Are hotel loyalty members simply a target?

This is an article I wrote for November 2014 InsideFlyer magazine about hotel loyalty program targeted promotions. This past month Hyatt, IHG and Marriott came out with another set of targeted offers for loyalty members with Hyatt Stay More Earn More, IHG Set Your Sights and Marriott Rewards MegaBonus.

Loyalty Traveler – Hyatt Gold Passport Stay More Play More Jan 15 to April 30, 2015 registration (January 9, 2015)

Loyalty Traveler – Our IHG Set Your Sights tasks for 50000 points Jan 1-Apr 30, 2015 (Dec 15, 2014)

Loyalty Traveler – Marriott MegaBonus offers for Feb 1 to April 30, 2015 (Dec 19, 2014)

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Are hotel loyalty members simply a target?

Hotel industry conferences I have attended and research articles for the past several years have encouraged hotel loyalty programs to use data mining of guest profiles and expenditures to customize hotel loyalty promotions. Your loyalty program activity and credit card expenditures are tracked, profiled and stored in a marketing folder for customized pitches. The objective is to engage new customers to hotel brands, re-engage existing loyalty members who have reduced activity and incentivize profit generating hotel loyalty members to spend more with the hotel chain.

Marriott Rewards, Hyatt Gold Passport and IHG Rewards Club are three major hotel chains with targeted promotions for late 2014 travel. These promotions are designed to target an individual guest’s travel profile.

Marriott Rewards has differentiated the recurring MegaBonus promotion for several years. Over the four month period September 15 to January 15, 2015, the generic offer is double points beginning with your second stay, up to 25,000 bonus points. This could mean $2,500 to $5,000 in hotel spend to earn 25,000 bonus points. My offer is 2,500 bonus points for each stay beginning with second stay, up to 25,000 bonus points. My offer is better for me than double points. I am typically a one-night stay traveler. Six $100 one-night stays earn 12,500 bonus points, even if they are all at Residence Inn or TownePlace Suites. Double points earns 5,000 bonus points for the same spend when avoiding the extended stay brands. Other targeted offers do not earn any bonus points until reaching 12 or even 20 nights. These offers have the potential to earn from at 30,000 to 55,000 bonus points, but only if you stay 18 to 30 nights. Marriott Rewards is generally friendly in allowing elite members to change their targeted offer.

Hyatt Gold Passport has at least eight targeted offers for September 1 – November 30, ranging from a maximum 2,000 bonus points for one stay to 50,000 bonus points for 20 nights. My offer was 2,000 bonus points per stay for three stays. Hyatt Gold Passport allowed some members with no offer and others with a lower points offer to enroll for the 50,000 points version which earns bonus points cumulatively for every five nights at 5,000; 10,000; 15,000 and 20,000 bonus points. My Hyatt offer for 6,000 points after three stays is a good one for my travel pattern since I am unlikely to stay ten nights during the promotion period.

IHG Rewards Club openly advocates the targeted approach to hotel loyalty promotions with the current September 1 -December 31 Into the Nights. This promotion follows two versions of targeted offers from The Big Win in late 2013 and early 2014. IHG members with fewer hotel stays in 2014 appear to have easier offers for earning 50,000 bonus points or two free nights than more frequent guests. Some IHG Rewards Club members need more than 15 nights to earn their full Into the Nights bonus offer, whereas other members like me who have stayed infrequently at IHG hotels this year need only stay three paid nights to earn two free nights at any IHG hotel.

Hyatt, IHG and Marriott loyalty programs received plenty of negative responses from unhappy members on travel forums to the idea of targeted offers. Perhaps a better promotion strategy for hotel loyalty programs was pioneered by Starwood Preferred Guest (SPG) in 2008 and 2012 when SPG members had a choice from a variety of promotions offers.

SPG ran a promotion in 2008 called You Choose. The promotion ran October 1 to December 31 and members had a choice of 12 different offers ranging from double elite credit or free nights or bonus points. The best part was the member registration deadline was November 15, midway through the promotion period, and hotel stay credit applied retroactively. We can’t expect the kind of lucrative bonuses these days like loyalty programs offered during the ‘Great Recession’, yet the gesture of member choice is significant. SPG followed up in 2012 with Nice Choice, a promotion I consider to be a great prototype for member choice. SPG members could choose three consecutive months for their promotion period between May and September with a choice of six different bonuses including free nights, discount awards and bonus points. I think SPG had a great alternative to targeted offers with these past promotions. The ability to select our own offers from promotion choices is a respectful signal to loyalty members that we are the ones best suited to predict our own travel pattern.

Hyatt, IHG and Marriott hit their target with my bonus points promotion offers that I can take to heart when planning my hotel travel. My sense though is there are many other hotel loyalty members who would prefer more choice instead of being a target waiting to be hit with an unwelcome promotion.