Loyalty programs have been an integral marketing tool for hotel operators for decades. But a lot has changed from the days of collecting points for free rooms or airfares. Today’s operators are learning how to be all things to all people, partnering with credit card payment processors, airlines, retailers and entertainment venues among others, to offer a wide array of lifestyle benefits to suit individual guests’ needs.
Loyalty programs started out very transactional in hospitality, says Matt Vaccarella, senior director, Loyalty Strategy and Customer Engagement, Radisson Hotel Group Americas in Seattle. “If you stayed at our hotel or flew on our airline, you would get this many points or air miles to redeem for a hotel stay or flight. The nice thing was it was easy to understand. The shortcoming was it wasn’t very personal and too one dimensional.”
Fast forward to today and loyalty programs have evolved considerably. Now, hotels have established partnerships with many other verticals to offer multiple ways to collect (such as co-branded payment cards) and redeem points for upgrades, food-and-beverage services, gift cards, car rentals, retail purchases, airline miles and more. “That has really expanded the value proposition,” says Vaccarella.
Hilton, for example, has partnered with rideshare partner Lyft, as well as car-rental services Alamo, National and Enterprise. “We also have a unique partnership with Live Nation so Hilton Honors members can use their points on Ticketmaster.com and LiveNation.com to access thousands of entertainment events,” says Jenn Chick, senior vice-president and global head, Hilton Honors and Customer Engagement in Arlington, Va.
“How customers engage with brands is changing, so a successful loyalty program has to constantly adapt to customers’ changing expectations,” says Sabrina Lillew, Accor’s vice-president, Loyalty Programs, North and Central America in Toronto. “Our research showed that 51 per cent of our members were most passionate about dining, followed by entertainment and sports at 40 per cent each.” Accor’s ALL- Accor Live Limitless lifestyle loyalty program spans more than 4,100 hotels and 37 brands across 110 countries and has more than 68 million members.
In April of this year, IHG launched its new IHG One Rewards, a customer-focused global loyalty program that covers 6,000 hotels in more than 100 countries. “As the world evolved, so did we,” says Heather Balsley, senior vice-president, Global Loyalty and Partnerships, IHG Hotels & Resorts in Atlanta, Ga. “The last few years have brought about tremendous change, particularly across the travel and hospitality industries. We felt it was an opportune time to dig deeper and uncover what guests truly want from a loyalty program.”
One of the key takeaways from IHG’s research was that the most sought-after perks are room upgrades and free breakfast, followed by member discounts, flex and bonus points, food and beverage credits, and lounge access. “We also learned how important it is to offer convenience and accessibility throughout the process, so we rolled out our mobile app that allows guests to stay informed, check in faster, and connect to our hotels and travel with greater flexibility.”
The Hilton Honors app, which allows members to check in, select their room, and access their rooms using Digital Key, now includes a Digital Key Share feature that allows more than one guest access to their room, as well as automated complimentary room upgrades.
Vaccarella stresses that a diverse and multi-brand loyalty program serves as a powerful marketing tool. “Programs today are so personalized we are able to communicate offers that make the most sense to the individual. It’s not just about knowing their name and the last time they stayed. We know how they earn and redeem points, where they like to travel, and what they spend. With that, we can tailor benefits and rewards that meet their wants and desires. If I can spend my marketing dollars precisely on individuals that have engaged or fit the profile but haven’t yet, we know how to talk to them.”
Diverse programs also served the industry well during the pandemic. In many cases, hotels adapted their loyalty programs to ensure member loyalty, extending expiration deadlines on points, among other concessions. Hilton for example, expanded eligible spending for co-brand credit card members, and allowed members to automatically roll over nights to count towards their future tier-status qualification, says Chick.
Vaccarella says customers were happy to continue to collect and redeem points in the form of gift cards, restaurant meals and retail purchases. “Non-travel redemption options became especially popular during the pandemic. They helped to keep our members engaged with the program at a time where they weren’t travelling. The past two years really showcased the value of the program for us and our members and helped us continue with our business.”
“People who couldn’t travel came to appreciate the ability to earn reward points in restaurants and bars without having to be a guest in the hotel,” says Lillew. “They recognized loyalty goes beyond the stay. ALL has broken down the hotel walls and made our rewards part of their day to day lives.”
By Denise Deveau