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February 8, 2017

Hotel Loyalty Programs Get More Hospitable

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Hotel loyalty programs have gotten too complicated. Too hard to earn and redeem points, travelers said. Now hotels are changing course.

Hilton is the latest major hotel company to overhaul its loyalty program.

In addition to rebranding from HHonors to Hilton Honors, and also changing the company name from Hilton Worldwide to just Hilton, the chain is making four major changes to its program.

Hilton Honors members will now be able to use points on Amazon.com (the exact conversion rate has not been determined). Members will be able to use a combination of points and cash to redeem rewards. They will also be allowed to pool points with up to 10 friends and family. And elite Diamond members will be able to keep their status even if they do not travel within a year if they encounter any reasons for not being able to get away, such as an illness.

“Contrary to popular belief, we want our Hilton Honors guests to use their points,” says Mark Weinstein, senior vice president and global head of customer engagement, loyalty and partnerships for Hilton.

It’s a reversal of strategy fueled by the fact that travelers now have so many choices to book their stays. In addition to getting hotel rooms from online travel agencies (OTA’s) such as Expedia and Travelocity, they also can stay in people’s homes via AirBnB and vacation rental websites.

And hotel companies have complicated the process by introducing one brand after another. Marriott, after its purchase of Starwood Hotels and Resorts, now has 30 brands. Hilton just introduced its 14th brand last month—The Tapestry Collection of high-end hotels.

“If you think about the old days of hotels, the only competition we had to sell our rooms was travel agents,” says Jamie Russo, vice president of loyalty for Choice Hotels. “That changed pretty dramatically with the advent of OTA’s … We have another alternative lodging type of providers out there and if loyalty doesn’t matter to those people, they may try those. So loyalty has to matter and our proposition is to make them matter from day one.”

For that reason, Choice last year changed its program to allow its members to redeem points immediately by using them for gift cards from Amazon and other vendors. They also got rid of expiration dates for staying in the loyalty program. Frequent guests can also ask for immediate rewards such as gift cards from Uber.

The result has been the addition of about 4.5 million members to the program, Russo says. That’s about 1 million more than the previous year. And $4 of $10 is being spent by loyalty program members.

“Our members are much more active than they’ve ever been,” Russo says.

Wyndham also streamlined its program by letting members get a hotel stay for only 15,000 points across the board, in either an economy hotel or a luxury brand. It applies even to its resorts.

“What good loyalty programs need to ask themselves is, Are we really simple?” says Noah Brodsky, senior vice president of loyalty and engagement for Wyndham.

Brodsky’s strategy is to focus on hotel stays and not extraneous benefits such as Amazon credits.

“It’s a really bad value,” he says. “While it may seem like more options it’s actually a worse use for your points. Using your points for something like Amazon.com is always going to be a worse conversion rate than using it for a hotel stay. The best value for using your points is to stay at the hotel.”

Brodsky says Wyndham even let Rewards members use 15,000 points to book hotel stays at the Super Bowl this past weekend, usually one of the times when rates skyrocket.

Hotel experts say that this competition could be good for travelers.

“I think we will see a trend toward simplification and making rewards easier to obtain,” says Jon Bowen, a professor at the Hilton University of Houston.


Copyright 2017 Gannett. All rights reserved. From http://www.usatoday.com. By Nancy Trejos, USA TODAY.
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