David Slavick provides insights and perspectives on this travel loyalty story
As reported in Wise Marketer’s weekly Newswire dated January 2, 2024, Royal Caribbean Group, the parent company of Royal Caribbean and Celebrity Cruises, is exploring a potential unification of its two loyalty programs. Currently, Royal Caribbean Cruises operates the Club Royale rewards program, while Celebrity Cruises runs the Blue Chip Club.
From a “best practices” point of view, the unification seems to be an initiative worth exploring as cruise customers would benefit from the opportunity to seamlessly transition between cruise itineraries offered under the Royal Caribbean umbrella while making the most of their loyalty benefits across both brands.
While no official announcement has been made, we thought the news represented a solid “case study in the making” and reached out to Travel Loyalty expert David Slavick, CEO Ascendant Loyalty, for comment.
David shares his perspectives below.
Unifying or consolidating two independently run loyalty programs carries many potential benefits for both the guest and the enterprise. Beyond what the guest experiences, the business itself has strong motivation to do so as a method to reduce operating expenses and yield a more profitable return to investors.
When considering such a significant change (whether in retail (GAP) hotel (Marriott/Sheraton) or cruise line) it does bring about significant changes to the brand experience and requires communications to brand lovers having to accept change, teaching them about their tier status qualifications, exclusive access modifications, and new concierge contacts and more.
There is risk involved in any program re-fresh, but especially in a category with high expectations relative to service, experience and indeed emotional response where vacations are concerned. To date, Royal Caribbean and Celebrity have operated independently, offering different benefits and experiences unique to their respective brands. Celebrity offers a more intimate onboard experience, smaller guest capacity, and caters to an upper income/older age demographic while Royal Caribbean fills the middle-class demographic, a much larger ship capacity, catering to couples on their first cruise, families with children and themed cruises.
Naturally, each demographic can migrate up/down as cruise experience and itineraries become more attractive based on length, themes, and ports of call. Being able to earn benefits that traverse brands without restriction is a highly attractive feature.
Both brands are supported by Bank of America issuing a Signature Visa card which is most attractive in its no fee/surcharges promise when used overseas.
The questions to be asked with the ultimate launch of this new construct are as follows:
- Will the value proposition using the Bank of America Signature Visa remain the same? Today, BofA offers a consolidated, seamless earn/burn of points good toward onboard benefits. It is an open earn, but closed burn design where cardholders spend funds cruise vacation experiences on either brand - room upgrades, dining, excursions, onboard retail shop purchases or spa services.
- The branding on the cards is unique to each cruise line. Perhaps a re-issue of the card at launch to all cardholders, or over time as the card nears its expiration is indicated. For both brands a co-brand re-issue could boost future bookings with a promotional offer when the reservation is made with the preferred tender. Bonus points for spending behavior have been used in the past to encourage activation as well as incentivize future bookings.
- For the Royal Caribbean guests, consolidation is a major "upgrade" in cruise experience should they wish to migrate up to the Celebrity brand.
But let’s address the key question of “why consolidate”? What will be unified and what may remain unchanged? Perhaps technology may have played a significant role here where at the corporate IT level, both brands supported by one platform that has a single view of the cruise guest cross brand enables Royal Caribbean Group - the corporate parent, to most efficiently and effectively manage the business.
Other potential benefits of a consolidation include:
- Program management efficiencies
- Partner management practices, choices, and offerings
- Onboard revenue optimization - especially retail sales and casino player optimization
- Stem attrition or loss of bookings to competitors (MSC Cruises, Norwegian Cruises, etc.) by offering more choices with less restrictions
- Increased brand awareness and general media promotion, positioning and offers
At this time, we don’t know if Royal Caribbean will proceed with a consolidation, but if they do, pay close attention to changes in the program design construct, how these changes are communicated to cruise guests of each brand, how points may become transferrable between brands, and what Bank of America may decide about a card product relaunch.