Market Metrix founder Jonathan Barsky published a piece last week on hotel loyalty program effectiveness – ‘Hotel loyalty programs offered by chains and independents are growing in popularity’. The introduction to the article concludes hotel loyalty programs are easier to use than frequent flier programs.
Hotel loyalty program is the fourth most cited reason for choosing a specific hotel, behind:
- Past Experience
- Hotel Loyalty Program
The percentage of elite members in hotel loyalty programs is up 5% in 2011 according to this article.
Market Metrix is a research organization serving the hospitality industry. One of their functions is to analyze hotel guest feedback. Hotel loyalty program effectiveness is measured by the percentage of guests who state hotel loyalty program was a primary reason for choosing a specific hotel.
Hilton, Starwood and Hyatt have seen the greatest growth in hotel program effectiveness in the past two years. Hilton HHonors leads the pack with 39.2% of guests citing hotel loyalty program as a primary factor in choosing a Hilton brand hotel. Starwood had the overall highest improvement in the past two years and ranked second to Hilton with 37.7% of guests surveyed citing SPG as a primary factor in choosing the Starwood Hotel.
While Hilton increased 4.6 percentage points from 2009 to 2011 and has the highest rank, Starwood increased 5.9 percentage points for the highest program gain since 2009 when it was third behind Marriott and Hilton.
Marriott Rewards is the interesting program for me in that it dropped from first place in 2009 (35.0%) and 2010 (36.2%). Guests citing Marriott Rewards as a primary factor for hotel choice declined in 2011 to 35.2%. This two year change is only an improvement of 0.2 percentage points.
I attribute part of the drop to lacklustre Marriott Rewards promotions (another Marriott MegaBonus) and the rewards devaluation of 2009 when the program dropped its progressive points discount for any reward stay two nights or longer to a simple 5th night free program. This was a major devaluation probably exceeding Hilton’s 2010 changes with the hotel category shift and new Category 7 hotel rewards. Then again, Marriott Rewards improved ranking in 2010 and Hilton improved for 2011. So who knows?
Hyatt saw a big jump from 2009 (17.0%) to 2010 (21.3%) when the program was undisputably the most rewarding hotel loyalty program with back to back high value promotions for points, miles and free nights and complimentary elite status along with enhanced elite member guaranteed benefits on stays. Hyatt took a slight drop in 2011 to 21.0% and that might be attributable to its promotion pullback and the elimination of complimentary elite membership to anyone who asked.
IHG Priority Club sits around 25% year-to-year. There was a dropoff in program effectiveness from 2009 to 2010 and now the program is back up again. Priority Club has offered generous promotions in the past year and done a lot with social media.
Choice Privileges and Wyndham Rewards are an interesting comparison with far greater percentage of guests citing Choice Privileges (2011 = 26.0%) as a factor compared to Wyndham Rewards (2011 = 13.5%) for choosing a specific hotel. Both programs offer high value rebates, but I think Choice Privileges does far better marketing for its brands. I also think Choice Privileges loyalty program marketing is a bit disingenuous with promotion wording for its recurring offer of “earn a free night after two hotel stays” when the actual promotion bonus is generally for 8,000 points and that is only sufficient for a reward night at about 25% of Choice Hotels.
Choice Privileges points can be used at Preferred Hotel Group and Barcelo Resorts. A big plus.
There is a table of hotel loyalty program data and more loyalty program information in the Jonathan Barsky article.
The results here caught my attention after spending my first hour today reading the 34-page thread on Hilton HHonors Premium Rewards and seeing numerous posters claim they are thinking of leaving Hilton HHonors with this latest devaluation of point value for the program. Premium Rewards offer a unique opportunity to book high category rooms, even Presidential Suites, but at a relatively low redemption value around $3.33 to $4.30 per 1,000 points.
The new HHonors Points & Money Rewards are a true enhancement in my opinion and actually might prompt me to spend more time at Hilton brand hotels.
I’ll be interested to see the Market Metrix 2012 hotel loyalty program effectiveness ranking.