Hotel loyalty programs have grown exponentially in the past year, with a focus on value propositions and member satisfaction, according to executives.
GLOBAL REPORT—As executives at global hotel companies see it, loyalty is a battleground for the hearts—and wallets—of guests, and encroaching from all sides are the online travel agencies, the alternative-accommodations providers and digital empires.
That’s why so much attention is being placed on growing and retaining loyalty program membership.
“I think we’re in an absolute war for who owns the customer,” said Marriott International President and CEO Arne Sorenson during a panel discussion at the recent NYU International Hospitality Industry Investment Conference.
“We have disruptors who are without a doubt trying to take ownership of our customers,” Sorenson said. “I think less about Airbnb than I do about Google and Facebook and these digital empires who own all of us for some things. You can add Amazon to that list, too. They are all trying to say they have a profile for every customer. … Make no bones about it; they want to own our customer.”
The hotel industry’s best weapons are loyalty programs, Sorenson said, and the guest data gathered through those programs.
“What tools do we use to fight back? It’s loyalty data, how we deliver value to our customers so they know it’s in their best interest to be our customer,” he said.
The focus, he added, should be on “monetizing as much of that relationship as we possibly can.”
Speaking on the same panel at NYU, AccorHotels Chairman and CEO Sébastien Bazin said the hotel industry has an advantage over its competitors on this battlefield.
“Google, Amazon, Airbnb have never, ever met the guest,” he said. “They have all the information on me; they’ve never met me. Each of us, we have an interface. That moment of interface gives us very different data and information that is more experiential and emotional that we have to build upon. We just have to take advantage of that moment of sharing.”
Hilton President and CEO Chris Nassetta agreed.
“In a sense, shame on us if we can’t own the customer,” he said. “They sleep with us; they eat with us; they shower with us.”
Sorenson added that what attracts guests and keeps them satisfied is added value.
“We make opportunities for people, but we must deliver value,” he said. “These other platforms are delivering value. Why are we all members of Amazon Prime? Because it’s the simplest way to buy anything in the world. They deliver real value for us in convenience. … We do have tools to deliver value that include the human experience and also loyalty. When you’re driving the majority of your business from your existing customers, that’s a bulwark we can use.”
Integration and data
On a separate panel at NYU, Stephanie Linnartz, Marriott’s global chief commercial officer, talked about the importance the company places on the integration of its Marriott Rewards and Starwood Preferred Guest loyalty programs.
“Our loyalty platform is still absolutely critical to the success of Marriott International,” she said. “We do have 110 million members globally. This summer, we’re combining Marriott Rewards and Starwood Preferred Guest into one program. The points still matter. It’s not just the points … we’re spending a lot of time thinking about other things you can use your points for, experiences being the most notable.”
- Click here to read more about the integration of Marriott’s loyalty programs.
Speaking on the same panel, Ken Greene, Radisson Hotel Group’s president for the Americas, said hotel companies have to be careful not to drop the ball with guest data that’s mined through loyalty programs.
“We talk a lot about creating these memorable moments and customer experiences at the property,” he said. “I think the big missed opportunity for us is when people walk in, we already have that revenue … (but) we do a lousy job of grinding the data in real time … (to) create great experiences consumers want in real time.”
Greene said his company has invested a lot in a transition and renaming of its loyalty program, Radisson Rewards.
“If we spend money to acquire a guest and can’t get them in the loyalty program, shame on us,” Greene said. “It allows us to market to them in very unique ways, (but) it comes back to having the right system and being able to mine the data. To be able to get a single point of entry, single database, scalable system you can build off of, that’s the game.”
Hotel News Now also reached out via email to hotel company loyalty executives, who shared their successes and strategies for growing membership.
Jamie Russo, VP of loyalty programs and customer engagement at Choice Hotels International, said guest engagement has been key to loyalty program satisfaction and growth.
“Listening to and serving our members has been the reason we continue to attract new members and retain them. Not only did we just pass 37 million members in our program, we have more than doubled the number of active and multistay active members,” he said by email, adding that loyalty member satisfaction is at “an all-time high” as a result.
“Here’s an example: Before relaunching our Choice Privileges program, we conducted extensive research,” Russo said. “One insight was that travelers said hotel rewards took too long to achieve. So, when we relaunched the Choice Privileges program in 2016, we included immediate rewards with Your Extras, which provides partner credits, such as gift cards for dining and gas, or points upon member check-in. Plus, these are in addition to all other Choice Privileges benefits.”
That guest research also plays a big part for Hilton Honors, said Mark Weinstein, SVP and global head of customer engagement, loyalty and partnerships at Hilton.
“Everything we do is rooted in research and knowing what is most relevant to our members,” he said. “Our goal is to take the friction out of travel, and in order to do so, we must understand what drives customers to stay with us, whether they’re a road warrior or only with us a few nights per year.”
David Canty, VP of global loyalty programs at InterContinental Hotels Group, said cooperation with the brand is also essential.
“The growth of (IHG Rewards) can be attributed to the loyalty team working closely with our brands to better determine how we best meet the needs of our guests throughout the hotel experience,” he said. “At IHG, we think of loyalty as more than the program. IHG Rewards Club works hand in hand with our brands to provide a great hotel experience, whether they are staying at a Crowne Plaza for business or on a family vacation at a Holiday Inn.”
The benefit of the loyalty program to the brand, he said, is that members “stay more and spend more at IHG hotels,” and the cost of acquiring the guest is lower because loyalty members book direct.
David Flueck, SVP of global loyalty at Marriott, said the same is true for the company’s three loyalty programs—Marriott Rewards, Starwood Preferred Guest and Ritz-Carlton Rewards—which the company will unify by August.
“Members of our loyalty programs, in general, stay more and pay a higher (average daily rate),” he said via email. “They also cost less to retain. This has increased ROI for our owners and franchisees and enticed developers to make new investments.”
Weinstein added that Hilton remains focused on helping its owners to reduce costs, while providing more direct support to the hotels.
“For example, with Hilton Honors, we’re able to fund many of our global promotions, which are the core of our program and one of the biggest drivers of loyalty/repeat business at hotels,” he said.