What's New in Hotel Loyalty Programs

By Colleen Isherwood, Editor

LOYALTY PROGRAMS GROWING IN CANADA AND ABROAD

The loyalty numbers keep climbing. Marriott Rewards and Starwood Preferred guest programs announced last month that they have a combined 100 million members, including Ritz-Carlton members. Here in Canada, there are 2.3 million Marriott Rewards customers, and when combined with the SPG members, the total is more than 3 million members.

Ihg’s Liz Crisafi, head of portfolio marketing, loyalty and partnerships, The Americas, says IHG Rewards Club is the first and largest loyalty program in the industry, with more than 100 million enrolled members globally.

At the end of March, Wyndham Hotel Group, announced it has surpassed 50 million members worldwide, celebrating the milestone enrolment at the newly opened Wyndham Grand Xiamen in China.

Hilton also has more than 50 million members around the globe.

Choice Privileges and Best Western Rewards both boast 30 million members worldwide. Here in Canada, there are more than 1.7 million Choice Privileges members and 2.6 million Best Western Rewards cardholders.

Hyatt has more than 20 million members.

Red Lion’s Ramsey Pruchnic, VP relationship marketing and data management platforms, says the company doesn’t divulge total membership numbers for its Hello Rewards loyalty program, but noted that the program went from less than 100 hotels to just under 1,200 when the company acquired Vantage Hospitality last year.

Experiences, instant rewards and points that don’t expire

Bill Linehan, EVP and CMO at Red Lion Hotels Corp. has described the company’s Hello Rewards as a new, innovative guest recognition program that is disruptive to traditional loyalty schemes, yet more relevant to changing consumer dynamics; less costly and more rewarding with instant gratification.

“Our members always have the best rate guaranteed, and they start earning free nights right away, plus they get all the other fringe benefits including free Wi-Fi and perks with their stay,” added Pruchnic of Red Lion.

“It’s not a tiered program — it’s an approach that starts the minute a guest is staying with us. We consider them loyal on Day 1, and they can get rewards faster than most points programs.”

“It’s well-known that all Canadians are points junkies — they definitely participate in a lot of loyalty programs,” said Dorothy Dowling, SVP and CMO at Best Western.

“Our coalitions with Aeroplan and Air Miles are valued because of their mid-market appeal.

“Our program is the envy of the industry, because our points never expire. That’s a decision we made several years ago, and it makes us unique. Customers view those points as currency.”

Dowling pointed out that another valuable feature is that Best Western is deliberately transparent with customers and their promotions have real value.

“For example, our $10 travel card can help them build toward a weekend or vacation or next stay — these are the richest promos.

“Our Elite tiers have an extraordinary benefit. More than two thirds of customers earn free night redemptions — heavy users are rewarded richly and can get to redemptions quickly.”

In 2016, Choice announced the most significant Choice Privileges redesign in the rewards program’s history, offering members the “Faster Way to Rewards.”

“The enhancements we’ve made are all about helping our travellers earn rewards faster and more frequently,” said Julie Chan-McConnell, senior director, marketing and distribution at Choice Hotels Canada.

Liz Crisafi, head of portfolio marketing, loyalty and partnerships, The Americas, for IHG, said, “Travel is special. It’s something that people dream about, plan and look forward to and a way that they create memories that last a lifetime. We believe that travel should be even more rewarding regardless of the reason, so IHG Rewards Club gives members more of what they deserve: more exceptional benefits, relevant rewards and personal experiences.”

RECENT INNOVATIONS

Marriott Rewards and SPG merger

While Marriott Rewards and Starwood Preferred Guest members can already link their cards for status matching, points transfers and more, Marriott is in the midst of integrating them further.

‘The integration has gone really, really well so far, “ said Michelle Bozoki, director of marketing and digital strategies. “We are very much focused on merging the programs before taking on one larger program.

Marriott still has its work cut out in terms of due diligence, IT systems — linking the accounts and looking at harmonizing offers and messages, said Bozoki.

Over the next year, Marriott will be streamlining the programs so that loyalty offers are consistent with all three. The company hopes to roll out its unified program with one consistent platform and the same partners later in 2018.

