Viewpoint on hotel loyalty programmes
Stuart Evans, general manager at International Customer Loyalty Programmes
Hotel loyalty programmes are dominant in the hospitality business travel sector – Marriott states that more than half the bookings made on its website have a Marriott Rewards number attached.
Business travellers are the most valuable customers and – as these customers often have a free choice – hotel programmes can make all the difference. Hotels have products that can be highly rewarding; the combination of an aspirational core product and customers who are spending corporate funds means hotel loyalty propositions have a great opportunity to influence behaviour.
Hotel loyalty programmes could look to other industries for best practice in loyalty. Hotels often have a disparate message between their brand and loyalty programme, while brands like Coca-Cola often execute successful customer relationship programmes against their strong brand message. It is down to loyalty programmes to bring the brand promise to life and support this with tangible added value for its members.
For all loyalty programmes, the key to success is creating value from customers through data-driven marketing. It is exceptionally hard to convince members to have an extra stay in a hotel, so making more money from members who do stay is almost as much a priority as increasing sales.
Most major hotel programmes are currently aggressively offering ‘extra nights free’ after just one or two stays. These promotions are tactical to drive guests into hotels during the downturn, but with the bonus of capturing new customer details for future marketing.
Success in loyalty comes from having a clear strategy. Marriott Hotels is a good example of a brand that has built and re-engineered its business around customers and relationships. InterContinental Hotels Group has invested in building the value of the Priority Club, subsequently growing the membership base to 44 million. And Radisson’s Goldpoints Plus programme is a good example of a hotel brand using the attractiveness of the core product, such as its premium city hotels, RadissonBlu, and its 5-star resorts.
Ultimately, though, a loyalty programme in any industry will only be successful if customer data is scrutinised to fully understand customer behaviour and trends. This will create a unique value proposition and without this differentiation and data for analysis, there is little to be gained from running a major loyalty operation.
IHG hotel brands
This is positioned as an upscale brand for business and leisure travellers. There are 357 hotels with 121 in the pipeline. IHG is looking to differentiate this brand further in order to make it stand out among its rivals. In different parts of the world, the hotel has a slightly different positioning. In Asia, its estates compete in the upmarket end of the hotel sector; in the US, it’s perceived as slightly less upscale. In the UK, it is solidly upscale and considered among business travellers to be a premium hotel.
InterContinental Hotels & Resorts
IHG positions this brand as the most prestigious in its portfolio. There are 158 hotels across 60 countries, with another 67 in the pipeline. The brand is committed to building a presence in the Middle East, including opening one hotel in Pakistan this year.
Holiday Inn is having a $1bn makeover set for completion by the end of 2010. The relaunch includes introducing a signature scent of ginger, white tea, citrus and musk into the lobby. There are 1,319 of these mid-market hotels across the globe trading under the Holiday Inn name, with 364 more hotels currently planned.
Holiday Inn Express
The Express brand is IHG’s budget offering, with 2018 hotels open and 631 planned. It is also part of the Holiday Inn relaunch. Holiday Inn Express is marketed as a “convenience” hotel and one of its unique selling points is the breakfast bar where each country has a signature food item. The Express’ signature scent is sweet grass and green tea.
Indigo is IHG’s “affordable” boutique offering and each hotel is localised to fit in with the surrounding environment. There are currently just 28 of these hotels, with one recently opening in London.
There are 167 Staybridge Suites that are promoted as high end ‘extended stay’ locations. Rooms are equipped with kitchens and there are also hotel facilities, such as a breakfast buffet and a gym. These are mainly US-based with a couple of hotels open in Europe and also one in Egypt’s capital, Cairo.
This mid-scale longer-term stay hotel brand is in the US and Canada. There are 229 rooms with 209 more in the pipeline.
Source: IHG, June 2009 figures. In 2008, IHG opened nearly two new hotels every single day.
Notes on Tom Seddon
Left IHG in 2004 to take up a position at Subway and returned in 2007 becoming full-time CMO.
Holds a bachelor’s and master’s degree in electrical and electronic engineering from the University of Bath in the UK.
An American citizen.
Favourite signature breakfast item at Holiday Inn Express is the US cinnamon roll.