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Guest Lifetime Value (GLV)

Guest Lifetime Value (GLV)

What is Guest Lifetime Value (GLV)?

Guest Lifetime Value (GLV) is the total revenue a hotel can expect from one guest over the entire relationship. It includes room reservations, ancillary services, and referrals. GLV helps hotels measure how profitable individual guests are, not just how profitable a single stay is.

How it can be used in hotels

GLV helps with making decisions about guest relationships, loyalty programmes, and personalised marketing. By understanding which guest segments have the highest lifetime value, hotels can adapt their communication, offer the right upgrades, and invest more in keeping guests.

It can also be used with the PMS and CRM to help staff track how often customers stay, how much they spend, and how they engage with the business across different channels.

Ways to increase GLV include:

  • Create personalised offers for guests before they arrive, and upsell them during their stay.
  • Encourage people to sign up for loyalty programmes.
  • Keep in touch with customers after they've left and send them special offers.
  • Ensure service consistency to encourage repeat stays.

The key point to understand is that it is often better for a company to increase the value of guests already on its books than to try to attract new ones. Even a small increase in guest retention can significantly impact total revenue.

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FAQ
How does GLV work in hotels?
Why is GLV important for operations?
What systems connect with GLV?
How can loyalty programmes increase GLV?
Can GLV data be used for marketing campaigns?
What is the difference between GLV and RevPAR?

Other Key Terms

Overbooking Management

Overbooking management is the practice of selling more rooms than are physically available, anticipating cancellations or no-shows. Hotels use this strategy to maximise occupancy and revenue while aiming to avoid having unsold rooms.

Automated Upselling

Automated upselling is the use of software to automatically suggest and sell room upgrades, add-ons, or services to guests without having to involve staff. It uses guest data, timing, and personalisation algorithms to automatically present relevant offers during or after booking, via email, chat, or PMS-integrated tools.

Ancillary Revenue

Hotels can generate income from more than just room bookings. This additional income is known as ancillary revenue. It includes revenue from food and beverage sales, spa and wellness services, parking, meeting room rentals, room upgrades, and additional experiences such as tours or late check-out fees.

Multichannel Communication

Multichannel communication is the use of multiple media channels to interact with guests. In hotels, this includes phone, email, text, chat apps (like WhatsApp), social media, and in-room messaging.The aim is to provide smooth, consistent communication across all channels so guests can choose their preferred method of contact.