Lock-in Strategy in Hotels... Capturing Customers with Benefits

Expansion of Hotel Vacationers, Diversification of Hotel Usage
Strengthening Memberships Offering Benefits in Accommodation and Food & Beverage

Lotte Hotel employees are introducing the revamped Lotte Hotel Rewards membership launched earlier this year.
[Photo by Lotte Hotel].

Providing membership customers with greater benefits compared to general consumers to turn them into loyal customers of a channel is a common strategy in the distribution industry. This kind of customer lock-in strategy is also spreading in the hotel industry. As the number of "hokangseu" (hotel + vacation) travelers increases, domestic customers visiting hotels have significantly grown, and with the diversification of hokangseu styles, membership services offering more benefits in lodging, food, and beverage are being introduced.

According to the hotel industry on the 4th, Jeju Shinhwa World launched an online annual voucher called 'Shinhwa Plus' on the 2nd. It is divided into three types: J, S, and W, allowing customers to choose according to their purpose or pattern of visiting Jeju. The J type provides four 50,000 KRW meal vouchers and two dinner buffet vouchers for one person. It is said to be useful for customers planning to use food and beverage outlets more than twice. The S type includes five 50,000 KRW meal vouchers, two Shinhwa Tower accommodation vouchers, and two Landing Tower accommodation vouchers. The W type offers eight 50,000 KRW meal vouchers, two Somerset Suite room accommodation vouchers, and two Shinhwa Tower Family Twin room accommodation vouchers. Prices range from 390,000 KRW to 1,490,000 KRW.

All customers who purchase Shinhwa Plus receive a 40% discount voucher for rooms at Shinhwa Tower and Landing Tower, a permanent 20% discount at Jeju Shinhwa World's directly operated food and beverage outlets, free admission to Shinhwa Theme Park, admission to Shinhwa Water Park, and up to 50% annual discounts at major tourist attractions in Jeju. It will be available for purchase through the official website starting next month, and an early bird promotion will be held for phone purchases via the representative number in March, extending the voucher validity period by one month to be usable for 13 months.

Seoul Dragon City launched a new membership called 'Prestige Club' earlier this year and is expanding its membership base. Seoul Dragon City has also been strengthening its membership by adding food and beverage memberships after initially launching three types of 'SDC Membership' in February 2019. As of December last year, the total number of membership members increased by 70% compared to 2021.

The Prestige Club membership offers benefits for rooms, food and beverage outlets, and fitness use. It provides one Grand Mercure room accommodation voucher, two Novotel Suite room accommodation vouchers, and six room discount vouchers usable at all four hotels. It also includes seven food and beverage benefits such as a two-person meal voucher at the Chinese restaurant 'FEI' and ten 50,000 KRW restaurant vouchers. Ongoing benefits such as a 10% discount on the lowest room rate of the day are also prepared. It is explained that membership members can receive benefits worth twice the annual fee.

Benefits through free membership are also being enhanced. Lotte Hotel revamped the benefits of its free membership program 'Lotte Hotel Rewards' at the beginning of the year. The accumulation rates by membership grade (Classic, Silver, Gold, Platinum) have been increased up to 10%, and the point validity period has been extended from 3 years to 5 years. The stay requirement for upgrading to Silver, which provides practical benefits, has been reduced from 7 days to 5 days, lowering the threshold. Benefits for loyal customers have also been strengthened. Gold and above members receive room upgrades, hotel vouchers worth 100 USD, and late check-out privileges. Platinum members receive an additional five free breakfast benefits. It is also possible to carry over performance, making it easier to maintain the grade the following year.

Shilla Rewards is a free integrated membership that can be freely used at Seoul and Jeju Shilla Hotels, Shilla Monogram, and 14 Shilla Stay locations nationwide. Upon joining, members receive benefits such as accumulation and discounts based on room and food and beverage usage performance. Shilla Stay offers various benefits such as the '10+1 Promotion,' which provides one free night accommodation voucher after booking through the official website or application (app) and staying 10 nights for Shilla Rewards members.

Glad Hotel offers 'Glad Friends,' a membership program for those who sign up through the hotel's official website or app, providing member-exclusive products such as Glad goods and cost-effective packages at the lowest prices.

This content was produced with the assistance of AI translation services.