Hotel Loyalty Programs Missing Out on Co-Branded Credit Cards

Hotel Loyalty Programs Missing Out on Co-Branded Credit Cards

Results from Phoenix Marketing International’s recently released Hotel SCORES study examined the usage and appeal of co-branded credit cards among members of hotel frequent guest programs. Among those hotel frequent guest program members who do not currently possess a co-branded credit card, approximately one in 10 expressed a very strong interest in obtaining a hotel program co-branded credit card in the next six months. The study also found that while 10 percent of all hotel frequent guest program members claim to have a co-branded credit card, 80 percent of those possessing a co-branded credit card are elite-level members in at least one hotel frequent guest program.

Phoenix’s Hotel SCORES study surveyed nearly 4,000 members of more than a dozen hotel frequent guest programs.

“Hotel SCORES was designed to fill a void in the industry knowledge bank by focusing on not just the upscale hotel programs, but also on those programs offered by the moderate and economy lodging segments,” said Greg Diaz, vice president — Travel Research Group at Phoenix. “In addition, by focusing on airline and auto travelers, Hotel SCORES gives a more complete picture of the perceptions and value of hotel frequent guest programs.”

According to Diaz, the credit card issuers and hotel frequent guest programs are not efficiently targeting potential credit card subscribers in their direct marketing programs. Diaz believes that the credit card issuers and hotel frequent guest programs need to re-evaluate their list selection criteria for direct mail acquisition programs.

“Direct mail acquisition of new members can be expensive … especially if it is not targeted to an audience that will respond positively to an offer. Too often we see examples of expensive ‘mass’ rather that specifically targeted ‘class’ mailings,” Diaz said.

The Hotel SCORES study shows that hotel frequent guest programs engender a level of loyalty to hotels — two out of five frequent guest members claim that programs influence their hotel selection most or all of the time. As travel frequency increases, the loyalty commitment to the program also increases. In an effort to build on and enhance these loyalty phenomena, Diaz argues the credit card issuers and hotel frequent guest programs should be targeting these loyalists and those on the cusp.

The Hotel SCORES research shows a greater interest in acquiring a co-branded credit card among those committed to a program (loyalists and elite members) than among the general program membership or non-members in a program.

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