Hotel Loyalty Program Trends

Hotels: the Cost of Loyalty Schemes - Buying Business Travel

Excerpt from Buying Business Travel

Hotel loyalty schemes are a crucial element of the branded chains’ strategies, but they can come at a cost, says David Churchill

This time next summer Marriott International CEO Arne Sorenson will be hoping that a crucial element of last autumn’s US$13bn acquisition of rival Starwood Hotels – creating the world’s biggest hotelier in the process – will pay off in one key respect: the successful integration of the highly regarded Starwood Preferred Guest (SPG) loyalty scheme with Marriott’s own Rewards programme.

Adding SPG to Marriott Rewards will create a mega-loyalty scheme with 100 million members, Sorenson revealed in June at a New York investment conference. When integration takes place this will put Marriott on a par with Intercontinental Hotels Group (IHG), which claims to have the world’s biggest hotel loyalty scheme also with ‘around 100 million members’. The smart money is on Marriott taking pole position soon.

But it was not so much the scale of adding SPG’s members to its loyalty empire that appealed to Marriott, but the quality of its ‘elite’ frequent business travellers, especially in comparison to Marriott’s more mainstream guest base.

So much so, in fact, that Sorenson has not rushed into making significant changes in SPG – although Marriott and SPG members had their accounts ‘linked’ at an early stage following the corporate takeover, providing reciprocal equivalent status in both programmes.

Responsibility for integrating the two schemes will fall to David Flueck, a 13-year Starwood veteran, who was promoted earlier this year to oversee the full integration of the two programmes.

Apart from the sheer numbers of scheme members, Marriott – including Starwood – now embraces more than 6,000 hotels, spread across 122 countries and 30 different brands. And Sorenson believes there is more growth potential. “Even with so many brands, we are only a small percentage of the global hospitality industry, so there is definitely room for more growth,” he told the New York conference.

The complexities of the Marriott-SPG integration have been intensified, moreover, by Ritz-Carlton’s loyalty scheme being added to the mix next year. Ritz-Carlton was acquired by Marriott in the late-1990s, but its loyalty programme has previously been run separately from the main Marriott scheme.

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