Independents adapt loyalty program offerings
Independents adapt loyalty program offerings
16 AUGUST 2013 7:42 AM

Independent hoteliers are adapting their loyalty programs, evolving them from perks to points in an effort to attract more group and leisure demand.

REPORT FROM THE U.S.—In 2006, Preferred Hotel Group launched “I Prefer,” an independent hotel loyalty program that awarded members benefits, such as early checkout and free Internet, with every hotel stay. Over the past seven years, the program has done well, but it needed to evolve to compete with the brands, said the collection’s President Lindsey Ueberroth.

“The reality is there are loyalty programs in front of everyone’s day-to-day lives,” she said. “People are motivated by points-based programs.”

On 15 August, the company will re-launch the programs as “iPrefer,” evolving it into a currency-based points program for global independent hotels, which awards its members one point at participating hotels for every pre-tax dollar spent on room reservations. Once members earn points, they can trade them in for $50 credits to be used like gift certificates toward payment for any stay, Ueberroth said. Each $50 certificate equals 2,500 points.

Many other independent collections and companies are adapting their loyalty programs as well, evolving them from perks to points in an effort to attract more group and leisure demand, sources said.

“We have found through our internal guest research that the desire to stay at a hotel with a loyalty program had become increasingly important for our customers,” said Tom Botts, EVP and chief customer officer at Denihan Hospitality, in an email.

Denihan’s Affinia Hotel Collection was one of the first independent hotel collections to join Stash Hotel Rewards, an independent hotel rewards program that awards members five points per dollar of revenue in exchange for free hotel stays. Since Denihan began using the program, the company has seen a 20% increase in the frequency of stays by existing guests after they have joined Stash, Botts said.

More independent hotel managers are joining loyalty programs simply because their owners or guests called for it, sources said.

For example, members of Vantage Hospitality’s Lexington Collection, a collection of independent hotels, came to the company demanding a points program. In February, the company joined Voila, a rewards-based program that offered members the flexibility they needed, said Laura Crawford, brand manager and director of membership services for Lexington by Vantage.

“We had the unique challenge of finding a points program that would fit our culture, fit our independent hotels but still allow us to brand it,” she said. “We did a lot of research and kept coming back to Voila.”

Crawford said Voila, which awards members 10 points per dollar spent, offered Vantage the ability to white label everything with “Lexington Rewards,” which is something that was important to the company. In addition to white-labeling their membership cards and invoices, Lexington is able to choose everything from when billing would be done to how many points could be earned on discounted rates at its 21 properties participating in the program.

“The members of our existing loyalty club have responded extremely well to us switching to the points program,” Crawford said. “Before they felt like they were missing out on points.”

Membership benefits
Most independent hotel loyalty programs are in their infancy stages, so benefits are evolving, but one benefit to both the hotelier and the guest is the hotelier’s ability to yield manage rooms, explained Jeff Low, founder and CEO of Stash.

With certain brand programs, for example, it could cost a member 10,000 points to stay at Hotel X on New Year’s Eve.

With programs like Stash and Voila, hoteliers are able to “name their price,” offering them the ability to fill rooms during low occupancy periods and offer dynamic pricing during compression periods, Low explained.

Preferred Hotel Group’s iPrefer will present its benefits in a tiered membership structure:

  • Silver (0 to 4,999 points): Points for eligible bookings, complimentary Internet, priority early check-in and late check-out;
  • Gold (5,000 to 14,999 points): Silver membership benefits plus welcome amenity and upgrade on availability;
  • Platinum (15,000-plus points): Gold membership benefits plus 10% bonus points earnings at Preferred Hotel Group cost.

Ueberroth said at launch iPrefer plans to have 500 of its 650 hotels participating with a goal of 100% participation within the first year of the program.

Like iPrefer, Lexington Rewards also has tiered membership—Phoenix, Orion and Centaurus— Centaurus being the highest level. Phoenix is the first level, and for every dollar spent members receive 10 points. For Orion and Centaurus, each member receives 10 points per dollar plus bonus points.

“In addition to the number of points earned per stay, there are levels of onsite benefits that increase,” Lexington’s Crawford said. “Those can be anything from early check-in, late checkout, free newspaper or upgrade to concierge level.”

Lexington Rewards members can use their points for an “Award Night” at one of the participating properties or they can use them with Lexington’s redemption partners.

Stash members can use their points to stay at participating hotels across the U.S. Each hotel has its own redemption benchmark, and each hotel has the ability to change the amount of points it costs to stay at a given time.

For example, Hotel Abri in San Francisco has a benchmark of 22,115 points, whereas Lodge on the Desert in Tucson, Arizona, has a benchmark of 6,456 points, according the Stash’s website.

Driving meetings
Another reason independent hoteliers feel the pressure to offer loyalty programs is because it helps secure more meetings, said Elyse Cottle, director of promotions at the Caribe Hotels in Orlando, which see a lot of convention business.

“At independent properties, it’s really hard to get conventions, especially in Orlando, and a lot of the times they get left out of the mix,” she said. “(Stash) allows us to stay in the mix …

“We have some planners who plan other meetings at Stash hotels, so there have been times where we’ve been able to leverage that relationship,” she said.

Crawford said since implementing Lexington Rewards, her properties have secured more meetings as well.

As iPrefer ramps up its sales and marketing efforts, Ueberroth said there will be an incentives program for travel agents and meetings planners.

“This year has been the best year for group and conference sales ever,” she said, adding that the collection has realized the most bookings in 10 years.

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