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Architaa Pandey
Architaa Pandey September 27, 2022

Keeping customers close to your travel and hospitality apps in 2022 is the holy grail for travel marketers worldwide. It is due to increased competition and the industry being on the cusp of a new golden age. It is well-known that customer retention is easier and cheaper than customer acquisition. Over the next decade, travel and hospitality apps will focus heavily on customer retention rather than attracting new audiences to pave the way for long-term success, profitability, and sustainability. 

The pandemic is on the verge of being declared over. The travel and hospitality industry has seen a recent boom, with people looking to get out of their houses and start exploring. Revenge travel and lockdown fatigue also contribute to the recent increase in people traveling again. The travel and hospitality apps thus saw an increased footprint in 2022. The trick for these apps is to retain and convert them into long-term loyal customers.

What is customer retention?

Customer retention is a performance metric used to measure a brand’s ability to retain its customers over time. The metric also reflects the number of loyal customers the organization has and can be used to predict customer satisfaction, customer engagement, repurchase behavior, and emotional ties to a brand.

The relationship between a brand and a customer begins with an initial interaction. Still, customer retention is measured when the customer first gets activated, i.e., when the customer makes the first purchase with the brand. 

Once measured, customer retention will give the brand a clearer picture of customer experience and success. They can then perform data analytics on it. For instance, if the brand observes a drop in customer retention, it can investigate this to identify the root cause and adjust its offerings accordingly.

Measuring customer retention is necessary because acquiring and activating new customers costs much more than catering to and grooming existing customers. Retained and happy customers also act as brand ambassadors and engage in word-of-mouth marketing.

Do travel and hospitality apps really need to focus on customer retention?

The answer is a big YES!

Travel and hospitality apps cater to a highly irregular audience. According to Statista, the average 90-day retention for hospitality and travel apps is 44%. Suppose your brand spends time and money to attract and convert a customer. People, on average, travel about twice a year. That leaves a substantial time gap between two consecutive trips. It is enough time for this person to forget about their previous travel experience, including your travel and hospitality app.

It is also ample time for other brands and businesses to try to poach this customer and attract them to their app. This is where your brand-built customer loyalty through its retention strategies comes into the picture. 

Customer Retention is important for travel and hospitality apps

If the person remembers the travel experience and the value that your app added while and after they used it, they will not shift to any other brand. Your brand’s ability to add value to this person’s future travel and hospitality needs will also determine whether he takes his business elsewhere. All this will be determined by how strong your brand’s customer retention game is.

More than 80% of users stop using the app post-trip, and the app enters a state of hibernation, sometimes permanently. But letting it just stay there unutilized is a wasted opportunity. Travel and hospitality apps should provide an experience so rich and engaging that when the user is ready to travel again, they pick up their phones and open your app again.

How to boost customer retention for travel and hospitality apps

1. Have a seamless onboarding experience

App Onboarding is like the first date between the customer and the brand, where the customer decides whether they want to stay with the brand or leave immediately. Optimize the travel and hospitality app onboarding experience to show users the app’s real value and help them reach the ‘aha’ moment early. Research shows that engagement increases by 400% and retention rates by 50% with the right user onboarding flow. 

Also Read: How to Boost User Onboarding for Travel Apps

User onboarding is the first step for ensuring that customer retention happens in travel and hospitality apps
Source: Hotel Tonight

2. More user sessions mean higher user retention

An increase in the user sessions for any app is usually followed by a proportionate increase in the app retention rate. Brands can look to increase the user sessions for their app by following these tips:

  • Capturing rich data

When we say rich data, it means capturing event-related data. It includes a user’s recently searched destinations, preferred travel and stay dates, preferred modes of transportation, etc.

  • Create advanced user segments

This step is vital to increase app engagement and helps send relevant and actionable communication to the users. Leverage in-app behavior and the rich data collected to divide users into segments.

  • Omnichannel engagement approach

Your brand’s communication to users shouldn’t be limited to just one channel. Leverage all communication channels, like SMS, push notifications, emails, etc., to be present in your user’s mind. It ensures increased brand recall and will lead to a higher retention rate. Upshot.ai enables travel and hospitality brands to develop an omnichannel engagement approach.

3. Create bite-sized content for destination storytelling

Telling a story is essential for every brand and industry. The trick is to give a user multiple reasons to open the travel and hospitality app other than just to book a trip or a stay. Including destination, storytelling offers users an added incentive to open the app. Another proven way of ensuring higher app opening and increased user retention is by having bite-sized content on the app. 

Short videos, interactive graphics, or short lists around popular places or tourist attractions engage users. ‘Top destinations around Paris’ or ‘How to choose the best suite at a hotel’ are some examples of the same. The content could be present on the app or shared with users through emails with an embedded deep link to the app. 