Bozoki talked about some of the benefits of integration in the mobile area. For example, Marriott has some of the best mobile check in/out technology, which is available to SPG guests this year. SPG is ahead when it comes to keyless entry – Marriott will roll this feature out to 500 of its hotels by the end of the year.

HHonors now Honors

Hilton has revamped its loyalty program for 2017. The most obvious change is that they are dropping the H in its HHonors program, so that it is now simply Honors.

Hilton Honors is introducing new Points & Money awards where members can (on a sliding scale) mix points and cash. This can be applied towards Best Flexible and Member Only Rates, but certain sale rates are excluded such as those sales in Europe and Asia. Members of the Hilton Honors program can also use points on Amazon.com, and can combine points and cash to redeem rewards.

An Honors member can start a pool with up to 10 other members who then can transfer anywhere from 1,000 to 500,000 points. The member starting the pool can then use the points any way she or he wants, the same way the points from a single member are used.

Hilton also announced a one-time extension of Hilton Diamond Status.

Best Western — immediate rewards

“We are constantly listening to our members, and we came up with the concept of instant rewards — rewarding customers at the point of sale,” said Best Western’s Dowling. “Guests have been trained by Amazon and Google to have that sense of immediacy. We will give out $10 rewards or points — we try to straddle both value propositions.”

The enhancements, to be unveiled at Best Western’s Leisure Travel Summit this spring, mean that Gold members will be recognized at the property level, in addition to Diamond, Platinum and Diamond Elite members. Recognition can include 500 bonus points or two snacks and two drinks, or an instant travel card.

Best Western will also be launching a digital membership card. “I’m passionate about it,” says Dowling. “Guests will be landing on a ubiquitous platform, which makes it more valuable.”

Red Lion: competing with bigger chains

Pruchnic said Red Lion is in the middle of revising its partner networks, integrating a coffee company with the hotels and introducing Hello at Home, which involves redeeming points for room design items such as Red Lion’s own soap, towels and other products available for purchase.

“Now that we are no longer a regional company, we have the opportunity to establish strategic relationships of value to partners,” he said.

Choice enhancements

Some of the enhancements Choice rolled out in 2016 include:

Your Extras: Members receive a reward the moment they check-in for a midweek stay, and can use these rewards throughout their stay.

Keep Your Points: Points no longer expire as long as members stay active.

Digital Gift Cards: Members can redeem points for gift cards they can use immediately.

Flex Rewards: Members can redeem for free nights using fewer points.

10 Points per Dollar: Members earn 10 points per $1 spent at over 5,500 Choice hotels globally.

World of Hyatt

Hyatt’s changed its Gold Passport loyalty program to the World of Loyalty rewards program, with changes that went into effect March 1. There was no change to how guests earn points, what those points are worth and Hyatt still has the same seven redemption categories as before.

With the new program, Hyatt is introducing three elite tiers in place of the current two: Discoverist, Explorist and Globalist. There are a number of new benefits for these upper-tiered customers. Top tier elites will get space available upgrades including to standard suites at check-in in addition to the continuation of four upgrades a year confirmed at time of booking. Staying 70, 80, 90, and 100 nights a year comes with the option of another confirmed suite upgrade or 10,000 points.

Hyatt now has a new benefit for top elites called My Hyatt Concierge. This is similar to Starwood’s Ambassador which SPG awards after 100 nights — a dedicated person to take care of all things Hyatt and stay-related.

IHG stresses personal relationships

“When it comes to loyalty, transaction-based relationships are no longer enough,” said IHG’s Crisafi. “Consumers want meaningful, personal relationships, which is what IHG Rewards Club aims to deliver.

“For some members, unique and memorable experiences, which can range from surprise and delight moments during their stays to curated, invitation-only events such as a VIP weekend experience at the Calgary Stampede, or one-of-a-kind experiences that members can bid on through IHG Rewards Club Auctions, are most valuable,” said Crisafi.

IHG’s Crisafi says their research revealed that recognition is the best reward; rewarding members with experiences that are personally relevant to them is something a member feels and appreciates much more than just earning points. “After all, it’s not about the points you earn but rather what you get for them – by having access to the rewards and experiences you desire. So in 2015 we introduced Spire Elite, our top level of membership, to reward our most loyal members.

