Sep212010

Hotel loyalty program 2010 membership numbers

I regularly see articles stating hotel loyalty program membership numbers are closely guarded secrets. An internet search seems to dispel the truth in that statement. The tricky part is the blurred distinction between active loyalty program members and the hotel loyalty program’s member database which is any person who ever signed up for the hotel program. In general, the active membership is only about 20% to 40% of the total membership cited for most programs.

The bottom line is all the evidence I found indicates that more than half of all hotel guests globally staying in a chain hotel are not members of the hotel loyalty program and miss out on the opportunity to earn loyalty points, benefits and rewards for the hotel stay, regardless of hotel loyalty program and chain.

 

InterContinental Hotels Group Priority Club – 48 million members

IHG Priority Club proudly displays its membership numbers at 48 million for December 31, 2009 as the largest membership in the hotel industry on its 2009 annual report and on different pages of its websites. Some sources even show membership at 52 million now.

Don Berg, Vice president of IHG loyalty programs stated IHG has $450 million in reserves for unredeemed loyalty points. In an August 5, 2010 Hotel and Motel Management article, “Brands: Programs target return guests,” he states Priority Club has over 50 million customers but only about 20% are active members.

Nick Rich, IHG’s Director of Consumer Insights for Europe, Middle East and Africa in an interview published late December 2009 stated the membership as 47 million members with 3 million new members joining in late 2009. He states Priority Club members account for 1/3 of all nights spent in IHG hotels.

My Loyalty Traveler insight tells me that 2/3 of all IHG hotel guests are not getting any value-added loyalty program benefits from their IHG hotel stays. This kind of explains much of the resentment expressed by travelers that chain hotels are overpriced and Priceline or budget accommodation is the way to travel.

My loyalty traveler rule of thumb is that I receive $100 value-added benefits with every $100 I spend through a hotel loyalty program stay in loyalty benefits received during a hotel stay like a complimentary room upgrade, free internet, free breakfast, and hotel gifts or points and credits toward a discounted or free future hotel stay. Of course this demands loyalty to get this kind of added value. Top elite status is the objective if high value-added benefits from a hotel loyalty program is the goal.

 

Marriott Rewards – 33 million members

Marriott Rewards at 33 million members comes in second place in membership. The source of this number is from January 10, 2010 on Marriott’s site describing the Marriott Rewards program. The Wall Street Journal article  last week gives additional insight to Marriott Rewards. Alexandra Berzon’s piece on Ritz-Carlton Rewards – “Ritz-Carlton Bows to Recession, Adds Rewards” provided information from Ed French, Senior VP Marriott Rewards, indicating about 50% of all Marriott brand hotel stays are by Marriott Rewards members.

 

Hilton HHonors – 26 million members

Hilton HHonors has about 26 million members according to this HHonors press release in August 2010 regarding the complimentary internet access globally for HHonors Gold and Diamond elite members. This article states more than 1,000,000 new members joined HHonors in 2010. The article also states 40% of Hilton Worldwide hotel brands occupancy is by HHonors members representing 40 million guests.

So Hilton Worldwide has about 100 million guests per year with a capacity of about 216 million room nights per year. 60 million of these guests are not members of Hilton HHonors. That is an awful lot of HHonors points left on the table by consumers.

 

Starwood Preferred Guest – 11 million+ members

Starwood Preferred Guest with an estimated 11 million+ active members is next on the list of loyalty program membership. SPG illustrates the confusion when it comes to determining program membership. Most sources site a much higher SPG program membership, but sources I found on Starwood sites use the term “active members”.

WebFlyer has a table with hotel loyalty program membership numbers on its website. Their table lists SPG at 25 million members from May 2007. Wikipedia states 41 million members on the Starwood Hotels & Resorts Worldwide page, however, the source link provided links to Starwood’s 2009 10-K report and I did not find any reference to SPG membership numbers in that report.  The interesting find from the 10-K document regarding SPG is the fair value future redemption financial obligation of outstanding Starpoints was estimated at year-end 2009 as $689 million. This includes a “breakage” estimate for points Starwood projects will never be redeemed, but no details as to the proportion of breakage points is provided.

The 11 million+ active SPG members number I cite is based on two sources published by Starwood Hotels. The first source is from a 2008 Westin Hotel Development pdf brochure.  This brochure states SPG members accounted for 46% of Westin room nights in 2007. A 2009 development brochure for Sheraton Hotels updates this information with the statement, “with over 11 million active members”, and “in 2008, SPG contributed 37% of Sheraton room revenue globally”. 

So 63% of Sheraton Hotels global room revenue did not earn points for those hotel guests?

The use of the term “active members” describes SPG members who have stayed in a Starwood Hotel in the previous 36 months. The pattern shown from Starwood documents indicates there may be around 12 million active SPG members currently. Perhaps there are 25 million or 41 million SPG members through enrollment and SPG American Express credit card membership, but the number of active members reduces the total greatly.

Active membership is a crucial distinction when it comes to counting members. As shown for IHG Priority Club, only about 20% of its 50 million members are considered active members which places it on par with SPG.

While most hotel loyalty programs have terms and conditions stating member accounts will be closed for lack of activity, the reality is that Hilton HHonors is really the only program for which I have seen a policy to aggressive purge its membership database to eliminate members who do not use the program for a year or two. I held on to Marriott Rewards points for several years without a hotel stay and then redeemed points after several years of inactivity. HHonors closed my account and purged my point balance in September 2009 after about 30 months of inactivity.

 

Hyatt Gold Passport – 10.2 million members

This number actually comes directly from a June 2010 interview I had with Jeff Zidell, Vice President Hyatt Gold Passport for an InsideFlyer piece published July 2010. Hyatt Gold Passport just won the first annual Colloquy Loyalty Innovation in Hospitality/Travel award for its program changes and promotions. The article states visits among Diamond members rose 41% in 2009 compared to 2008. No surprise to me since Hyatt was giving away Platinum and Diamond elite status for asking beginning in May 2009.

Best Western Rewards – 11 million members

Even though 11 million is a larger number than Hyatt’s 10.2 million, I have placed Best Western below Hyatt Gold Passport due to the statement by Best Western President and CEO David Kong in this February 2010 Hotel News Now article  that about 35% of this membership is considered active which reduces the 11 million number down to about 4 million active members.

 

Choice Privileges – 10 million members

Choice Privileges gave Felicia Jones of Houston, Texas 10 free hotel nights in May 2010 for becoming the 10 millionth Choice Privileges customer.

 

Wyndham Rewards – 8 million members

This number is from a press release announcing a relationship between Loyalty360, the loyalty marketer’s association and Wyndham Hotel Group from September 10, 2010.

 

Carlson Hotels Goldpoints Plus – 5.5 million members

This data is from my attendance at the Carlson Hotels Global Ambition conference in March 2010 where 5 million members was the number being used when describing Carlson Hotels in 2010. Ambition 2015, the five year growth plan for Carlson Hotels and goldpoints plus set a goal of 1 million new members in 2010. A subsequent article in Carlson Hotels “Hotline” quarterly magazine for 2010-Q3 on the progress of Ambition 2015 states 440,489 new members joined Goldpoints Plus through May 2010.

 

Accor A|Club – 5 million members

Accor is the French-based hotel company, ranked #4 globally by number of hotels behind Wyndham, Choice, and IHG. Accor A|Club is celebrating its 2nd birthday this month. The 5 million number is from Accor A|Club’s birthday announcement. Loyalty traveler posted about the Accor A|Club birthday promotion for free stays, elite status and bonus points.

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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