Significant changes have been taking place in the airline and hotel loyalty sector over the past 18 months – not all for the better. Devaluation has been a major buzzword, particularly for airline loyalty members who’ve seen their benefits eroded in the industry-wide shift to rewarding revenue over miles.
A similar story echoes in the hospitality sector, as numerous brands have revamped their programmes – often unfavourably for lower tiers – and major hotel group mergers have led to a dilution of rewards as more members fight for the top perks (at least that’s the perception of many members on the online forums).
However, amidst the crackdown on traditional benefits a silver lining seems to have emerged, as loyalty programmes begin to focus on alternative ways of adding value and catering to customers’ desires. The traditional “rooms, flights and upgrades model” is giving way to more lifestyle and experience-focused offerings.
“Guests are no longer looking for a loyalty programme that focuses only on points – they also [want] aspects that make the travel journey and experience more meaningful and seamless,” says
Carina Chorengel, senior vice president brands and marketing Asia-Pacific of Hyatt, which recently relaunched its Hyatt Gold Passport programme as World of Hyatt. “In particular, members are looking for experiences that are tailored to the individual.”
EAT AND EARN
While some loyalty programmes, such as Hyatt and Hilton, have seen their reward schemes undergo substantial revamps, others have launched entirely new lifestyle-orientated programmes. Last year, Shangri-La Hotels and Resorts invited guests to join “The Table”, a new F&B programme that focuses on dining experiences across the group’s portfolio and allows guests to earn or redeem points by eating and drinking at any of the hotel’s participating restaurants. The Table is also fully integrated with the normal Golden Circle loyalty programme.
Asia Miles has also got a strong F&B-focused offering. The platform, which bills itself as Asia’s leading travel and lifestyle rewards programme, has an extensive list of restaurant partners where members can rack up points simply by tucking in to dinner. This has recently been further extended to encompass food delivery services such as Food Panda, and even grocery shopping in Parknshop.
SHOPPING FOR MERIT
Global and online retail opportunities are another area where loyalty programmes are rapidly diversifying, by forging joint ventures with various industry partners. Japanese carrier All Nippon Airways (ANA) recently announced a new ANA Global Service to supplement its existing ANA Mileage Club programme.
“ANA received comments that the menus, especially for redeeming miles outside of Japan, were limited,” a spokesperson for the airline said. “After a detailed review, we figured that it would be a good solution to partner with [loyalty commerce companies] Points and Collinson Latitude, who provide worldwide services.”
One of the focuses of the new partnership is the introduction of the retail-focused ANA Global Mileage Mall and ANA Global Selection platforms (supported by Collinson Latitude’s own loyalty-focused online retail platforms, Earn Mall and Redemption Store). While full details of ANA’s new Global Service loyalty offerings have yet to be unveiled, it’s been confirmed that redemption offers will include hotels, car rental, merchandise, gift cards and experiences.
Other companies are introducing ways of spending points not just via their own retail channels, but on established independent platforms. In February this year, Hilton’s loyalty programme Hilton HHonors (rebranded to Hilton Honors) saw the introduction of “Shop with Points at Amazon”, meaning members can use their rewards at one of the biggest online e-commerce retailers in the world.
Such low-threshold redemption options make it easier for those who have a low point balance to make use of their earnings, as well as adding diversity and choice to how people can enjoy their rewards.
MOMENTS THAT MATTER
But perhaps the biggest expansion of lifestyle-focused redemption offerings takes the form of giving guests experiences. Hyatt’s new World of Hyatt platform, introduced in February this year, promotes “building memorable experiences”, with a variety of options such as an immersive three-day excursion to Tokyo, which can be paid for through a combination of points and/or cash.
“World of Hyatt is about celebrating our members by understanding the people, places and experiences at the heart of their world,” says Mark Hoplamazian, president and CEO of Hyatt Hotels Corporation. “The more we understand them, the better we can care for them and design unique experiences with them in mind.”
Hilton Honors has also started to focus on these sorts of unique experiences for its members. In February during Grammy week, for instance, it launched “Music Happens Here” – an integrated music programme providing members with one-of-a-kind concert experiences as well as private meet-and-greets with artists.
Starwood Preferred Guest (SPG) was one of the first to foray into experience-based loyalty rewards with the launch of the SPG Moments platform back in 2006. Having been acquired by Marriott International last year, this platform has now been linked with Marriott’s Experiences Marketplace (launched in July) and been further expanded with Marriott’s investment in price-comparison platform Placepass in March this year. This opened up the Placepass website’s more than 100,000 travel experiences to guests booking through the Marriott or SPG website, with activities such as VIP visits to filming locations of the British TV series Downton Abbey, wrestling with a retired sumo wrestler in Tokyo, and exploring Dubai’s sand dunes by camel or 4WD vehicle.
BUCKING THE TREND
But though experiential redemption options appear to be ever more commonplace, not all loyalty programmes are following suit.
Two years ago, Wyndham Hotels and Resorts relaunched its Wyndham Rewards programme with one key aim – to simplify the earning and redemption process, with a clear focus on using points for rooms. This included creating a flat rate for redeeming rooms across all properties, regardless of brand tier and with no blackout dates.
According to Noah Brodsky, senior vice president worldwide loyalty and engagement, loyalty members primarily want to use their points for room stays rather than supplementary purchases, and the process should be straightforward. The result? A 90 per cent increase in the number of nights redeemed in the first year since the programme’s relaunch, and some eight million new members enrolled to Wyndham Rewards over the past two years. In March this year, the programme celebrated its 50 millionth member.
However, even Wyndham Rewards’ revamped system, with its clear focus on room night redemption, has built in experiential perks with its Go Free Plus award nights. “When members redeem [a Go Free Plus night] in one of our top 25 destinations around the world – and that includes Shanghai, Beijing, Hong Kong – not only do they get a free night but we give them additional value towards local activities. At our Diamond level, you get two free tickets – for every night you redeem – to a local attraction or event,” says Brodsky.
“People are in this programme for free nights,” he adds. “Many of our competitors encourage guests to use their points for other things – gift cards or airline miles. We certainly have those options, they are an important part of the programme, but the best use of our points is for hotels. That’s a huge shift in customer behaviour that we’ve seen.”
