Guest Retention: The Secret to Sustaining Your Hotel

Updated: Feb 21



As J. Willard “Bill” Marriott once said, Great companies: are built by people who never stop thinking about ways to improve the business.

It is hard, no doubt to start a business these days in Ghana and to have them established.

But by emphasizing guest loyalty as a key performance indicator (KPI) for your business, you can ensure your priorities are in the right place. Generating new business by growing your guest/customer base is key to your business success. However, it can sometimes be very challenging.

This blog is here to guide you to properly understand guests/customers and retention rates and how it can help you grow your business.


What is your guest retention rate?

Before you can focus on improving guests' loyalty, you must target how you are currently doing in this department. You might think you have an idea about how you are doing, but you need an objective measurement that gives you accurate information on your growth. And one of the best ways to do this is by measuring your customer retention rate.

While there are different formulas for calculating retention, the standard equation looks something like this:


Retention Rate = ((CE-CN)/CS)) X 100

If that looks a little complicated, do not worry. Once explained, you will find it very simple.

Here is what those variables stand for:

CE = The total number of customers when the period ends

CN = The total number of new customers that you acquired during the period

CS = The total number of customers at the beginning of a period

For instance, if you start the year/month/quarter with 2,500 customers. You lose 500 along the way, but you also gain 600. At the end of the period, you will have 2,600 customers.


The math would look like this:

2,600-600 = 2000 → 2000/2,500 = .8 → .8 X 100 = 80 percent.

Now, you might be wondering, Is 80% a good retention rate? The answer is, it depends!

In some industries, 80% would be incredible. In other industries, it would indicate that something is seriously wrong.

At this point, bring context into the matter and evaluate how you are doing and what your goals are.

But regardless of whether your retention rate is 10 percent or 95 percent, there is always room for improvement. And anything you do to improve your customer retention will significantly grow your business.


Why guests/customer retention matters

Nobody wants to lose a customer, but just how important is having a high guest/ customer retention rate?

According to data curated by Harvard Business Review, onboarding a new customer is somewhere between 5x and 25x more expensive than retaining a customer you already have. And with a simple five percent increase in retention rates, you can grow profits by 25 to 95%.


Once you think about it, you realize these data points make a whole lot of sense. When you retain customers at a high rate, you do not have to spend many resources on marketing, sales, customer training (depending on the industry), and other costs. Fortunately, customers who stick around are happy, who become walking billboards for referrals.


Ways to improve guest retention

Are you convinced of the idea that guest retention is needed? If yes, then you are probably thinking of how to increase your retention rate. We have a few tips for you:


1. Retain guests with a smooth welcome process

First impressions are everything. After the initial excitement of getting the new product or acquiring the new service, most customers will default back to the first experience they had with your brand. If it is positive, they are more likely to stick around.

A good welcome aboard process can set you up for success for years to come.


2. Encourage customer feedback

One of the ways of retaining customers is to know how they feel. When you understand customer sentiment and what they like/dislike, you can refine your approach and better meet their needs.

You can use customer survey templates to gather feedback or even suggestion boxes.

Not only is gathering feedback beneficial to your retention strategies but, closing the gap with your customers by building relationships is crucial. Consider customizing a Thank you message on your survey and responding directly to customer feedback to show them that you are listening and using their feedback to improve.


3. Always engage existing customers as well

You cannot stop marketing to someone just because they are a customer. In the marketplace, where competition is high, loyalty is low, so you must stay on top of their minds.

You can do this via weekly email newsletters, running contests on social media, and producing high-value content (like videos, podcasts, or downloadable PDF resources).


4. Reward promoters and loyal customers

Customers always want to feel appreciated. Hence just one mistake or better opportunity with a competitor will be all it takes for them to switch. You must not take your loyal customers for granted. Reward them for sticking around.

If you measure loyalty by how long a customer has been with you, you might consider sending bonus gifts at necessary intervals, such as six months and a year. Setting up a loyalty program is also always an option.

Or, say thank you and encourage promoters to refer their friends by incorporating rewards directly within your survey feedback. Powersoft System allows you to embed referral links and reward info directly into your customized survey without you having to lift a finger.


5. Offer Great customer service.

Ensure your customer service is exceptional such as a paperless way of booking and making orders from their rooms, and go the extra mile when you can. Your customers will remember your service, and they are more likely to refer other people to you.


6. Host events

Hosting your event can be a great way to get to know your customers and build relationships. Invite some of your best existing customers and encourage them to bring their friends.


7. Give back to your community (corporate social responsibility)

Building brand awareness in your local community is a great way to attract new customers. Consider a sponsorship or participating in a community event to raise your business profile. Especially in Ghana, people are drawn more to organizations that help the needy.


We hope this blog has served you with what you need. Try these strategies out and let us know how effective it is.



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