Mar172011

Beyond Points – The New Identity of Hilton HHonors

Hilton HHonors has something to say to its loyalty members. The HHonors hotel loyalty program wants to de-emphasize points and focus on travel experiences as it markets ten different hotel brands with a more singular global identity in a new $25 million global PR campaign.

I respect the concept of creating a unifying Hilton identity for ten different hotel brands. The hotel loyalty program should function as a brand-unifying force in my opinion.  Too many travelers do not know which hotel brands are associated with which global hotel chain. There are about 75 hotel brands in the top 10 hotel chains.

However, stating HHonors new identity is “going beyond rewards” sends an opaque message to this loyalty traveler.

Hilton HHonors as the 11th brand – What a Concept!

Hilton’s press release yesterday regarding the launch of this $25 million campaign for a new HHonors rebranding initiative is as vague as the details were regarding HHonors hotel category assignment changes in late 2009.

Rather than focusing solely on the destination or earning points, Hilton HHonors is focusing on the unforgettable experiences people have while traveling, allowing Hilton Worldwide’s hotels to serve both as the backdrop and the conduit to genuine human moments.

In my opinion, Hilton Worldwide hotels or any other hotel’s raison d’etre is to serve as the backdrop and conduit to traveler experiences. HHonors from the business side is just the marketing platform for the objective of making a brand loyal consumer. From the consumer side HHonors provides the consumer with competitive value through brand loyalty to reject alternative hotel choices when traveling. Outside of the hotel my experiences will be quite similar whether I am staying at the Hilton or the Marriott across the street or the Starwood property around the corner.

My primary reason for loyalty to Hilton in the 1990s was the ability to position myself in the center of a city for sightseeing and business at a relatively comparable rate to Priceline with a lot more hotel stay benefits as a HHonors Diamond member. The loyalty program was my only reason for choosing Hilton due to the benefit of airline miles-to-HHonors-points exchanges. I could focus my travel spend on airlines and exchange miles for points and get free hotel room nights.  Prior to that point I rarely stayed in city centers due to the high cost of hotels and I wasted many vacation hours commuting from cheaper hotel locations to the sightseeing destinations I had traveled to visit.

I have many beautiful HHonors memories like walking out of the Conrad Centennial Singapore back in 2002 for an incredible evening at the Merlion dedication festival while standing in a crowd of locals estimated at more than 100,000 for an extraordinary fireworks display with dragon boats in the harbor and performance artists scaling skyscrapers illuminated in blue light.

I probably shared that experience on FlyerTalk back in 2002. But that was an experience that the hotel location and my luck of travel dates made possible rather than the hotel. I was using points for a free hotel stay.

Hilton HHonors wants to change the way our members view loyalty programs,” said Jeff Diskin, senior vice president, global customer marketing, Hilton Worldwide. “Our goal is to shift the conversation from earning points to creating memories, from being just about functionality to the human, more emotional and experiential side of travel.” Hilton press release Mar 16, 2011.

 

Loyalty Traveler response to the new view of HHonors: 

There are only a few dozen blogs like Loyalty Traveler that focus on the earning points side of travel. Shifting the conversation away from points on social media sites like FlyerTalk.com and MilePoint.com is unlikely to happen.  The raison d’etre for consumer-oriented social media sites like FlyerTalk.com, MilePoint.com and blogs on BoardingArea.com is to share travel tips and experiences. 

The conversation around HHonors in the 12 years I have been a member of FlyerTalk has always had a dimension of humanity, emotion and experiences.  That is a major contribution these sites make for travelers seeking information on hotels. 

TripAdvisor.com is not going away and is actually a vital reference source for consumers. I share some of my hotel experiences, but I do not write about most of my hotel stays.

But Hilton HHonors does not control the message on these social media sites. 

Thousands of travel blogs are published daily with a focus on the human, emotional and experiential side of travel. But these sites have limited brand messaging potential since Hilton HHonors does not control these sites either and a hotel generally receives minimal attention in unsponsored travel destination articles. 

Hilton can always sponsor blog posts through compensated travel experiences for a travel blogger. 

And that reminds me!

I have not responded to a recent email offering Loyalty Traveler two free nights at any Hampton Inn if I write a hotel review.

Unlike TripAdvisor.com, hotel reviews are not my raison d’etre. 

Loyalty Traveler simply provides consumers with information that I think is useful and necessary for the set of travelers who value the functionality of hotel loyalty programs. There are plenty of better writers and photographers who provide experiential stories and imagery of the hotel experience. 

