Holiday Inn owner flags growth of ‘revamped’ loyalty scheme amid rising revenues

Half of all room nights booked in IHG hotels in 2022 were driven by its loyalty scheme, which has grown its membership 27% following its relaunch in April.

Source: IHG Hotels & Resorts via Ogilvy

IHG Hotels & Resorts grew its revenues by around a third (34%) in 2022, while the group behind the Holiday Inn, Kimpton and InterContinental hotel brands invests behind its digital transformation and loyalty proposition.

Group revenues reached $3.9bn (£3.2bn), up from $2.9bn (£2.4bn) the year prior. Revenue per available room also rose 37% globally, but was still down 3.3% on 2019 levels. However, in the final quarter of 2022 revenue per room exceeded 2019 by 4.1%.

While the revenue growth in part reflects the rebound in travel after the lifting of Covid-19 restrictions last year, CEO Keith Barr told investors today (21 February) that the launch of IHG’s upgraded mobile app and the relaunch of its loyalty programme was “critical” in aiding the group’s post-pandemic recovery.

IHG “revamped” its loyalty scheme in April last year, rebranding it as IHG One Rewards. Prior to this, the company had seen that its loyalty members typically spend 20% more than non-members and are nine times more likely to book through the more profitable direct channels.

The new scheme offers a redesigned tiers and points earning structure, and is “powered” by the new mobile app. The multimillion pound ‘Guest How You Guest’ ad campaign to promote the programme followed in August, marking IHG’s biggest campaign investment in 10 years.

According to the business’s latest results, mobile bookings now represent more than half of all IHG’s digital bookings across its 17 hotel brands. Membership of the loyalty scheme is up 27% year-on-year, with members booking half of all room nights in 2022. IHG Hotels & Resorts heroes ‘revamped’ loyalty scheme with biggest campaign in a decade

One of the changes made to the loyalty scheme last year was to allow guests to “craft” their own rewards and “choose how they want to be rewarded,” vice-president of masterbrand strategy and awareness Connor Smith told Marketing Week at the time.

These rewards have been more popular with guests, with 11% more points redeemed in 2022 compared to 2019, and a 16% increase in reward nights booked.

‘Milestone rewards’, which guests can choose after 10 nights stayed in any IHG hotel, also “exceeded expectations”, the company said, with over one million milestone rewards redeemed.

Meanwhile, the Guest How You Guest campaign – designed to bring the IHG masterbrand to the forefront and create a common link between its hotel brands – has “lifted” brand awareness and favourability measures and driven additional revenues to the business’s hotels, it claims.

From a B2B perspective, non-IHG hotels are increasingly attracted to becoming an IHG brand, in part due to the group’s marketing and loyalty programme, the business says. Across the year conversions to IHG brands grew in importance, with 96 signings and 83 openings in 2022, excluding its new alliance with Iberostar.

Overall, the the business grew its operating profit by 27% in the year to $628m (£519m).

While IHG already had a sizeable loyalty programme prior to the launch of IHG One Rewards, Smith told Marketing Week last year it hadn’t been “working hard enough” and wasn’t acting effectively as the “thread” that ties the company’s properties together.

Consumer research conducted by IHG showed people no longer want to to be forced to jump through “arbitrary hurdles” in order to earn rewards.