Hotels.com criticises rivals’ ‘convoluted’ loyalty programmes

The hotel booking website launched its Welcome Rewards programme in the US in 2008 before bringing it to Europe four years ago. It offers customers the chance to book 10 nights and get one free and has recently passed 10 million members, as well as the 1 million free nights milestone.

Speaking to Marketing Week, Matt Walls says the programme’s simple premise has powered its success.

“We operate in an environment where big hotel chains have complicated, convoluted loyalty programmes that customers struggle to understand. We stripped that away and came up with something deliberately simple,” he says.

He says the firm is now hoping to expand the scheme by making it accessible to a larger part of its hotel base. Hotels.com will also target customers in Europe, Asia Pacific and Latin America, putting loyalty at the “centre” of its marketing message as it looks to get to 10 million members in each of the regions where it operates.

“Loyalty will be central to our messaging going forward. We want to increase aggression in how to promote it,” he adds.

Walls believes Hotels.com’s loyalty scheme is increasingly important in helping the firm stand out as it faces competition from rivals such as Laterooms.com and Booking.com. He says it is also a useful tool in justifying the company’s role in the booking process.

Hotels.com is a middleman between hotels and customers and doesn’t actually own any hotels itself. Walls says that makes it essential for the company to build loyalty, both via the quality of its service and by giving something back to customers through Welcome Rewards, particularly as acquiring new customers online becomes increasingly expensive.

“When we started out we thought we were the masters of online marketing through Google paid search. That marketplace is now very crowded and with crowded comes expensive. We had to move the needle towards retaining customers. Loyalty is fundamental to our overall business economics,” he says.

Walls says a lot of Hotel.com’s marketing budget still goes on search and branded affiliates to ensure the service is in people’s short list when it comes to booking. It also has a strong presence on TV at key holiday buying times, such as January and between May and July, which Walls claims offers the brand a “trust element” that online marketing channels don’t.

He adds that Hotels.com is currently reviewing its brand positioning and is looking at launching refreshed creative before the summer. In the US, the company has just launched a new campaign featuring brand ambassador “Captain Obvious”, based on the fact that given its name Hotels.com should be an obvious choice for hotel bookings.

While Walls admits this is not a character that would work outside the US, he suggests the fundamental idea around the name Hotels.com being obvious is “universal” and it is considering bringing it to Europe.