Brand CEOs detail evolution of their loyalty programs
 
Brand CEOs detail evolution of their loyalty programs
13 MARCH 2017 7:34 AM

Hotel brand CEOs had much to say about changes and new offerings in their guest loyalty programs during their fourth-quarter earnings calls.

REPORT FROM THE U.S.—Hotel brand companies continue to push and develop their loyalty programs and offerings, seeing them as a way to attract new guests and retain those who have stayed with them before.

During the 2016 fourth-quarter and full-year earnings calls, brand CEOs and presidents shared details about their respective loyalty programs, including new offerings and some behind-the-scenes info about the merging of two major programs. Here’s some of what they had to say:

Mark Hoplamazian,
president and CEO,
Hyatt Hotels Corporation
   
Chris Nassetta,
president and CEO,
Hilton
   
Arne Sorenson,
president and CEO,
Marriott International
Keith Cline,
president and CEO,
La Quinta Hotels Corporation
 
Steve Joyce,
president and CEO,
Choice Hotels International
 

Mark Hoplamazian, president and CEO, Hyatt Hotels Corporation, about the launch of World of Hyatt and winning over Starwood Preferred Guest members: “Well, I can tell you that the activity that we've had under way to launch World of Hyatt, which launches on March 1, has been at a peak level. So there's been a lot of engagement with the marketplace. And the fact is that there will be further shakeout or dynamics, if you will, of changes in how people approach their loyalty customers.

“Our philosophy has been to focus on building a platform of experiences which is resonant to our high-end customer base, because we're focused on the high-end customer. We have had success in welcoming a number of high-rated (Starwood Preferred Guest) platinum members who have grown with us in terms of their stay patterns and behaviors over time.

“And we are not just focused on that customer cohort, but rather the whole customer segment that is the high-end traveler that's looking for unique experiences. So that's really the new platform, which is World of Hyatt, and that's the philosophy that we're following.”

Chris Nassetta, president and CEO, Hilton, on new Hilton Honors offerings: “While our scale, size and industry-leading brands and commercial platform continue to drive strong unit growth, similar attributes are also driving tremendous growth in our loyalty program. Hilton Honors added 9 million members last year, bringing total memberships to over 60 million members. For the full year, Honors members drove 56% of system occupancy, representing a year-over-year increase of nearly 400 basis points. By ensuring that all of our customers get the best value and the best experience through Hilton Honors, they are much more likely to have a direct relationship with us. Our digital channels, including website and mobile bookings, continue to outpace other channels on share growth, up more than 200 basis points year over year.

“In the quarter, web-direct as a share of all bookings was nearly 30%. We also launched a number of enhancements to our loyalty program just last month that we believe will make the value proposition even greater for our members.”

Arne Sorenson, president and CEO, Marriott International, on integrating Marriott Rewards and SPG loyalty programs: “The technology work is underway, there are two separate technology platforms, and we've got to do the work necessary in order to have one platform. It is possible we could have one platform with two different programs sitting on top of that platform depending on where we are with our partners.

“We've also then got a whole bunch of questions around the customer proposition, the programs have somewhat different rules around qualification for elite level, around the elite bonuses, around other things and we want to work through with our customers. And then of course, we've got the credit card and timeshare companies. And there are some issues which are relationship-driven and some that are contractual-driven. But we're going to work through those.

“You certainly should not expect that we will have one program anytime in 2017. Whether we will in 2018 is something we will work to maximize the chances for, but we don't have a date to give you yet.”

Keith Cline, president and CEO, La Quinta Hotels Corporation, on loyalty program innovations: “Last year, La Quinta Returns was ranked in the top five by ‘U.S. News & World Report’ as the best travel rewards program. We have launched several exciting and innovative enhancements to the La Quinta Returns loyalty program that include new ways for La Quinta Returns members to engage with the program and our brand on a regular basis.

“In addition, new programs such as Redeem Away, an industry first, and Instant Free Nights as well as thousands of aspirational travel hotel choices were added to the La Quinta Returns loyalty program, so that our repeat guests get rewarded for their loyalty with outstanding features and benefits and new guests will be attracted to the La Quinta brand.

“With these new programs, we are encouraging our members to engage with the brand more frequently and to be able to enjoy their benefits as soon as their first day with La Quinta. We have a great deal of work ahead and our team is energized and committed.

“La Quinta has a strong history and a loyal customer base. We believe that our focused efforts and investments in our key strategic initiatives will drive value, and we are encouraged by the early positive results we’re seeing.”

Steve Joyce, president and CEO, Choice Hotels International, on results of Choice Privileges redesign: “At the beginning of 2016, we announced our company's most significant redesign of Choice Privileges, and it is paying off in spades. The program surpassed 30 million Privilege members and signed up 4.6 million in 2016, more than any other year in our history. In addition to the immediate products Choice Privileges delivered to our guest, we launched exclusive member rates in 2016, enabling visitors to choicehotels.com and our mobile apps to access discounted member rate that can't be found anywhere else on the internet. In addition to the positive impact this has to fill rooms, it has also increased the contributions generated by our proprietary reservation systems up 240 basis points from last year to over 50%.

“More importantly, while this had a positive impact in 2016, we are not going to stop here. This year you will continue to see us leverage Choice Privileges to deliver value to our guests and franchises. These initiatives among others are delivering great results for Choice in our franchises and helping us drive RevPAR performance over our competition. Our next drive is our accelerated growth and performance in the upscale category specifically expanding our Cambria and Ascend brands. Choice recognized the growth opportunity to spend in the upscale segments with a focus on major urban markets. We had made a significant amount of investment behind the Cambria brand to score developer interest, and this move is paying off.”

Steve Holmes, CEO, Wyndham Worldwide, on how guests have changed how they use the loyalty program: “The fact is we haven't seen a big change in the type of customer taking Wyndham Rewards, but we have seen a change in the way they use Wyndham Rewards. Historically, the Wyndham Rewards program, which was not a powerful loyalty program, it was more of a rewards program. People would use their points to get things like Home Depot cards, and it was more focused on what they could get short-term.

“There has been a dramatic shift in that towards using our product, which is the whole purpose of a loyalty program. So, I think the reset that the team did there was brilliant. It's got a lot of attention. It's been ranked very highly. But more importantly, it changed the way people use the program. So, yes, we are seeing a dramatic increase, and I don't have numbers to quote to you right now, but a dramatic increase in the usage of our product, our hotel product versus people using the points for something outside of our ecosystem.”

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