Loyalty Traveler – Hotel Loyalty for the 2%

Loyalty Traveler – Hotel Loyalty for the 2%

The spotlight is on hotel loyalty elite members in 2012. According to Starwood CEO Frits van Paasschen, just two percent of travelers drive 30 percent of Starwood’s profits. Not surprising then is the fact that the primary beneficiaries of the major loyalty program changes announced so far this year are the two percent.

Hilton HHonors goes Full Service

Hilton HHonors enhanced elite benefits at 800+ Hilton, DoubleTree and Conrad hotels. Diamond elites now get all benefits including room upgrades up to suites, bonus points, continental breakfast and executive lounge access. HHonors Gold elite members have the benefit of a preferred room upgrade and the option of breakfast each morning or 1,000 points each stay.

Starwood Preferred Guest for Life

Starwood Preferred Guest enhanced its elite program effective March 1, 2012 with new SPG Platinum member benefits. A free continental breakfast each morning of your hotel stay is a new Platinum welcome amenity option in lieu of bonus points or a local gift. SPG Platinum members staying 50, 75 and 100 or more nights a year have additional tiered benefits including 10 suite night awards confirmable at five days prior to arrival, higher earning rate at four points per dollar and 24 hour check-in availability with checkout time guaranteed 24 hours later. The most frequent elite guests are assigned a Starwood Ambassador–a personal concierge for travel planning needs.

SPG Lifetime Gold (250 nights and five years SPG elite membership) and SPG Lifetime Platinum (500 nights and 10 years as SPG Platinum elite member) offer members achievable goals incentivizing long-term loyalty to Starwood Hotels. Lifetime elite requirements are within reach for even not-so-frequent business and leisure guests with 20 to 30 nights of hotel stays annually over 10 to 20 years. Hyatt requires far more spend and Marriott Rewards far more nights to reach comparable lifetime elite membership tiers.

Exclusivity marketing

The hotel industry major chains have refined loyalty marketing segmentation of customers. Segmentation in hotel loyalty marketing may be positively or negatively distancing you from the pack. Exclusivity is a pattern I see spreading across the hotel industry. Exclusivity marketing may transform hotel loyalty programs into “profitable guest” programs.

Hyatt Gold Passport offers 25 percent more bonus points for Hyatt credit card members in its current global promotion. Hyatt Visa card excludes non-U.S. residents. No 25 percent bonus for you.

Hilton HHonors American Express card members have access to four-night AXON award stays at Hilton category-7 hotels for 145,000 points. That is a 27.5 percent discount on four standard award nights. The HHonors elite member four-night VIP award at 170,000 points is only a 15 percent discount. The HHonors credit card member with few hotel stays has a better hotel award option than HHonors Diamond elite members without the card.

Ritz-Carlton Rewards Free Night Promotion

Ritz-Carlton Rewards members have a high value promotion Feb. 1-April 30, 2012 to earn one free night at a Ritz-Carlton Tier 1-3 hotel after two stays at any Ritz-Carlton. Marriott Rewards members are excluded from this promotion offer. Marriott International excludes its own customer base from its own luxury brand promotion.

98% Losing Ground to Points Inflation

IHG Priority Club, the world’s largest loyalty program by membership, added new award tiers to all its hotel brands on Jan. 18. Free night awards at more than 1,000 hotels worldwide increased. Many Crowne Plaza Hotels now cost 40 percent more points.

Priority Club is giving members until March 18 to redeem points at the old award rate, yet there is no published list of changes for members to see which hotels increased or decreased award tiers. Priority Club claims 20 percent of its hotels went down in award cost, yet with no master list, this claim remains a factoid awaiting verification. Members need to call customer service to check the former award tier for any specific hotel.

Members can expect more hotel award cost increases from Marriott Rewards and SPG when these programs unveil annual hotel award category shifts. An upward trend is expected due to global room rate growth in 2011 and the high confidence in the hotel industry that guest occupancy will remain high and rates will continue to rise in 2012.

Hotel life at the top of the loyalty membership pyramid is more rewarding for the two percent in 2012. Unquestionably these members deserve elite enhancements for their frequency and profitability. Just don’t neglect the base and low-tier elite members who seek program enhancements like free Internet, hotel award discounts and good value points promotions. Award night cost increases combined with promotion exclusions offer limited loyalty incentives for millions of hotel guests who comprise the 98 percent membership base of hotel loyalty programs and rarely experience the hotel suite life.

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