The frenzied and ongoing expansion of big-brand hotel chains in Asia presents a massive opportunity for frequent guest programmes (FGP) in the region, according to a white paper from loyalty agency ICLP.
The paper, entitled 'Asia calling: doors wide open for frequent guest programmes in Asia', reports that hoteliers currently have high hopes for Asia, with most North American and European brands, as well as Asian and domestic Chinese hotel groups, being set to double their presence in the region over the next 2-5 years.
China has in fact attracted the lion's share of attention, with big brands such as IHG, Starwood, Wyndham, Accor and Jumeirah, as well as regional chains such as Shangri-La, now being in a race to establish a dominant presence. Even the country's own budget brands are also vigorously staking their claim to the hotel market. For example, Home Inn reports that it has plans to operate 1,000 hotels in China by 2013, while Hanting Hotel Group announced plans to operate 500 hotels by the end of 2008.
All of this, the company suggests, means that the opportunities are significant for establishing new customer relationships through frequent guest loyalty programmes.
At present, there are an estimated 8-10 million FGP memberships in the entire region. However, taking away the European and North American members of those programmes, the local membership figure is closer to 3-5 million.
Compare today's Asian figures to the 175 million-strong membership of the top nine FGPs in North America. And, even if only memberships based in North America are counted, the figure is still some 150 million, out of a population of around 300 million.
So, with some 1.5 billion people in Asia - whose growing prosperity is rapidly translating in travel dollars - the potential for FGPs is staggering, ICLP says.
The big brands, such as Starwood Preferred Guest, Priority Club Rewards and Hilton HHonors, currently lead the way in Asian membership recruitment, brand awareness, programme breadth and overall innovation. For example, Priority Club Rewards claims over 1 million members in China alone.
These programmes' biggest advantage is their size - with thousands of properties throughout the region - and the revenue that they generate as a result. This allows programme operators to re-invest tremendous amounts in brand building, data management, analytics, systems development and innovation. But another edge they have is their level of integration within the organisation as a whole. These FGPs play a vital role in all areas of hotel management, from brand building and distribution management to operations and sales support.
As a result, Asian FGPs clearly cannot compete with the big global FGPs in terms of revenue generation, but what they can do instead is to capitalise on their deeper knowledge of and insight into the Asian consumer's mindset. One good example of this has been Shangri-La's Golden Circle programme. Where most Asian FGPs are a simple generic copy of a global programme, Shangri-La developed its own unique programme with a thoroughly regional focus - a move that paid off when it won two Freddie Awards, as well as several other regional and global awards.
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