Numbers matter in hotel loyalty programs, but they may no longer be the most important metric according to some lodging companies, which list engagement by personalization as taking precedence. In fact, with some observers seeing a plateauing in membership levels, brands are becoming increasingly innovative in ensuring that members are motivated to return to their properties.
Loyalty programs play the role of hub for lodging companies with multiple brands, which, in turn, act as the spokes. To wit, everything revolves around and plays off of the loyalty program, becoming even more central to marketing than even the brand names. As such, lodging companies are going all out to differentiate themselves, starting with moving well beyond room-night redemption.
Consider Wyndham Hotels & Resorts: Last year, the company partnered with Penn State University to enable a Wyndham Rewards member to run out from the tunnel with the school’s football team before their game with Ohio State. “We provide our members with opportunities they couldn’t get outside of loyalty programs,” said Michael Shiwdin, group VP of guest engagement, loyalty and strategic partnerships for Wyndham Hotels & Resorts. That’s a much more sophisticated approach than simply awarding room nights but, said Shiwdin, it enhances the power of the program. In fact, noted Shiwdin, one out of every two check-ins at a Wyndham hotel is a Wyndham Rewards member.
At IHG Hotels & Resorts, said Kristin Klebanov, VP of loyalty strategy and performance, IHG One Rewards, enhanced personalization is also driving retention and spending. Members, she said, typically spend about 20% more in IHG hotels than nonmembers and are around 10 times more likely to book through IHG’s direct channels. Loyalty penetration has also significantly increased, she said, with members now responsible for over 60% of room nights globally in 2024 and approaching 70% in the Americas.
Zach Demuth, global head of hotels research at JLL, said hotels are acting more like airlines in creating affiliate credit cards and in seeking partnerships with major consumer brands. The goal is for members to be able to earn beyond rooms nights and burn in a much wider universe.
Getting Personal
Through partnerships and credit-card affiliation, hotels have access to consumer purchase behavior and can capitalize on that data, sending more relevant offers to potential guests. At IHG, said Klebanov, “We know, now more than ever, our loyalty members want to be seen as individuals, and they expect their hotel experiences to reflect their personality and their preferences. We make it a priority to understand their personalized needs and ensure they’re being connected with the right hotel, at the right time, for the right occasion.”
Personalization in the World of Hyatt program, said Laurie Blair, VP of global marketing for Hyatt Hotels Corp., “is deeper than just targeted offers—it is a way for us to show care for our members whether that be through offering them more choice at more milestones or the ability to gift awards to loved ones.”
As with the Penn State reward, experiences have come to the fore. The World of Hyatt FIND platform, said Blair, offers more than 600 global experiences, including a recently launched clinic at the Grand Hyatt Melbourne in Australia, featuring hands-on coaching from tennis legend Stan Smith. These wide-ranging offerings, said Blair, allow members to further personalize their travel itineraries with one-of-a-kind memories, while also providing another way to earn and redeem points.
Growing Through M&A, Partnerships
Hotel companies are moving to add or acquire brands—or form partnerships—in the interest of driving loyalty. Witness the decision of Small Luxury Hotels (SLH) to be part of the Hilton Honors system. That partnership, said Demuth, gives SLH access to a cheaper distribution system and the opportunity to get into a customer base they wouldn’t otherwise tap into.
Richard Hyde, COO at SLH, said Hilton Honors’ 190 million members “were an obvious compelling factor as it brings major awareness opportunities to our small hotels.” Other factors, such as the partnership being a performance-based model with no upfront cost for hotels, he said, make it an excellent opportunity.
With brands now mini-ecosystems, said Demuth, there are myriad potential extensions—from Ritz-Carlton Yachts to partnerships with rideshare providers like Uber and Lyft. Brands recognize, he said, that they must be more than just hotels; they also need to offer the kind of experiences travelers are looking for.