Loyalty Traveler blog will maintain its focus on the functionality of hotel loyalty programs for frequent guests who realize that gaining a better understanding of the economics of hotel travel will lead to more and potentially better hotel travel experiences.

Loyalty Traveler Dreams of the Future in Hotel Loyalty Programs

What I would love to see in hotel loyalty programs is the option to use loyalty points for things like a Jacuzzi tub room or junior suite upgrade or balcony room or limousine pickup from the airport. Those are experiences within the control of a hotel that the hotel loyalty program can provide to loyalty members. 

Imagine if any HHonors member, not just elites, had access to an array of hotel stay benefits using points for upgrades, meals, services, and local experiences.  The HHonors hotel loyalty programs can truly reinvent itself along an experiential model in a guest-focused loyalty program. 

Of course, I would still want to see elite level complimentary benefits, but hotel stay value-added options using points is a concept with great consumer-friendly potential and currently is really underutilized in the hotel industry. Many hotels already have numerous points redemption options, but these types of options are still quite limited as a hotel loyalty program system-wide option.

The challenge of course for this type of system change in hotel loyalty is establishing point values for hotel services and upgrades that are fair value compared to room redemption values. Hotel loyalty programs keep adding low value redemption options if you want a car rental or an airplane ticket or a new camera. 

Greatly expanded points redemption options for hotel stay experiences would provide FlyerTalk, MilePoint and other social media forum members more experiences to share in social media conversation. 

Loyalty Traveler’s viewpoint is consumer motivation for hotel stay purchases is shaped in large part by the perceived value of hotel loyalty program points and stay benefits.

An Alternative Look into the Future (Shock) of a new HHonors Identity 

Our goal is to shift the conversation from earning points to creating memories, from being just about functionality to the human, more emotional and experiential side of travel.” – Jeff Diskin

Motivating consumers to maintain brand loyalty with Hilton Worldwide hotels is the marketing objective of Hilton HHonors. 

There is another future (shock) scenario for HHonors I see as a viable direction for hotel loyalty programs that choose to move beyond points and rewards in the age of social media opportunity. 

Shifting the conversation to the hotel location as an experience in itself and the hotel as a conduit to experiences is probably a viable marketing strategy in the growing world of social media exposure and participation as a  tool for consumer engagement. 

Hilton HHonors claims 27 million members currently and more than 10% membership growth with 2.5 million new members in 2010. 

That is substantial growth in HHonors membership for 2010, the same year the program devalued its points with the addition of a new hotel category and the increase in cost for a free night using points at more than 80% of its 3,600 hotels in 82 countries. 

Loyalty Traveler attributes some of that new member growth in HHonors to consumers looking for better hotel value in 2010. Six months of Hilton HHonors free night promotions in 2010 provided a good monetary rebate on hotel stays.

2011 looks to Loyalty Traveler to be a social media campaign with a new HHonors message – ‘beyond free nights’. 

What if HHonors’ goal truly is to move HHonors away from the functionality of points to the social and experiential side of travel? 

‘Marketing by the Masses’ rather than ‘To the Masses’ 

The concept of crowdsourcing is becoming more prevalent in the hotel industry’s use of social media. This is the marketing revolution of the current age. A membership base of 27 million provides a high potential for crowdsourcing consumer-generated content through creative hotel loyalty marketing. The hotel industry is devoting resources to channel social media in visually and emotionally attractive ways, yet structurally organized and better controlled in a promotional way for the hotel company than sites like FlyerTalk and MilePoint and independent blogs like Loyalty Traveler.

Several promotions over the past year like Cathay Pacific’s 80 days of free flights request user-generated videos and stories. Crowdsourcing is still in its infancy for travel marketing on the web, but I think travelers will see many more contests and sweepstakes and social media pages for submitting user-generated content that the hotel loyalty program can later repackage for its webpage displays of customer experiences. Crowdpower positive messaging of products and brands is a marketer’s dream world. 

The result of crowdsourcing large quantities of visual media and experiential stories is the marketing impact the hotel loyalty program can generate across social media. The hotel loyalty program might be able to grow new membership primarily through social media marketing that spreads across the masses as individuals share their hotel and travel experiences. 

Social media can be employed by Hilton HHonors to facilitate shared travel experiences through a variety of company dominated/controlled social media sites like Hilton and HHonors Facebook pages, Twitter messaging, FourSquare, Gowalla and other geo-location messaging sites and a variety of other social media emerging platforms. 

