Are Hotel Loyalty Programs Retrenching?

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By: Wise Marketer Staff |

Posted on February 27, 2019

Hotel Loyalty programs aren’t producing the benefits that hotel brands have expected.

Hoteliers provide discounts on rooms to loyalty customer members with the idea that they will spend enough (for rooms, hotel-run restaurants and stores) to more than make up the cost of the discounts and of administering the program.

But bookings have actually dropped the last few years, receiving an initial boost in 2015, when many hospitality brands first launched their programs, but dropping back down to previous levels more recently. As a result, many hotels still offer last-minute, very inexpensive rooms at sharp discounts to keep occupancy rates up – something the loyalty programs are designed – but are failing – to do.

Noticing the disconnect, some hotels are tweaking their loyalty programs to see if they can generate more interest.

Accor hotel loyalty program changes

In announcing its quarterly earnings, Accor also announced that it has shifted its hotel loyalty program into a fully integrated global platform integrating rewards, services and experiences.

“The new lifestyle loyalty program will recognize, understand, cherish, communicate with and reward guests like never before giving access to ‘ALL of Accor’” the company said. “It will open doors across a portfolio of more than 30 hotel brands as well as a collection of bars, restaurants, nightclubs and “money can’t buy” experiences. This new lifestyle loyalty program will be delivered through a new app and website that will allow members to access the world of Accor from the palm of their hands.”

The program includes:

  1. New premium status to reward the most loyal members
  2. Enhanced benefits
  3. A new digital app

Additionally, the hotel brand is extending its partnership with AEG beyond the AccorHotels Arena to include premium venues providing more than 60,000 tickets and private suites for our loyalty members in Latin America, Asia, and Europe.

The hotel brand has also signed a new partnership with IMG, which provides access to chef master classes and culinary encounters for members courtesy of its loyalty program. Starting in 2020, members will enjoy the best of Taste Festivals in London, Paris, Sao Paulo, Hong Kong, and Toronto - with growth and expansion of the partnership into new cities over the next three years.

New Preferred Hotels Program

This month, Preferred Hotels & Resorts launched I Prefer Alliance, a new loyalty platform designed for independent hotels and regional hotel brands to extend full benefits of I Prefer Hotel Rewards to members of their distinctive guest benefit programs.

The program enables partner hotels to provide access to more than 650 additional destinations across 85 countries where they can earn and redeem points, while receiving other benefits during every eligible stay. Preferred Hotels & Resorts debuts I Prefer Alliance with Tokyu Hotels—one of Japan’s leading hotel groups, with 44 properties across the country and more than 700,000 Tokyu Comfort Members—as its inaugural partner.

Wyndam returns to roots

Skift points out that Wyndham tried to shake up the hospitality loyalty arena by changing its loyalty program from a tiered scheme for different brands under the Wyndham umbrella to one with one, flat, 15,000-point redemption that could be used at any Wyndam property, despite where the points were earned. As a result, a traveler could stay at lower-priced Wyndham properties, but redeem the bonus for a free night at a higher-priced property.

The disconnect is clear – the brand would be giving up profits of the higher priced rooms when a traveler earned and redeemed in this fashion.

Skift postulated that Wyndham offered the policy as a “loss leader” in an attempt to attract top tier loyalty members from other hospitality programs, but the promotion didn’t work. So as of April 3, Wyndham will return to a tiered loyalty program similar to the one it had earlier. Some Wyndham hotels will feature free nights for as little as 7,500 points, while the elite properties will maintain the 15,000 tier.

We've noted some of these changes in recent coverage, but that’s 3 major hospitality brands making major adjustments to their loyalty strategies.  Of course, best practices dictate that hotel loyalty programs morph and change as customers dictate and technology allows, but the magnitude of the brands and the significance of the changes seems to point to a larger dynamic.

Phil Britt is a reporter for The Wise Marketer.