With pressure coming from OTAs, home-sharing platforms and an unprecedented level of brand proliferation, the global hospitality market has never been more competitive. As a result, earning customer loyalty has also never been more challenging, and hotel companies are pulling out all the stops in their efforts to attract repeat guests and drive direct bookings.
Once a relatively straightforward concept, with hotels offering guests points with each stay and guests then able to redeem points for free nights, programs have changed significantly in recent years, growing larger in size and broader in scope.
They’re also more ubiquitous than ever. According to the 2017 J.D. Power Hotel Loyalty Program Satisfaction Study, the average hotel guest is a member of 3.25 hotel programs.
“Nowadays, loyalty is in your everyday life, whenever you travel, at your favorite store and the grocery store,” said Dave Canty, vice president for global loyalty programs at InterContinental Hotels Group, whose program has expanded to roughly 120 million members. “In some cases, people don’t even realize they are members of a loyalty program. Greater awareness of loyalty programs enables us to actually engage with members at the beginning for their travel selection and build relationships with them over time. That’s critical for us.”
As loyalty membership continues to expand into the mainstream, the programs have also spawned a subculture of loyalty-focused fanatics, who, like their miles-obsessed airline loyalty program counterparts, look to maximize their points earnings and redemptions. While these superfans have proven to be valuable allies, often sharing information on their favorite programs or redemption deals on blogs or online forums, they’ve also been highly critical of the evolving loyalty landscape.
Gilbert Ott, founder of loyalty-focused travel blog God Save the Points, said, “For the median customer, the foremost concern is still how quickly they can earn that free night. But then you also have this segment of business travelers and other high-level users, and of course, they still care about that free night, but they get much nerdier about the benefits, and things like free breakfast, late checkout and suite upgrades are much more important to them.”
Merging programs sparks controversy
Few programs have stirred up as much controversy recently as Marriott International’s Marriott Rewards, which made headlines when it merged with the Starwood Preferred Guest (SPG) program earlier this year in the wake of Marriott’s acquisition of Starwood Hotels and Resorts in September 2016. The newly integrated program, which concurrently added Marriott’s Ritz-Carlton Rewards, is now one of the largest, with more than 110 million members, an unparalleled portfolio of 29 brands and more than 6,700 participating hotels worldwide.
