Loyalty in the STR Space
With the rise of travelers' interests in unique and localized experiences, short-term rentals have gained ground in the hospitality landscape. However, the introduction of loyalty programs for STRs is relatively new.
While the idea may feel unusual to some in the STR space, the signs point to a deep untapped opportunity here.
And according to the MODIV Mindset STR report, travelers are open to the concept.
Data shows that at present, “78% of short-term rental guests feel ‘little or no’ loyalty towards a particular unit or owner, and 73% of them say it’s not easy to be loyal.”
The silver lining? “Of those polled, three-quarters would “consider being loyal if they had a reason and/or mechanism to do so.”
Discover more STR loyalty statistics with the MODIV Mindset Survey.
Done well, loyalty programs yield benefits like increased guest satisfaction and repeat business; they also provide a vehicle to recognize and reward frequent stayers for their business.
STRs can leverage loyalty to retain guests rather than always looking for new ones. By focusing on repeat business, STRs can increase revenue, improve their bottom line and worry less about always being ‘on the hunt.’
Loyalty programs are a valuable tool for data collection. When guests sign up, STRs can obtain their preferences and tailor their content, offers, rewards, and recommendations. Understanding these preferences and behaviors is key to creating more personal and meaningful guest experiences.
One of the central challenges in loyalty programs for STRs is determining what kind of rewards and incentives would be most appealing to guests. While the traditional rewards for hotel programs are free nights or upgrades, those may not translate adequately to the STR industry. STRs offer more bespoke experiences, and the benefits must match up.
Another challenge: cost. Properly setting up and managing a loyalty program can be expensive and only worthwhile if the revenue generated exceeds the cost. The risk/reward ratio can be a winning one, with guests willing to pay higher rates for experiences they find valuable.
Loyalty is a long game – but could be on the horizon for STRs who do it right.
While traditional loyalty programs and incentives carry mass appeal, data shows a consumer desire far beyond simple points and rewards: Trust.
In a recent MODIV Mindset Survey of global travelers and their preferences, 77% of guests indicated their desire to “choose trust before points and status,” with a similar percentage stating they would “spend more on trust than on points and status."
To earn that trust, travelers now expect:
- Consistency and communication
- Unique experiences and rewards
- Transparency in value
- Personalization according to their preferences
What does this look like for STRs?
- Strong digital presence, user-friendly booking platforms, and clear representations of properties and amenities
- Customized welcome packages, personalized recommendations, or upgrades to higher-tier units
- Credible, easily accessible information, such as blogs demonstrating local insight and an understanding of customer questions and interests
- Actioning guest preference data and feedback to personalize their digital and stay experiences
- Offers and rewards that take it up a notch – points are pointless, it's time to get personal
- Access to local experiences through partnerships and close ties to the community
While STR loyalty programs are still not widely adopted, the concept is gaining momentum. By analyzing guest data, offering personalized experiences, and streamlining booking and rewards redemption processes, STR operators can leverage loyalty programs to gain a competitive edge and cultivate long-term guest relationships. Although implementing these programs may present challenges, it's a potential game changer for creative, guest-centered STRs to execute effectively.