At its annual conference, this year in Las Vegas, La Quinta Holdings executives shared details on new enhancements to the company’s loyalty program and a renewed focus on the quality of its hotels and real estate ventures.
LAS VEGAS—La Quinta Holdings has a new CEO at the helm and recently outlined some high-level growth strategies for the future during its 2015 earnings call last week. This week at the company’s annual conference, executives shared more details on those initiatives.
Much of the company’s plans are focused on the core themes of product quality, the importance of guest loyalty and technology—particularly on the mobile platform.
President and CEO Keith Cline told conference attendees that while change is always to be expected in the company and the industry at large, La Quinta remains committed to its core values and culture.
“2015 saw some changes for us, but through it all the true constants in our business guided us,” he said. “2015 was a year in which La Quinta showed its true colors. You held fast to our core values.”
That won’t change moving forward, he said.
“Over the long term, companies that have strong cultures and companies that are values-based organizations deliver higher returns for investors,” he said.
At the conference and on the company’s recent earnings call, Cline showcased the company’s recent unit growth. Highlights include signing 107 new franchise agreements in 2015 (the highest number since 2008), growing the company’s pipeline to 228 properties (also an annual record since 2008) and growing its footprint in Mexico and Central and South America, where approximately 12% of the company’s pipeline now sits.
With that base in place, Cline said the company’s goals in 2016 are “to move deliberately and quickly” to execute some key initiatives:
- an accelerated renovation plan for the company’s owned hotels;
- executing on a new comprehensive real estate plan;
- enhancing the company’s operating model; and
- revitalizing the company’s loyalty program.
The conference buzzed about enhancements to La Quinta Returns, the company’s loyalty program. Chief Marketing Officer Julie Cary and VP of Loyalty Marketing Dave Sims outlined three big changes to the program.
“We’re relaunching LQ Returns this year, and we’ll be the best loyalty program and provide the best guest experience in the industry,” Sims said.
The first enhancement targets what Sims called the “millionpointaires,” or extremely high-level loyalty members. Through a partnership with Points.com, La Quinta now offers Returns members the chance to redeem loyalty points at high-end hotels and resorts—including overseas locations—that belong to other brands.
“We get requests for (loyalty members) who want to stay at resorts, or go overseas, where we don’t have hotels,” Cary said. “So through this partnership, which is live, customers can redeem points and stay at these places. We’re picking out a good assortment. Obviously no hotels in our segment or competitors, but we wanted major resort destinations and worldwide locations.”
The second enhancement will allow guests to immediately redeem loyalty points for a free night anytime, administered through the La Quinta app.
“This is an industry first,” Sims said. “It’s a game-changer, for the guest and for the property.”
The third enhancement is secret and is designed for what Cary described as “bleisure-bound travelers.”
“LQ Returns points are going to have immediate value, and they’ll be able to be used at stores, restaurants, gas stations and more, and it’ll all be done over the phone,” Sims said.
Company executives remained tight-lipped about additional details or even a launch date.
The company this year is launching an accelerated renovation program for its owned assets to improve product quality.
At the end of 2015, the company had 886 total properties, 545 of which are franchised and 341 that are corporate-owned hotels.
This renovation program has the company spending $60 million over the next two years to renovate more than 100 properties each year.
“We’re going to increase the scope of work on each asset,” said Rajiv Trivedi, EVP and chief development officer. “With this approach, our ultimate goal is that within two years we have tremendous consistency in our product.”
The company also is embarking on a program to divest itself of some of its owned assets.
“We’re going to dispose of some of the products that don’t fit,” Trivedi said. “Then after that, we’ll remain opportunistic. When it comes to earnings, our company-owned assets are still significant to continued success in our future.”
Another product quality endeavor involves rebranding the company’s hotels in Mexico, Central and South America, where they will be known as “LQ Hotel” or “LQ Hotel by La Quinta” in an effort to boost awareness.
Focus on mobile
The common underpinning to all of these strategies is a mobile-first mindset, executives said.
Ted Schweitzer, La Quinta’s SVP of marketing and e-commerce, said 35% of the company’s site traffic in 2015 was on mobile devices, and mobile reservations grew by nearly 80%.
Cary said because company data showed the most active users of La Quinta’s app were its loyalty program members, the company is relaunching its app to focus on La Quinta Rewards. As such, much of the company’s loyalty amenities will be administered through the app.
That focus on a mobile-first environment is paramount throughout the organization, executives said, even though traditional desktop and call center channels will continue to contribute meaningful traffic.
The company continues to invest in core technologies to support all of its new initiatives, Chief Information Officer Vivek Shaiva said.
“Our focus is always to deliver results, powered by big data on one end and mobile on the other,” he said. “Franchisees know mobile is important, and they’re asking for more. Any new system we deploy, we’ll look at cloud-based options first.”