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Column: industry Tag: Marriott International,acquisition,Starwood Hotels & Resorts,loyalty programs Published: 2017-01-17 19:32 Source: Author:
When Marriott International announced its acquisition of Starwood Hotels & Resorts, many feared what would happen to the companies’ respective loyalty programs — Marriott Rewards, Ritz-Carlton Rewards and Starwood Preferred Guest Program.
Their worries were understandable.? “I was frankly concerned SPG and Marriott were going to try a one-size-fits all approach,” says Brian Kelly, founder of The Points Guy, a website that teaches consumers how to maximize loyalty points and airline miles.
As it turned out, Marriott is keeping the programs separate, for now, allowing members to link their accounts, and get instant status matching on elite tiers and unlimited points transfers between accounts.
There’s been a larger shift in loyalty programs, moving away from points and toward perks, experiences and guest recognition. One size does not fit all anymore.
World of Hyatt
Hyatt Hotels will roll out its purpose-driven loyalty program on March 1. The World of Hyatt (formerly Gold Passport) will have three tiers compared with two previously. Some new benefits will include free parking on reward nights. One promotion gives guests a free night if they stay at least one night in five of Hyatt’s 11 brands.
Jeff Zidell, senior vice president at Hyatt, says the relaunch is one of the first initiatives under the company’s new guiding principle of purpose. “Hospitality is always evolving. Loyalty is always evolving,” he says. “We felt the time was right for us to create a new energy, brand and spirit of care around what we were doing.” To that end, World of Hyatt will reward “empathy” to appeal to the neo-traveler’s desire for meaningful experiences. Zidell is mum on specifics but says Hyatt has “some creative ways to point out empathetic gestures in the travel experience and reward that.”
Zidell adds that the program will continue to focus on the high-end traveler and perhaps those who may no longer be enamored of SPG as it pairs up with Marriott.
“We have always operated on our own timetable, so it’s not about what others are doing...? and we are now the only multi-brand, multi-national hotel company focused on high-end travelers.” He adds, “you have to admit in light of all the change, now is a great time to win the hearts and minds of new travelers.”
Keeping it simple
Wyndham Rewards simplified its program in 2015 by standardizing the amount of points it takes to earn a free night at 15,000. Guests earn 10 points for every dollar spent, and there are no blackout dates.
“When you get those points, we are serious about making sure you can redeem them,” says Noah Brodsky, senior vice president of loyalty and engagement at Wyndham Worldwide. This was extended recently to its vacation rentals portfolio.
Brodsky says the new program has added 7 million members since May 2015 for a total of about 48 million, and a more than 90% increase in reward redemption for the Go Free and Go Fast awards. The latter is a combination of 3,000 points and cash for one night’s stay. Wyndham made a short-lived play for SPG members in October but canceled the promotion because of fraud concerns.
RLHC ditched its points-based system in favor of a guest recognition program called Hello Rewards. Every seven stays get members a free night at a Red Lion hotel. Members get perks during every stay, such as? free breakfast or a $5 Uber promo code.
Bill Linehan, executive vice president and chief marketing officer of RLHC, says Hello Rewards was modeled after retail guest recognition programs that offer rewards more quickly. Points-based systems, he says, really only satisfy top-tier members. “You have to prove your loyalty before you get a better room,” he says. “I don’t think that’s how customers want to behave nowadays. They want instant gratification.”
Hello Rewards also partnered with Expedia. Guests who book a room at a Red Lion hotel on the travel website or Hotels.com can get the Hello Rewards member rate and be automatically enrolled into the program. In an era when hotels are pushing guests to book direct, RLHC’s move is counterintuitive, but Linehan says it has paid off. Membership levels are up – the company wouldn’t say by how much – with a “big percentage”? coming from Expedia. More important, the partnership allows RLHC to take over one-to-one communication with the guest. “We’re recognizing guests from their first interaction with us, even if it’s through an OTA,” he says.
HotelTonight, the mobile booking app that pioneered last-minute booking, launched its own loyalty program in September, called HT Perks. The idea was to keep the program like a video game, like Candy Crush, where guests can “level up” to earn more perks with every stay. The program offers three levels.
“When we were developing HT Perks we banned the word loyalty,” says Jared Simon, co-founder and COO of HotelTonight. “We didn’t want it to look like other programs where you count points. We thought we can make it more fun and introduce the action of leveling up and getting more services.”
Simon also points out that guests don’t have to stick with one brand, while hotels benefit from HotelTonight’s geo-reach feature and other targeting technology, particularly toward the app’s best bookers who convert at a higher rate, book more often and spend more on property. “We have chains that are much more interested in our program because of the targeting capabilities it gives them,” he says.
Wyndham Rewards simplified its program in 2015, making it easier for members to redeem points at places like its Grand Rio Mar Beach and Resort in Puerto Rico.
Members want it now
There is one clear driver for recent loyalty program changes. “In today’s world with everything being about instant gratification, collecting points is difficult to monitor,” says Frances Kiradjian, founder and chair of the Boutique Lodging and Lifestyle Association. “It’s hard to achieve a level where you can obtain any benefit from it.”
To some younger travelers, points are viewed as an annoyance. “Millennials want instant gratification,” she says. “They don’t want to have to collect points like their parents did.”
Those with complex points-based systems are seeking to deliver instant rewards and relevant perks beyond a hotel stay. Most programs tout “members-only pricing” and free WiFi. A few are going beyond that.
Marriott Rewards introduced “cash plus points” in March, which helps guests who haven’t quite? accumulated enough points for a stay. Hilton Worldwide’s? HHonors app allows guests to select a room before check-in, something no other brand currently offers. InterContinental Hotels Group’s IHG Rewards has partnered with Amazon to give members complimentary Kindle books.
In December, La Quinta Inns & Suites announced that La Quinta Returns members who hold Visa credit cards could redeem points for purchases like groceries, coffee and restaurant meals at more than a million retail and online locations in the U.S.
Two luxury brands merged their loyalty programs in late 2016. Taj Hotels Resorts & Palaces paired up with Shangri-La Hotels & Resorts in Warmer Welcomes, to launch in March. Status matching for Taj’s Inner Circle and Shangri-La’s Golden Circle members is planned, as are seamless redemptions in 200 hotels across 27 countries.
‘Surprise and delight’
Points-based systems won’t go away, but Wyndham’s Brodsky says “subtle devaluation” will continue. “We’re still seeing programs get more complicated and continue to devalue,” he says.?
He bemoans the attention bestowed on “whales,” or top-tier members. “This came from the airlines. They create fake fees that never existed before and then waive them for their elite members. It’s not treating the everyday traveler well.”
Kelly, The Points Guy, says navigating the points-based programs can frustrate consumers. But he’s more optimistic about hotel programs, which have more tools to enhance the guest experience, such as upgrades and amenities, than airlines’. “Hotel execs still believe in surprise and delight,” he says. “Even if you’re not a top-tier guest.”
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