Wyndham, said Shiwdin, is always looking to fill gaps in its portfolio and recently announced a partnership with SBE and its new HQ brand that will provide loyalty members with an option to redeem their points at luxury lifestyle properties.
“We’re always open to new ideas and exclusive partnerships,” said Klebanov, noting IHG’s strategic alliance with Iberostar Beachfront Resorts. Adding more beachfront resorts to the portfolio, she said, “meets our guests’ growing demand for trusted travel options, including all-inclusive stays, which in turn support member retention and acquisition.”
At Hyatt, an alliance with outdoor accommodations company Under Canvas, a long-term licensing deal with The Venetian Resort Las Vegas and the acquisitions of Standard International and Mr & Mrs Smith “give our members the flexibility to explore the world with World of Hyatt, regardless of the travel occasion,” said Blair.
World of Hyatt members can also now earn bonus points by completing qualifying workouts on Peloton exercise equipment at more than 700 participating hotels globally and can utilize those points to redeem for future stays, dining, spa offerings, wellbeing experiences and more.
Small, But Mighty
Not every loyalty program has the same magnitude so smaller players must act strategically, according to Shawn Cryan, SVP of corporate strategy for Sonesta International Hotels.
One approach, said Cryan, is to create situations where members can earn more quickly. Another is experiential opportunities. The company has a parentship with “Rolling Stone” to offer admission to Musicians on Musicians events, where well-known performers speak to one another. These are available either through sweepstakes or targeted marketing to specific customers.
That kind of offer, said Cryan, “levels the playing field.” Similarly, Sonesta will have an event at South by Southwest in Austin this year with an emphasis on southern rock. Last year, the company had a relationship with a yacht racing company and offered guests the opportunity to sail on “chase ships” to witness races at close range.
Its partnership with Hilton notwithstanding, SLH maintains its own program, now known as the SLH Club. It operates independently of the Hilton partnership and the two cannot be used together. That program continues to grow and additional benefits are planned for later this year.
Taking Credit
A core value for any loyalty program, said Shiwdin, is finding reasons and opportunities to earn currency every day. The company has three affiliate cards: a no fee card, a fee card and a business card (Wyndham Rewards Earner Card, Wyndham Rewards Earner Plus and Wyndham Rewards Earner Business). The business card lets members earn 8x their spend on hotel stays and gas, whereas the Earner Plus card earns 6x and the regular Earner card earns 5x. Beyond hotels and gas, members also earn additional points for spending on items like dining and groceries.
IHG, said Klebanov, recently entered into new agreements with its current issuing and financial services partners, JPMorgan Chase Bank, N.A. (Chase) and Mastercard, to continue providing co-branded IHG One Rewards credit cards in the U.S. co-brand credit cardholders, she said, “are among our most engaged loyalty members, staying even more frequently and spending more in IHG hotels.”
Hyatt’s relationships with Chase for World of Hyatt credit cards and American Airlines for World of Hyatt and AAdvantage enable members to link their accounts and “give our members the ability to flex their day-to-day spending and travel expenses to maximize their journeys with Hyatt from stays to planes,” Blair said.
Owning It
Not only must operators appeal to guests through their loyalty programs, they must please hotel owners and potential owners. Wyndham Rewards, said Shiwdin, is a core program for owners “because it really drives demand for existing franchisees.” The program, he said, stands out because members can earn significant rewards from their first stay. In addition, he said, the company has kept the reimbursement structure to owners simple.
“Hotel owner economics are paramount,” said Blair and as Hyatt introduces new benefits and awards designed to grow membership and increase loyalty with existing members, she said, “we have taken specific measures to ensure we are caring for our owner community.”
Looking ahead, said Demuth, data will get better and the goal then will become more about relevance than personalization. For instance, is it a business trip or a family trip that is being booked? Through targeted outreach, said Demuth, “you can create a guest for life or alienate one for life if you don’t handle it correctly.”
Story contributed by Harvey Chipkin.
