Traveler loyalty programs have been around since 1981, when American Airlines introduced AAdvantage in recognition of how important high-frequency, high-yield business travelers had become to its bottom line. A few years later, hotel chains led by Holiday Inn (IHG) and Marriott (MAR) followed suit. These programs quickly proved popular with customers—too popular, in fact, to justify the rewards they offered. According to FrequentFlier.com, notching as few as 75 stays entitled one to a pair of round-trip airline tickets to Europe or a week’s stay in a Paris hotel.
That model proved unsustainable. In the late 1980s, many chains scaled back their level of generosity. But for international luxury chains such as Starwood, which launched the Starwood Preferred Guest program in 1999, the economics made sense. So, too, for others like Hilton Hotels & Resorts and its HHonors program, and the Leading Hotels of the World and its Leaders Club. Even luxury brands that initially held out, such as the Ritz-Carlton Hotels, now offer loyalty plans. But true mega-travelers hold Platinum status with multiple hotels and airlines, so perks like bottled water and Internet access did not assure their loyalty. “The points and the free nights and the schwag are all great,” Neuman says, “but it’s the service and the concern about me that makes the difference.”
Offering elite guests exclusive “experiences”—the industry buzzword—became the new coin of the realm, the idea being that these were more difficult for competitors to copy. Hotels began tempting favored members with Super Bowl tickets, backstage access to Bruce Springsteen concerts, and behind-the-scenes tours of the Vatican. The Leaders Club arranged a sojourn to a 16th century Tuscan villa where guests could tour private wine cellars and go truffle hunting. The Global Hotel Alliance, a collection of 14 smaller brands (including Omni and Kempinski), offers everything from Maldivian drumming lessons to private classes with an International Chess Master to the opportunity to train Beluga whales in British Columbia or wear the native attire of Myanmarese ethnic tribes and visit the local crocodiles.
Filed Under: Marketing
About the Author: