Hotels are beefing up their hotel loyalty programs.
A handful of travelers recently received a dream invitation: Join a group of 12 at a 16th-century Tuscan villa for a week of touring private wine cellars and truffle hunting, as well as a gala dinner hosted by the winemaker Leonardo Frescobaldi.
The brainchild of a high-end concierge service? More like a product of the newest wave in hotel loyalty programs. The trip was presented exclusively to members of the Leaders Club program from the Leading Hotels of the World, which offers benefits at the collection’s more than 430 properties. It reflects a growing trend among hotel companies—particularly at the luxury level—to create or expand loyalty programs with a renewed focus on members-only perks.
The trend took off during the recession as luxury hoteliers looked for ways to stop travelers from defecting to less pricey brands. But as corporate travel (and, with it, the health of the hospitality industry) begins to bounce back from its 2009 lows, travelers’ demand for value hasn’t slackened. Even as hotels inch their rates back up, they continue to compete for travelers. The weapon of choice: loyalty programs that do away with complex points systems and instead create unique experiences.
Last year saw the launch of the Ritz-Carlton Rewards, which offers members not only standard perks (upgrades; Internet access) but also more-elaborate perks such as private tours with Abercrombie & Kent. Just a few months ago, the new Global Hotel Alliance of 12 smaller brands (Omni, Kempinski, Doyle, and Anantara, among others) launched its GHA Discovery program. Members earn opportunities to redeem a “local experience” at a GHA hotel, which includes everything from a Maldivian drumming lesson at the Anantara Dhigu resort to a backstage tour of the Peking Opera Theater through the Kempinski Hotel Beijing Lufthansa Center. Even Hilton is rebranding its legendary HHonors program to focus on the access it gives guests to experiential rewards, which include everything from lift tickets at Intrawest ski resorts to hot-air balloon rides over the Provençal countryside.
Phillip Logsdon, director of loyalty marketing for the Leading Hotels of the World, says that the Leaders Club’s model of rewarding every five stays with a free night is a direct response to complicated, capacity-controlled points programs “that require an engineering degree to use.” Indeed, a recent survey of 36,000 travelers by Zurich-based loyalty solutions provider Loylogic found that travelers, frustrated with accumulating points they weren’t able to redeem, are now demanding more unique rewards and attainable perks.
The entry-level benefits at most of these new programs resemble what you’d expect from traditional loyalty clubs—free Internet and breakfast and the ability to earn early check-in, room upgrades, and stays. But reach the upper tiers, and it’s a whole different story. Chris Gabaldon, the chief sales and marketing officer for Ritz-Carlton, views the program as “a gateway to opportunities,” such as photography workshops with National Geographic Expeditions. Similarly, highest-tier GHA members staying at the Marco Polo Gateway Hong Kong, for example, can learn to care for pandas at the city’s storied Ocean Park. The Leaders Club’s highest level costs $1,200 annually, but comes with guaranteed upgrades at the time of booking, global concierge service, and access to 600 airport lounges worldwide.
Independent hotels are also finding ways to lure loyalty-minded travelers. Members of M Life Players Club, the new program from MGM Resorts International, earn “moments” like the chance to choose the Bellagio fountain playlist.
Some top-tier hotel groups, such as Four Seasons, have traditionally resisted the loyalty model, saying that perks like personal recognition should be de rigueur in a good hotel. But Caryn Kboudi, spokesperson for Omni Hotels (a member of GHA), says one benefit of the new alliances is their ability to share your preferences with one another and widen your net of benefits. Most important, the hotel alliances say, the simpler new programs represent a shift in thinking: they actually want you to claim your rewards. Chief financial officers have traditionally loved it when people accrued points and never used them, according to Steven Landuyt, Loylogic’s global head of sales. But now they’re realizing the potential of these programs to develop relationships with travelers—a strategy that ultimately rewards both hotel and guest.
