Do Loyalty Programs Actually Help Your Brand?

Research points to declining associations between brands and loyalty programs

By Larry Mogelonsky President & Founder, LMA Communications | October 06, 2013

I've long held the belief that too many major hospitality brands and too many big names operating in the hotel space can seriously confuse travelers. As a result, this leads to less overall awareness of your brand's unique qualities and, ultimately, decreasing loyalty. By itself this is a very loose argument. However, a recent study spearheaded by my friend, Laurence Bernstein, managing partner at the research firm, Protean Hospitality Partners, has confirmed this sentiment.

For this study, 400 US business travelers participated in an online survey asking them to associate 36 hotel brands not containing the name of their parent chain with one of the following seven loyalty programs: Choice Privileges, Hilton Honors, Hyatt Gold Passport, Marriott Rewards, Priority Club, Starwood Preferred Guest (SPG) or Wyndham Rewards.

Results That May Surprise You

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Bernstein

On average, only 20% of these pairings were correct. Moreover, participants had the option to tick a 'Don't Know' box for each of the 36 hotel brand prompts, of which this selection was made 52% of the time. Either way, this indicates that knowledge of loyalty programs associated with various brands is drastically below where it should be.

Drilling down to the individual percentages, there are some standouts worth noting. Courtyard, when presented independent of its 'By Marriott' namesake, was correctly identified 65% of the time as part of the Marriott Rewards program – the best percentage of the lot. Other victories include Comfort Inn (41%) and Quality Inn (36%) for Choice Hotels; Garden Inn (37%) and Hampton Inn (30%) for Hilton Worldwide; Residence Inn (35%) for Marriott; Holiday Inn (33%) for InterContinental Hotels Group; and Sheraton (31%) for Starwood Hotels.

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Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.