Loyalty partnerships are common across industries, particularly in complementary sectors - airlines partnering with hotels or car rental companies, for example. Less common are partnerships within an industry, in which two companies ostensibly in competition find value in linking their programs together. Enter Mumbai-based Taj Hotels and Hong Kong-based Shangri-La Hotels, which are uniting their respective loyalty programs in a bid to compete together against their large-footprint counterparts.
By Rick Ferguson
Skift has the story, which will see the new combined Warmer Welcomes loyalty program debut in March 2017. The two companies' respective loyalty programs, Taj's InnerCircle and Shangril-La's Golden Circle (no thought to calling the combined program the Golden Inner Circle? Inner Golden Circle? Just wondering), will remain separate programs, but will allow status matching, earning, and redemption across both programs. The plan will bring five million Golden Circle and one million InnerCircle members into the new Warmer Welcomes program.
The reason for the linkage? The need to compete against the new mega-hoteliers in the region, combined with complementary footprints (the 100 Taj Hotels are largely India-based, while the 95 Shangri-La hotels are dotted throughout Asia), made loyalty linkage a natural fit for both brands. Money quote from Chinmai Sharma, chief revenue officer for Taj:
"The footprint was nearly mutually exclusive, so this kind of partnership actually made a lot of sense. Because we're in different geographies, the inherent desire of our members and guests is to be able to get recognition and benefits across a larger portfolio. That’s why this partnership made a lot of sense."
Other key takeaways from the Skift article:
- Hotel programs are evolving into experience-based loyalty. Both brands are motivated by the idea of evolving hotel loyalty programs away from being solely currency-based into delivering a more frictionless, personalized customer experience.
- No data sharing. Due to privacy concerns, the two companies will keep their respective member databases separate and proprietary. Both companies do plan to more effectively mine their respective databases to deliver more personalization and relevance to members.
- No merger - but stronger brand linkage. While the two brands have no plans to merge and/or aquire one another, they do see opportunities for cross-selling in the future.
There's everything to like about this loyalty linkage, which will provide great value to members of the two brands' respective loyalty program members as they jet around the Asia-Pacific rim on business and leisure. This sort of linkage has been tried before, albeit on a smaller scale; In the US, Hyatt and MGM Resorts linked their programs in 2013, and post-merger Marriott and Starwood have similarly linked their programs pending the launch of a fully-combined program in 2018. Expect to see more of this sort of thing in the future - any linkage that adds real value for best customers is the right move in our book.
Rick Ferguson is CEO and Editor-in-Chief of the Wise Marketer Group.
