(CLV) (For hotels). Total value a guest brings across all their stays.
👉 How much total revenue a guest will generate over the entire relationship with your hotel or brand. It’s not all about that first booking – think long game.
📊 What is CLV?
Customer Lifetime Value estimates the total expected income a customer will bring throughout their time engaging with your hotel — not just one stay, but across all future bookings, upsells and loyalty interactions.
🧮 General Formula
CLV = Average spend per stay × Frequency × Relationship duration
Example: A guest spends £250 per stay, stays twice a year, for 4 years:
→ CLV = £250 × 2 × 4 = £2,000
Can also be adjusted to subtract acquisition, retention or service costs.
✅ Why is it important?
- Helps you identify and nurture your most valuable customers.
- Guides your loyalty strategy and resource allocation.
- Ensures your customer acquisition cost (CAC) aligns with expected return.
- Encourages long-term thinking in revenue and marketing planning.
📘 Real-world example
A city hotel finds that returning business travellers have a CLV of £3,800, while weekend tourists average just £700. The hotel shifts focus to premium loyalty perks for corporate guests.
🔄 How does it differ from ADR or RevPAR?
ADR and RevPAR are snapshot metrics. CLV is long-term, focusing on the full relationship value.
· A guest with a lower nightly rate may be more valuable over time than a one-time high-spender.