“We also utilize our customer relationship management (CRM) system to enable our hotels to know their guests and to respond to member preferences at every stage of the guest journey and offer services and experiences that are personally relevant.”

Recently, IHG updated its IHG app, making it easier to use. And earlier this year, IHG introduced another benefit – the Fuel Rewards program – which offers members savings on fuel at participating Shell stations.

Relationships with OTAs

Last August, Expedia and RLHC began offering RLHC’s exclusive “Hello Rewards” member-only rates on Expedia.com and Hotels.com (in the U.S.), and providing direct member sign-up for Hello Rewards from these sites.

“It’s been great for us,” said Pruchnic. “We have seen our membership base and direct bookings grow. There’s a halo effect — it’s netted out to be a really great move for us. Expedia got us on the radar, but it won’t be our last innovation,” he added.

Best Western’s Dowling said Expedia provides access to customers they wouldn’t necessarily have. “We want to be on every shelf where the consumer wants to purchase. OTAs are great marketing partners. They allow us to carve out opportunities to display our value proposition. The business environment has changed dramatically. We are embracing change and leaning into our partners and our brand with exceptional outcomes.”

IHG has a different approach. In 2016, they introduced Your Rate from IHG Rewards Club, which provides exclusive, preferential rates when guests book through IHG’s direct channels, said Crisafi.

“While third-party booking sites (OTAs) remain an important partner for driving incremental revenue, the best and most cost effective route to booking a room at any of our brands is generally via our direct channels, and Your Rate provides us with the opportunity to strengthen, or create, that direct relationship with our guests.”

“We have very strong relationships with the OTAs and have been partners for many years,” said Marriott’s Bozoki. “That’s mainly because they have such a large reach to customers we would not normally have access to. We try to educate these guests about our awards program, ultimately for them to enjoy our loyalty program and get them to book direct. The perception is that you can get the lowest rates on the OTAs, while you actually get the lowest rates by booking on Marriott’s direct channel.”

Marriott works to convert OTA customers by taking advantage of every touch point, before, during and after the guest’s stay, said Jen Bryl, director loyalty marketing and CRM. “At the front desk, an associate gets their email and starts to engage. The guest gets to experience some of the value of Marriott Rewards on property, such as free Wi-Fi. Communication is paramount — there’s broader awareness on television, and references to Marriott Rewards at the front desk, at the restaurant — using every kind of channel.”

“In the fall, we launched our Choice Privileges Member Rate; members have access to exclusive rates when they book directly on our website or using our mobile app,” said Chan-McConnell.

GOALS AND THE FUTURE

Chan-McConnell thinks the new Choice Privileges is resonating with guests. “Following the redesign, worldwide membership grew by three million in just seven months. Choice Privileges also received the ‘Best Loyalty Program’ distinction on USA Today’s 10 Best Readers’ Choice Award list.

“If the changes we’ve made help our guests travel more easily to visit their friends and family, then I think we’re heading down the right path,” she said.

“Our vision for IHG Rewards Club is to create the most relevant and rewarding relationships with our members by delivering meaningful benefits and personal experiences that they can use at every stage of their travel journey,” said Crisafi. “This means we will continue to evolve our program to meet the needs of our guests and what is most important to them.”

“We will be having a lot of conversations about loyalty at our District Meetings,” said Best Western’s Dowling. “I believe in humanity, bringing forth name recognition and thinking of patronage. Every Guest, Every Time is our motto — those meaningful touches are also part of our loyalty program.”

“The Hello Rewards program is in its infancy — it’s a two-year-old program and it hasn’t even spread its wings yet, said Red Lion’s Pruchnic. Red Lion now has RevPak, a technology suite with deep integration with all third party partners. “We have data flowing from every operating system and property system. We believe in data driven marketing, and more understanding of our customers. We can get more partnerships that make sense to consumers based on actual data.

“We’re here to disrupt and challenge the status quo, and management has embraced that. We don’t have to do things the way they were — we can challenge the industry, and we’re doing it!”

Perhaps Marriott’s Bryl put the company’s goals for the future most succinctly.

“We don’t necessarily want to be the world’s biggest travel program — we want to be the favourite” she said.