Loyalty Pays

In 1981, American Airlines combined basic economics with simple psychology and created something that changed the travel industry forever: the loyalty programme. Thirty years later, it has evolved into many different forms, but can still send some customers into frenzies over points and miles. A few loyalty-programme members have their scheme manager on speed dial. The concept is simple: customers earn points according to the amount of money they spend and are rewarded not just with tangible redeemable points or miles, but also with recognition and added comfort. Today, almost every hotel group has one (the Peninsula and Mandarin Oriental are two exceptions), and there are more than 100 airline frequent flyer programmes worldwide. According to a Colloquy study in 2009 conducted by Loylogic, a reward solutions provider, travel loyalty programme memberships in the US alone accounted for 31 percent of all loyalty memberships in 2008. And while airlines’ frequent flyer clubs focus on a simple transaction – going from point A to point B – hotel loyalty programmes are more multifaceted and complex. Holiday Inn was the first hotel group to jump on the bandwagon in 1983, followed closely by Marriott in the same year. The tables below dissect the loyalty programmes of seven major hotel groups: the Starwood Preferred Guest programme, Marriott Rewards, Hilton HHonors, the Hyatt Gold Passport, InterContinental Hotel Group’s Priority Club, Shangri-La’s Golden Circle and Accor’s AClub. All offer points redeemable for airline miles or free nights while some include co-branded credit cards allowing members to earn extra points from purchases off hotel properties. The programmes offer many common benefits, including free upgrades to higher-category rooms, access to executive facilities, complimentary breakfasts, wifi access and later check-outs, but they also offer unique features, partly as a way of differentiating themselves from competitors (see “The basics” on the previous page). Additionally, in Asia-Pacific, being on the top tier of a loyalty programme can also be a status symbol, according to Soo Lin, director of loyalty marketing in the region for the Marriott Rewards. “We are all aware that it is the offer of a free night that makes it compelling for travellers to join a hotel loyalty programme, but here in Asia, recognition and status play an even more important part in growing loyalty and driving repeat visits,” she says. “Building a personal connection with our members and consistently delivering on VIP benefits is our way of saying we value you – it’s the softer touches that make the hotel stay experience positive and the membership worthwhile.” Download the entire story on Loyalty Pays, here. Adobe Acrobat will be required.