Hotel chains race to re-engage guests with transformed loyalty plans

Freshly revamped loyalty programmes show a turning point in how chains are re-engaging guests and increasing direct bookings and incremental revenues as customers get back on the road.

  • Loyalty programmes get more creative and competitive to increase customer engagement
  • Hotels are moving from being a ‘travel product’ to a ‘lifestyle’ product
  • Perks are curated to appeal to both domestic and international travellers

Freshly revamped loyalty programmes show a turning point in how chains are re-engaging guests and increasing direct bookings and incremental revenues as customers get back on the road.

Chains including Global Hotel Alliance (GHA) and Shangri-La Group are going beyond the traditional earn-and-burn points for free nights, breakfasts, late check-outs and upgrades.

Shangri-La Group’s revamped Golden Circle comes with a new Members Day flash sale on the sixth day of each month

GHA Discovery, owned by independent hotel companies including Kempinski Group and Minor Hotels, relaunched last December, fielding the industry’s first digital rewards currency, Discovery Dollar or D$.

Members earn these dollars (D$1 = US$1) from day one, starting with four per cent on eligible spend, and higher as they move up the membership tiers.

Currently, a stay is required to redeem D$, but from next year, D$ can also be earned and burned in any GHA brand hotel on spa, dinner or drinks – even at home and without a stay. The programme already has offers that give members free access to hotel facilities such as beach, pool, gym and sauna.

To incentivise spending beyond room nights, the programme dangles not only stay deals but local offers – typically discounts on F&B, spa treatments – and unique experiences for members to book. A Helicity experience offered by Hotel Indonesia Kempinski Jakarta takes guests on a 30-minute private helicopter tour of the city, with a one-minute video as a keepsake.

Some 500 local offers and exclusive experiences are available, according to GHA Discovery CEO, Christopher Hartley. With NH Hotel Group having joined the alliance on June 20, Hartley expects a “substantial” boost in these offerings. Owned by Minor, NH has more than 350 hotels under three brands.

Shangri-La Group unfurled its revamped Golden Circle in April with similar threads: a simple and clear way to earn points (US$1 = 15 points) for all Shangri-La products and experiences. Special benefits, such as Shangri-La All Access, grants members full access to hotel facilities where they live, even without staying.

It offers more flexibility, such as using cash, points or both for stays and dining experiences, and removing blackout dates and dynamic redemption rates for all room redemptions. Plus it includes a new app that allows members to plan a trip, book a gourmet experience and buy items from the Shangri-La boutique directly via mobile.

A new Members Day incentivises members to book perks-laden stays, be it family vacation, staycation and others, curated by the Golden Circle team and released on the sixth day of each month. These offers are available for only 48 hours.

Christine Lu, Shangri-La Group’s chief marketing officer, said: “It’s not just about offering our members limited-time offers and good deals, but a curated showcase of the full range of Shangri-La products and experiences across the entire group – from our F&B offerings, Shangri-La branded merchandise, to our wellness and family experiences. It is meant to create a regular platform for members, so that they have reasons to engage with us on a more regular basis.”

Hartley: especially important to incentivise customers after their long break from travel

Changes that stick
The pandemic saw chains scrambling to cater to locals with deals such as family staycations, work or study from hotels, pool access, food delivery, and so on. This changes the idea of hotels from a ‘travel’ to ‘lifestyle’ component. As Lu puts it, it is about making Shangri-La “their second home”.

Chains are mindful of changes in customer behaviour as well. The frequent business traveller, for instance, may replace some trips with virtual meetings, but increase leisure and ‘bleisure’ travel.

This means chains have to ensure their programmes are relevant in post-lockdown, catering for both local and international demand, and new guest aspirations. This accounts for the loyalty programme transformation in the industry, and the eagerness of chains to reintroduce these programmes – and themselves – often with tactics such as giving double points or, in the case of GHA Discovery, double D$ in its recent campaign.

“We feel it is especially important to incentivise our customers to re-engage with GHA Discovery again after the long pandemic and to learn about our new programme. And giving them more D$ as a reward is a great way to achieve that,” said Hartley.

Some D$25 million have already been issued this year, which shows the programme is aiding the ongoing recovery for member brands, he said.

Fierce competition
The likes of GHA and Shangri-La must stand shoulder-to-shoulder – or taller – with behemoths such as IHG, Accor and Marriott, which have also transformed their loyalty programmes.

GHA Discovery, with 800 hotels and 22 million members is big, but small when compared with, say, IHG One Rewards with 6,000 hotels and 100 million members.

Already, loyalty plans are jostling to stand out through differentiation. A case in point is Good Travel With Marriott Bonvoy, which pulls together experiences that centre on environmental and marine preservation, as well as community engagement, across its hotels in Asia-Pacific for Bonvoy members to book.

A Coral Seed Making experience at The Ritz-Carlton in Okinawa raises awareness of how corals face threats from global warming and includes a lecture on coral ecology and making seedling in The Onna Fishing port. It costs 9,000 yen (US$66) per person.

The value of Good Travel goes beyond revenue, said Bart Buiring, Marriott International’s chief sales and marketing officer, Asia-Pacific.

He added: “The pandemic has shifted the way people travel. Travellers are more thoughtful and are increasingly making decisions with purpose in mind. We expect to meet these evolving demands by providing them with more ways to connect with local communities on a deeper level.”

Good Travel now features 100 hotels across the region since its pilot last year. Most of the experiences are new, with hotels creating them with local experts and NGOs, said Buiring, while the handful that were already available have gained more visibility through Marriott Bonvoy.

The response has been “overwhelming”, Buiring said. As to whether Good Travel will be expanded globally, he said the focus is to first expand it further in the region, especially as travel gradually returns.

Michael Marshall, chief commercial officer of Minor Hotels, said GHA Discovery can compete well.

“From our perspective, GHA ensures independent and culturally diverse hotel brands in the upscale and luxury segment can compete with major global brands, while retaining their individuality and uniqueness,” he said.