Hotel Loyalty Programs – Are Your Customers Feeling The Love Or Asking For A Divorce?

Posted on July 23, 2012

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According to a study released by The Chief Marketing Officer Council, “The Leaders in Loyalty: Feeling the Love from the Loyalty Club“, 54 percent of the consumers surveyed let it be known that thanks to the barrage of irrelevant messages, low value rewards, and impersonal engagements, they aren’t feeling the love.  In fact, they are thinking of asking for a divorce.

The study suggests “The reality of today’s loyalty landscape is that too many rewards, points or perk programs out there are still only as sophisticated as those early trading stamp programs.  They dish discounts and free stuff to repeat buyers and gather about as much insight from the customer as those first shopkeepers exchanging place settings for swollen stamp books.”

Here are some key takeaways that customers didn’t like about loyalty programs.

  • Too much spam and junk email topped the list of negatives at 44 percent
  • Too many conditions and restrictions at 38 percent
  • Rewards that lacked real value at 37 percent

Other prevalent complaints included members having a hard time redeeming points or rewards, program membership lacking value, and communications and services not being personalized or target specifically for members.

So how does your hotel loyalty program stack up against some of the other major hotel brands?

Starwood Preferred Guest - The chain now offers the chance to earn lifetime elite status. Also, road warriors who log more than 75 nights a year can use their own 24-hour check-in/check-out window.

Hyatt Gold Passport - Hyatt is rolling out new benefits that allow members to earn or spend points even when they’re not staying overnight. Just stopping in for a massage at the spa or a dinner in the restaurant at certain properties can help boost your points balance.

Hilton HHonors - Members can now spend points at an online marketplace that sells everything from sporting and kitchen equipment to restaurant vouchers and admission to shows.

GHA Discovery - The two-year-old program, whose members include Kempinski and Omni Hotels, rewards loyal guests not with free room nights but with a range of cultural encounters

Marriott Rewards - Buy airline tickets, pay for car rentals, or purchase travel insurance with a combination of Marriott points and cash. A new auction program lets members bid for special experiences.

The Leading Hotels of the World: Leaders Club - Members can enjoy perks, even when they’re not traveling, at hotel restaurants and spas in 13 cities.

Now let’s change direction and say you’re dissatisfied with the perks of your current loyalty program and you decide to jump ship.

What’s the affect on the brand for your defection?

In a new study released by cg42, “Hotel Group and Loyalty Program Brand Vulnerability Study“, the study measures the frustrations of existing US frequent travelers who are also primary users of these hotel loyalty programs and their properties, and quantifies their potential impact in financial terms.

The major hotels that were included in the study are Carlson (Club Carlson), Best Western (Best Western Rewards), Wyndham (Wyndham Rewards), Marriott (Marriott Rewards), Hyatt (Hyatt Gold Passport), Choice (Choice Privileges), Hilton (Hilton HHonors), Starwood (SPG), and IHG (Priority Club).

The fundamental question the Brand Vulnerability study seeks to answer is “How vulnerable are each of the top hotel groups to loyalty program member and associated spend loss, and what are their specific areas of vulnerability?”.

The answer?

According to the study, “An in-depth analysis of the frustrations experienced by primary, frequent-traveler members of the top hotel groups and loyalty programs in the US reveals that there are real consequences to being a “vulnerable” brand: combined, these 9 hotel groups are projected to lose over $10B in traveler spend in the next 12 months. The top 3 most vulnerable players ranked by Brand Vulnerability Score (BVS) – Carlson, Best Western, and Wyndham – are in fact projected to lose nearly $2B in traveler spend out of the $10B overall figure, in the next 12 months – with Carlson projected to lose $423M, Best Western, $443M, and Wyndham, $901M”.

Tell me about your experience, good, bad or indifferent, with your hotel loyalty program.

Tom Costello is the CEO and Managing Director of iGroupAdvisors, a performance improvement consulting firm that specializes in the hospitality and travel verticals.

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