• Gifts – Offer guests welcome gifts with each repeat booking for an added incentive

• Discounts – Money-off coupons or offers to upgrade to a better rental or time of year for free

• Referral offers – Discounts, treats or vouchers towards your guest’s next stay, or sent in the mail, if they successfully refer your business to a friend or family

Ideas for gifts for your vacation rental loyalty program

The exact points, tiers, gifts, and discounts you give will depend on the type of business you have, and can be personalized to location and type of guest. Your program should be guest-centric.

For example, there’s no point in offering discounts in early September if you know that most of your guests have children who just started a new school year. In contrast, that could work brilliantly for child-free couples.

For example, you could offer: 

• A group discount for guests who often travel in larger groups

• A discount for one-bed rentals if you typically welcome solo travelers

• Bottle of Champagne for any guests booking a honeymoon or anniversary

• Welcome cupcakes for guests who book for their birthday

• Light-roasted coffee beans for digital nomads

• A pass or discount for a local food tour for returning foodies

• Points to redeem against a great meal at a nearby favorite

Offering guests extra gifts as part of their package can be a great loyalty scheme extra

If your business is small, you could even personalize loyalty gifts or tiers to the specific guests. 

These might include:

• A non-alcoholic cocktail on arrival for a guest who you know doesn’t drink

• Gluten-free snacks for a guest who is celiac

• Coffee beans from the coffee shop they said they loved last time they visited

• A voucher for a child-friendly attraction that the parents mentioned in their review

Anything that will make guests feel genuinely welcomed, pampered, or like they’ve got a great deal, will work as a great referral and loyalty program.

Referrals can also be given even if guests haven’t booked to return themselves.

For example, Mark says: “Something that worked really well is we said to guests, if you recommend us and they stay, and say you’re the reason they booked, then we’ll send you a bottle of wine, local beers, local chocolates…to say thank you. 

“You could substitute that for Amazon vouchers, Apple vouchers, Netflix, days out, hard cash…whatever it may be.

“People might say that it’s expensive. But if you compare it to having to pay commission costs to an OTA. A $50 Amazon voucher compared to $100, $200, or $300 in commission for a $1,000 booking, depending on the OTA. It pales into insignificance.”

Why should you standardize your loyalty program?

Standardizing your loyalty program will save you time, and will be easier for guests to understand.

This doesn’t mean making it impersonal or offering the exact same thing every time, but does mean that guests who book again and again will look forward to an incentive, discount, or gift, and will be even more likely to return.

For example, some hotels do this very well: The Doubletree Hilton is known for offering a warm cookie on check-in. It’s consistent, expected, and is a little incentive for guests to stay loyal to that brand. Vacation rental businesses are small and agile enough to take this idea and run with it for repeat guests to build that relationship further.

Making your incentives consistent and repeatable will also reduce work for you, as you won’t have to reinvent the wheel with new offers each time. Plus, you can pre-write and schedule communication and offer messages to guests using Hospitable.com to save even more time and effort.

Now you’ve got your loyalty program decided, it’s time to let guests know how to benefit from it.

Sharing your loyalty program: Best practices and tips

Maintaining a presence on social media can build your brand and get the word of your loyalty program out faster
instagram.com/athensvacationrentals/

Don’t let your loyalty program be the internet’s best-kept secret. Here’s how to effectively get the word out to your guests.

Build your network and collect contact information

Building loyalty among guests is about establishing great communication right from the start—to build rapport and share your incentives. 

This means getting their phone number and/or email address, and getting explicit permission to email or text them regularly (for example, with regular offers or a monthly newsletter).

Of course, most OTAs will offer you a means to chat with guests through their platform, such as Airbnb in-app messaging, and this is great at first. But for the best return on investment, your loyalty program should go beyond this to chat or email guests outside of the OTA, once the booking is done.

Set up your systems to automate guest data collection, so you can get around OTA’s usual tactic of hiding guest email addresses (in an attempt to force you to use their platform forever).

For example, Hospitable.com can help you set up a mailing list easily, by connecting to leading tools like MailChimp. Hospitable even has a custom code that enables you to automatically remind guests to send their email address if they haven’t already.

Then, when you send a special offer via email, you can let them know you’ve done so via the original OTA they first booked with. This maintains the relationship and avoids the email getting lost in their inbox. 

Building your network in this way gives you the power to build relationships with guests on your own terms, and removes your total reliance on external platforms.

Promote your incentives on social media, your website, and via email

When it comes to sharing your loyalty program, don’t be afraid to shout about it everywhere, over and over again.

