HOTELS
POINTS mean prizes
Hotel loyalty schemes are a crucial element of the
branded chains’ strategies, but they can come at a cost By DAVID CHURCHILL
T
HIS TIME NEXT SUMMER MAR- RIOTT 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 inte- gration 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
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‘elite’ frequent business travellers, espe- cially 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 Mar- riott 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 integra- tion 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 differ- ent 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, more-
over, 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.
PRESSURE ON LOYALTY SCHEMES The delay in integrating all the schemes also reflects the changing times for loyalty programmes in the travel sector. Ever since American Airlines in 1981 launched the first serious loyalty scheme for regular airline passengers, most corporate travellers have traditionally found ‘free’ flights or upgrades more alluring than rather dull – and often over-complex – hotel loyalty schemes. However, as flying has become more of
a commodity-style experience for many – packed into ever-shrinking seats and forced to pay increasingly egregious fees for services previously included in the fare – so accumulating frequent-flyer miles has lost some of its lustre. The airlines’ pivot towards rewards based on spend rather than miles flown, has also diminished their attraction, since the potential rewards can be far less.
BBT July/August 2017 63 2017
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