Travel and hospitality content increases the chance of customer retention
Source: Make My Trip

4. Make the app the one-stop-solution for all the travel needs

People remember when their lives are made easy by anything and are bound to return to it. Your travel and hospitality app should be able to do that. It should be a one-stop solution for everything the user could possibly require while traveling. Some examples include:

  • Helping travelers manage their spending by showing them their room charges in real time.
  • Enabling people to book additional travel and hotel services directly via the app.
  • Removing the hassle of carrying boarding passes and bulky room keys by having everything accessible through their mobile apps.
  • Removing or minimizing human interactions which is especially relevant in the wake of the pandemic.

5. Have loyalty programs in place

Loyalty programs are the best way to ensure that users return to your app. Here are some ways in which you can reward your customers:

  • Reward your repeat customers

Rewarding frequent users encourages them to keep doing business with your app. Giving ‘Mile Points’ for every mile flown or ‘Hotel Points’ for night’s stay at a hotel ensures that travelers remain incentivized to use your app again. Rewards like ‘Spend ten nights with us and earn one extra night for free’ or ‘Fly 1000 miles with us and get a Spa Massage at any Airport Lounge’ are examples of how these rewards work.

  • Encourage direct bookings

Online Travel Agencies (OTAs) are the biggest competitors of small to medium-sized travel and hospitality apps. These offer better deals and are thus more popular. One way of ensuring your target audience uses and sticks with your brand is to provide reward points that could be redeemed to get free experiences or upgrades while traveling. When a user uses your app directly to make their bookings instead of using OTA giants like Expedia or Bookings.com, it helps your brand save on commission, and all the profit goes straight into your pocket.

  • Foster a personal connection with your guests

Being a part of a loyalty program makes the user feel like they are a part of a valued community. It feels like they are a part of the chosen few and are lucky. It makes them more receptive to your future communications, like emails and social media campaigns. You can use the User Engagement Offering of Upshot.ai to design a highly personalized engagement strategy to help build a personal connection with your customers.

Loyalty Program for Marriott
Source: Marriott
Rewards and Loyalty points could be earned and spent on travel and hospitality apps. This skyrockets customer retention.
Source: Mariott

6. Assess past guests and bookings

Go back to your user logs and look to recategorize users based on recency, frequency, and monetary value. You want to identify users who:

  • Used your apps services 2-month ago rather than a year ago
  • Booked a trip/stay five times in the last year rather than just once
  • Spent $25000 on your app rather than $500

Once you’ve identified these ‘super-travelers,’ devise a strategy to keep these VIPs returning to your app and the services offered. These users will become excellent brand ambassadors, but you first must provide them with a highly personalized travel experience and develop a relationship with them.

7. Offer flexibility to travelers

Many customers delay making a travel or hotel reservation as the exact travel dates are often undecided. And, often, changing the dates post reservation costs almost double the original price. Offering a flexible booking option for free or a nominal charge nudges travelers to complete their bookings. This offering is even more relevant post the pandemic when peoples’ plans are bound to change quickly.

Offering flexibility in bookings prompts users to book instantly thus ensuring customer retention
Source: United Airlines

8. Gamify the travel experience

Everyone likes games to add the element of fun to their tasks. Giving badges on traveling to a state multiple times or having maps to show where the user has traveled in the past adds the element of Gamification to traveling. Hotels could have a progress wheel of all the services a traveler has experienced at their hotel, including pool, spa, etc. The progress wheel would push travelers to explore the hotel’s offerings and look forward to staying at the hotel again. Upshot.ai offers Gamification solutions for travel and hospitality apps that would hook travelers and make them come back for more.

Customer retention can also be done by adding fun via gamification to travel and hospitality apps
Source: Hotel Tonight

Conclusion

In the wake of the pandemic, it is even more critical now for travel and hospitality apps to retain their customers. Easy onboarding, omnichannel communication, leveraging gamification, building personal connections, and rewarding loyal customers are some of the retention strategies for travel and hotel apps. When put in action, they have the power to boost customer retention for travel and hospitality apps.

The Upshot.ai Advantage

Upshot.ai is an omnichannel, user engagement, and gamification platform that helps digital product owners and marketers improve product adoption and conversions.

With Upshot.ai, banks, Insurance, and FinTech firms can enhance their digital experiences with pre-built gamification features. It can provide personalized insights, actionable recommendations, and contextual nudges designed to deepen its relationship with its users. Book a demo of the most comprehensive user engagement and gamification platform to achieve your digital product goals. Join our communities for more insights, guides, and best practices that keep you updated with proven strategies and tips to supercharge your campaigns.

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