News

Focus: Global Hotel Alliance

20 Jul 2009 by Mark Caswell

It’s been a busy year for Global Hotel Alliance (GHA). The group of four and five-star independent hotel brands, which counts the likes of Kempinski, Dusit International, the Leela Palaces, Hotels and Resorts, and the Doyle Collection among its portfolio, is celebrating its fifth anniversary this year and has added an 11th member to its fold – Asian brand Parkroyal Hotels and Resorts.

The alliance also unveiled a new partnership with British Airways’ Executive Club earlier this month, allowing guests to earn 500 miles per stay at all participating GHA hotels, with an introductory double miles bonus offer until September 30. This partnership adds to existing agreements with the loyalty programmes of Emirates, Jet Airways, Lufthansa, Singapore Airlines and United, to name but a few.

Working in much the same way as the major airline alliances by offering cost savings to its members and enhanced brand recognition for the traveller, GHA has come a long way since its inception, as the alliance’s CEO Christopher Hartley (former senior vice-president of sales and marketing at Kempinski) explains.

“At the beginning, GHA was very much adhoc and based on goodwill, trying to get brands together. After the first two years, we actually sat down and set it up as a company, found a technology partner, and then went on the hunt for groups that would fit in quickly to give us that critical mass,” he says.

This search saw US group Omni Hotels join the alliance in 2006, coupled with the merging of the Asian Hotel Alliance (comprising Dusit, Landis Hotels and Resorts, and Marco Polo brands) into GHA. India’s Leela Palaces, Hotels and Resorts followed in 2007, with more recent additions including Cham Palaces and Hotels in the Middle East and Dublin-based the Doyle Collection last year.

Hartley says: “Today we have nearly 200 hotels, but what’s most important is not the number but the coverage of the key markets. For instance, we don’t have a property in Paris, so we definitely need to fill these sort of white spots with sensible brands. We’re not looking for individual hotels because we’re not a representation company, we’re not competing with [the] Leading [Hotels of the World] – we’re looking for brands that represent regions.

“Take markets like Italy, for instance, where there are a number of independent brands, and France, Spain, Portugal and Scandinavia, where we are talking specifically to a group at the moment, and Australia and New Zealand, where we’re in dialogue with a brand. Growth is on the horizon, but this isn’t an alliance that is growing by acquisition or opportunism. We’re now at a stage where we’ve got critical mass and we’re able to look around at markets.”

Hartley adds that GHA has followed Star Alliance’s example in terms of structuring and expanding the group. “We work very closely with Star Alliance on the basis that we have similar customers, goals and aspirations. They’re obviously quite a bit older than us and therefore quite a bit bigger, but we’ve learnt a lot from what they did at the beginning, because they mentored us to a certain extent. We got involved with them very early on and asked, ‘What did you do well?’ and ‘What did you do badly?’

“Airlines are a natural partner as they’re carrying our customers into our destinations and they’re a brilliant way to get our message to their customers. The airlines have been pioneers in loyalty programmes and they still have the most powerful incentives today.

“One of things that we’ve learnt from Star is that technology is essential to early success and to aligning reservations systems. In the same way as an airline alliance has up to 18 months preparation period after announcing a new carrier, it can take anything from 12 to18 months from the first meeting to a brand joining GHA, because you’re talking about bringing a whole brand – lock, stock and barrel – into an organisation and making a long term commitment.”  

Of course GHA doesn’t partner exclusively with Star Alliance members, having recently announced an agreement with BA’s Executive Club scheme, something that Hartley says has been made possible by the “critical mass” of the alliance.

He says: “It’s enabled us to attract partners that individual hotels wouldn’t be able to because they are too small. In my days, at Kempinski, we always wanted to partner with British Airways but they weren’t interested because we only had 30 hotels at the time. Today, GHA has partnered with BA – they’re happy, we’re happy and all our members are happy. Where can we go from here? Well, we’ve got car-hire partners in the offing, we’re working with credit-cards providers, and then you can see lifestyle partners and consumer goods partners.”

At the moment, guests staying with brands within the alliance can join individual loyalty and recognition schemes where available, but this is all set to change with the introduction of an alliance-wide loyalty programme later this year. Exact details are still to be finalised, but Hartley says the scheme will not be just another points-based programme.

“We’ve got some interesting ideas as to how we’re going to position this,” says Hartley. “We’ve spent a lot of time over the last few months talking to customers about their membership of other hotel programmes, and what value they see in those programmes, to try and find out what would make a loyalty programme exciting over the next five years.

“We will focus on recognising what individual customers want out of a programme. In other words, when you check in to a hotel you don’t necessarily want a bowl of fruit in your room, maybe you’d like to choose the amenity that you get, or specify the preferred benefits from a list. Free pressing, for example, is that what everyone wants, or is that just something we put on a list to make the list look long? Talking to customers, we feel that they are far more interested in one or two benefits that they really want, again depending on the reason they are travelling. So we’re looking at a programme that empowers its members, rather than pigeonholing a number of benefits and saying ‘This is what you get’.

“We want to bring the experience of travel back into rewards, and points do not qualify for this. You can give people as many points as you want but they will never be telling their grand children about how many they had, but they will tell them about an amazing experience they had in a city.

“We feel that to launch another points programme would be to risk moving into an area that is dying out. Are the current loyalty programmes going to be around in another 20 years, or is social media changing the way people think about what they want? We didn’t think it would be right to launch a programme that essentially copied the past instead of looking to the future.”

Despite the economic downturn, Hartley remains positive and believes that GHA could end up benefitting from the tough conditions. “It’s been a bad year. We’re all doing worse than last year, but we’re all doing better than 2006, and 2006 was a good year. We all got so used to 20 per cent growth year after year that suddenly to be in a year when we lose 20 per cent is a catastrophe. But is it Armageddon out there? No, I don’t think so.

“I travel and see hotels that are busy, but busy with very much more demanding customers, customers who are being told by the media that they should argue about everything, that they should demand more, that they should get discounts on everything, and that they should expect better service. We’re in a world where customers want to pay less and get more.

“Is it a good thing to be associated with a five-star industry at this time? In some ways, yes, as people are seeing this as an opportunity to stay in a five-star hotel for £100. What the alliance does is enable independent brands to reduce their costs, and to reach more customers, so it’s an inexpensive mechanism to survive these difficult times.”

Business Traveller will have more details on the launch of GHA’s loyalty scheme over the next few weeks. Visit globalhotelalliance.com for more information.

Report by Mark Caswell

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