Hotel Loyalty Programs Offered by Chains and Independents are Growing in Popularity

By Jonathan Barsky Partner, Market Metrix | October 23, 2011

Airline frequent-flyer programs are becoming less attractive to customers. It's hard to get a flight for free. With hotels, you can redeem the points much more easily. Hotel loyalty programs are getting easier to use and more generous, often with no blackout dates. Consumers are signing up to earn free hotel rooms, upgrades and other perks.

With improved benefits and guest-friendly rules, hotel loyalty programs are increasingly becoming one of the primary reasons for selecting a particular hotel. Loyalty programs now rank fourth among reasons why consumers select a hotel (the top three reasons are "Location", "Price", and "Past Experience"). Across the industry loyalty program membership is on the rise and the percentage of "Elite" members in these hotel programs rose sharply in 2011 (up 5%). This is good news for hotels because members of these programs are more likely to recommend the hotel, spend more per room, and are less sensitive to price increases compared to non-member guests.

Measuring loyalty program effectiveness

One measure Market Metrix uses to evaluate the success of a brand's loyalty program is called "Loyalty Program Effectiveness". This measure identifies the percentage of guests who say that their loyalty program membership was a primary reason for choosing that hotel.

In 2009, 32.7% of guests said that the loyalty program was a primary reason in deciding where to stay. That number has grown to 34.5% in the first half of 2011. Among the major chains, the most effective programs in the hotel industry are Hilton HHonors, Starwood Preferred Guest, and Marriott Rewards. Starwood's Preferred Guest has seen the biggest improvement (+5.9% to 37.7%) in the past three years. Industry wide, approximately one of every three members of a hotel loyalty program said their membership was "Very Important" in hotel selection.

alt text

Choose a Social Network!

The social network you are looking for is not available.

Close

Hotel Newswire Headlines Feed  

Bill Kotrba
Michael C. Schmidt
Cid Jenkins
Robert Gilbert
John R. Hunt
Jim Poad
Jonathan Greenbaum
Jane Segerberg
John Ely
Tina Stehle
Coming up in April 2019...

Guest Service: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.