Ideas include:

• Send regular newsletters about your business, local area, and events, and include seasonal offers or direct booking incentives

• Create a “pop-up” on your website that invites visitors to download a free coupon

• Post about your loyalty program, offers, or incentives on Instagram, TikTok, or Facebook

• Share a photo of your free gift for repeat guests, such as a welcome glass of Champagne

• Make a Reel or TikTok of yourself hitting “send” on your latest newsletter with offers

• Have a saved Highlight on Instagram about your loyalty program and how to benefit

• Post a video about why you love welcoming repeat guests

• Show how you prepare for direct bookings and how you personalize stays with items you know guests liked last time (such as locally roasted coffee or vegan snacks)

Research shows it takes people at least seven views or interactions with a product or company to buy something—or even notice it—on oversaturated social media sites. Everyone is busy and inboxes are usually overflowing.

So if you feel like you’re repeating yourself, you’re almost certainly not (and even if you are, that isn’t a bad thing). Share, share, and share again, to keep your business top of mind.

Speak directly to repeat guests 

Hospitable’s Guest Experience messaging feature can help make guest communication easier and save you hours of time

If you’ve sent an email to your list advertising a new offer, discount, seasonal deal, or referral gift, there’s no reason why you can’t nudge guests in another way too, and personalize it even more.

This is particularly true for guests who you have an especially good relationship with. 

You could: 

• Send them a one-off, personal email that’s clearly addressed to them alone, rather than a more impersonal mailing list message

• Message them on Facebook, or DM them on Instagram, to let them know that you’ve sent them a special offer for their favorite rental

• Send the offer or booking link directly in the message so they know it’s personal

• Use inbox filters to see a guest who stayed during a particular time of year to send timed offers, such as Christmas specials (because guests often travel at similar times annually)

With Hospitable.com, you can also set up a Zapier “zap”, which will capture guests’ reservation details and send them to an Excel spreadsheet or Google sheet, so you can add notes or keep track of specific stay details, so you can “fine-tune” your referral program.

Hospitable also enables you to use pre-written messages or “canned reponses.” This means you can schedule offers to go out to existing guests at the exact right time, without you needing to remember it, or having to manually type the same message over and over. 

This could leave you more time to bring out the real wow factor. For example, you could take the time to personally notice certain posts or anniversaries on guests’ own social media feeds—such as a recent engagement, anniversary, birthday, baby, or job offer—and send a personalized offer to celebrate their special occasion.

Doing this may be more admin-intensive than normal posts or emails, but it can go a long way to building solid relationships with guests who will feel special and incredibly well cared for.

Automating previously admin-heavy communication via Hospitable means you’ll have more time on your hands to send these powerful personal offers instead.

Make your loyalty program easy to use

Even the best loyalty gifts or discounts will lay untouched if guests can’t use them (or don’t understand how to). 

Make sure your loyalty program is easy to understand and simple to put into motion. Communicate with guests regularly to let them know how to do it—for example, quoting a code on booking, or clicking on an exact link that you’ll track to book.

It’s important to make sure your program is digital too, to make it easier to manage. The days of loyalty cards or stamps are over (and easy for guests to lose or forget).

This could be more or less complicated depending on your online setup, but whatever will make the program as seamless as possible for guests is the way forward.

Track success to understand what works best

Whenever implementing something new in your business, tracking its performance allows you to see what’s working and what’s not. 

For your loyalty and referral incentive program, you could track:

• Your guest return rate – A good one to track first. What percentage of your guests revisit?

• Email opens, clicks, or conversions –Tracking classic email metrics is a good start

• Email subject line styles – Which kinds entice people to open most (and which don’t)?

• Message templates success – Do guests prefer short, blog-style, or to-the-point offers?

• Best (and worst) times to send emails – Are your guests early birds or late-night readers?

• Which incentive types work best – Which offers do your guests love the most?

A successful loyalty and referral program: Save time, money, and build your brand

Whatever type of program you go for—whether points, gifts, discounts, or referral offers—it’s crucial to build great relationships with guests and offer them a personalized experience from the start, before following up with strategically timed emails or messages.

Switching to Hospitable.com can help. We specialize in automated guest experience messaging, which enables you to pre-write, personalize, and schedule messages throughout the guest journey, from pre-stay, right through to the post-stay review request, and referral incentive.

Our technology includes a unified inbox, so you can keep track of guest communication easily, and we also offer a direct booking website tool, so you can create a website that drives direct bookings, and offer repeat guests a smooth booking journey when they decide to return. 

What’s more, standardizing the program and pre-scheduling messages in a clear process makes it easy to replicate, and simple to scale, as your business grows.

Provide a fantastic guest experience, build a great relationship, and win guests’ trust and loyalty as they return again and again—all while saving money and reducing your manual work—and Hospitable can help make it happen.