Social media has far-reaching impact across the masses for the ability to reach millions of new people with the product message. 

For example, company sponsored Facebook and Twitter contests and sweepstakes spread the word about a brand. All the hotel chains have used sweepstakes and giveaways for brand exposure on these popular social media sites in the past year.  The social network means that one person responding to Hilton’s Facebook or Twitter promotions spreads the word to many of that person’s followers. 

Even someone like me who uses Twitter sparingly has over 1,000 followers. My social reach is calculated at somewhere between 15,000 to 30,000 people in my last 50 tweets according to TweetReach.com. A clever social media promotion has the potential to spread brand messaging to millions on the cheap. Just look at Priority Club’s promotional successes over the past year with social media promotions like the Anywhere photo challenge and recent failure with “Win it in a Minute“. 

Priority Club and Marriott Rewards have even developed their own company managed discussion forums for user generated content about their hotel brands. This could be an alternative to FlyerTalk and MilePoint, but the conversations on these company sponsored sites is not nearly as robust and informative as discussion of the same topics on FlyerTalk.com with its 300,000+ members. 

Loyalty points and miles are one way to attract new travelers and retain repeat customers. Social media sharing may quite possibly open the door (literally) to a greatly expanded membership base who will remain engaged with the brand through the social media experience rather than points as the primary motivator of loyalty. Social media experiences may ultimately provide a more loyal community of travelers than hotel points. 

HHonors new identity may strive to take hotel loyalty down a different path – Beyond 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.

More articles by Ric Garrido »

Comments

  1. Why do I have sneaking suspicion that this announcement on the part of Hilton means another “program enhancement” (which means devaluation) will shortly be announced?

  2. I somewhat agree with you but I don’t discount what they are saying. For me, the total sum of my reason for accumulating point is exactly what Hilton says – creating memories for a lifetime. It remains to be seen whether they think they can dilute the program at the same time. I sure hope not.

  3. Dilution of reward stay and upgrade benefits will lead me to independent establishments that provide real local experiences…not to chain hotels like Hilton and its 10 carefully controlled brands. In downtown Charleston WV I’m already selecting a B&B because only that place provides a decent breakfast….not Hampton and not Embassy Suites. They’ll serve the breakfast whenever you want (not the case at many B&Bs), and the tariff is the same as Hampton’s lowest published rate, a government rate.

  4. I’d like to reiterate the central idea of this piece is my subjective look at whether a hotel loyalty program like Hilton HHonors can actually move beyond points.

    Hilton was rather vague with the press release and I do not know what Hilton HHonors actually means by its statements about focusing the discussion on experiences rather than points.

    I am not suggesting that Hilton plans to eliminate its points program. This blog post is simply my vision of the potential for a major points-based hotel loyalty program like HHonors to move beyond points.

    I agree with you @Steve and with Hilton’s message that the memorable experiences are the goal of travel.

    I focus on points since that is an integral part of my business for analyzing hotel loyalty programs.

    My objective and the objective of many hotel loyalty program members is earning and burning points to provide more opportunities to enhance travel with good quality hotel stays and facilitate pleasant and memorable travel experiences.

    I don’t always remember the cookie-cutter adequate rooms I have stayed, but I sure remember many of the hotel dumps where I slept or tried to sleep when I booked unknown, independent hotels for cheaper rates.

    @Explore touches on the primary impediment to moving beyond points. There are interesting boutique hotels and other hotel chains that provide a different environment than another Embassy Suites made-to-order breakfast or Doubletree cookie. Points are a motivating factor for sticking with one loyalty program.

    The hotel loyalty points and benefits are the added value that makes brand loyalty and direct bookings competitive. Until hotels move beyond the practice of shuffling excess rooms to discount online travel agencies, the hotel loyalty program points provide the consumer incentive to book direct through hotel brand channels.

  5. Loyalty programs can be a double-edged sword; I have not forgiven Hilton for all my points expiring and have chosen them less often because of it.
    Also, the number of points to get a free Hilton rooms is significant, and they rarely have worthwhile promotions compared to Priority Club or Hyatt and are not so generous in redeeming points for miles as Marriott.
    HH has soured me somewhat on Hilton hotels themselves. After all, it can be hard to tell, once in a hotel room, whether you are in a Crowne Plaza or a Doubletree or a Courtyard.

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