CASE STUDY: Hotel loyalty programmes
Analysis of hotel loyalty programmes and five at-a-glance case studies
Few people would disagree that the last two or three years have been incredibly challenging for the hotel industry. However, it’s during such times that creativity and innovation come to the forefront to answer the question ‘how can we fill our hotel?’
For many hotel chains, the loyalty programme is an integral part of the answer and the Middle East has witnessed a variety of initiatives for generating repeat business in 2011. These range from some chains introducing an existing programme to the region to extending a programme to go beyond the rooms segment to capture and reward non-residential spend. While such initiatives are applaudable, at the end of the day, it’s all about results, which are measured in a variety of ways depending on the objective.
Christophe Landais, managing director for Accor Middle East explains the strategy and measurement criteria for Accor’s A|Club: “The main strategy is focused on three objectives: to raise awareness of the programme within the region, recruit additional members and strengthen the loyalty of our clients by developing repeated business. We measure our success with the progression of the number of members we have, which will reach 8 million worldwide by the end of 2011 and also by the number of active members, representing 41% as of November 2011.
“As a leader in the hospitality industry in Europe, Accor’s ambition is not only to attract more members from this region, which represents 54% of our members, but also to open new frontiers for our reward programme to support our hotel development in Asia-Pacific, Middle East and South America.”
Part of the strategy of Sirius, Jumeirah Group’s Recognition and Rewards Programme, was to increase the number of local enrolments to support the ‘lifestyle’ elements such as food and beverage, spa, and the Wild Wadi Water Park. Measuring success through the number of new members with a target of 15,000 to 20,000, the 2011 campaign increased enrolment through the Sirius website by 78% month-on-month comparison, after initiating the campaign.
With such results, it’s no wonder that hotel brands are commending the loyalty programme as an integral part of their business development strategy, but it’s important to ensure that key factors are taken into consideration when measuring success.
“Our loyalty programme, the Fairmont President’s Club (FPC), is more than a set of benefits and offerings; it is the way we do business and how we treat our most important customers. It is an extension of the brand’s message and voice and how we earn the loyalty of our guests — indeed it is an integral part of our marketing and guest satisfaction efforts,” reports Kent Cooper, vice president of regional hotel sales for Fairmont Middle East and Africa.
Farrah Ismail, director of sales and marketing at Millennium Airport Hotel Dubai, agrees, adding: “A good loyalty programme should offer value to both the guest and the hotel. Redeeming points should be easy and they should be redeemable at all the group’s hotels to build brand loyalty and recognition. If a loyalty programme is done well, it will make a noticeable difference to the guest experience.”
Back in 2010, Loylogic, a provider of loyalty technology solutions, predicted for 2011 that: “a one-size-fits-all loyalty programme will not suffice. With almost two billion loyalty programme memberships in the US and more worldwide…. consumers have more options and more control than ever and it’s vital for businesses to provide consumers with rewards they want to earn to maintain customer engagement and encourage repeat business. The next generation of reward programmes must offer unique, desirable and, importantly, attainable reward options.”
In other words, the personal approach and understanding the customer needs is what matters. Kent Cooper has seen this in regard to the Fairmont President’s Club, stating: “We see that consumers are thinking about luxury in a more personal way, how it relates and reflects upon them, and how the purchases can be experiences, investments, or even small rewards. What we wanted to do with FPC was more fully engage with our two top-tier member groups by increasing the relevancy of the benefits available and surprising them with unexpected benefits, while speaking to our entire membership base through tailored communication and offerings around key passions that they themselves choose.
“Interestingly, the passions our members gravitated towards did not vary greatly from region to region. The main passions of our members in Canada were the same as they were in China and the UAE,” observes Cooper.
A key trend for Sirius last year was a change in customer behaviour.
“We have noticed that members respond to exclusive campaigns where we offer bonus points rather than availing a reduced redemption offer. This has changed since 2009 where members would grab reduced redemption offers to burn their accumulated points,” explains Ayman Al Deik, group director of brand loyalty and acquisition at Jumeirah.
Looking into the future, Ayman continues: “Prior to 2009, high-end luxury hotel chains didn’t necessarily have a published loyalty programme and tended to recognise their loyal customers through a CRM initiative or an invitation-only programme. Currently, we have seen several high-end brands launch their own loyalty programmes, while others are also pushing to acquire new members. The market clearly indicates that customers are keen to know what they are entitled to by being loyal to a brand.”
Technology also reigns as a future prediction across the board: “With the evolution of technology, we predict more and more digital solutions,” adds Landais at Accor.
In You Gov’s Oracle study of Travel in the Middle East, North Africa and Subcontinent 2011, just 7% of respondents are loyalty members of a hotel. While this is a low figure, it would indicate that there’s plenty of scope in the region for loyalty programmes to develop.
CASE STUDY 1:
Hotel Group: Accor
Loyalty Programme: A|Club
Challenge: Encouraging recruitment of new members.
Initiative: Recruitment drive with in-house guests.
Objective: To increase the number of new members to the programme on a monthly basis.
Target Audience: In-house guests.
Channels: Point of sale material and communication through the staff.
Results: In the Middle East, efforts reflect a 5% increase every month in recruitment, which is in line with the Accor global standards.
CASE STUDY 2:
Hotel Group: Fairmont Hotels and Resorts
Loyalty Programme: Fairmont President’s Club (FPC)
Challenge: More of an opportunity than a challenge, Fairmont Bab Al Bahr was the official host hotel for the Abu Dhabi Film Festival and had a large outdoor screen set up on the beachfront with daily film viewings.
Initiative: An FPC booth was set up at the hotel property during the 2011 Abu Dhabi Film Festival to create awareness of the programme.
Objective: To continue to enroll both residents and potential guests to the loyalty programme.
Target Audience: Event attendees and in-house guests.
Channels: Live event.
Results: During the week, more than 1000 new members joined the loyalty programme.
CASE STUDY 3:
Hotel Group: Millennium & Copthorne
Loyalty Programme: Millennium & Copthorne Loyalty Club
Challenge: Introducing the global loyalty programme to the MENA region.
Initiative: Training MENA employees on the programme to converse with guests when checking them in to encourage member enrollment.
Objective: To enroll staying guests to the programme.
Target Audience: In-house guests.
Channels: Guest interaction.
Results: Since launching in May, 1906 members — accounting for 22% of all eligible guests — signed up at Millennium Airport Hotel Dubai.
CASE STUDY 4:
Hotel Group: Jumeirah Group
Loyalty Programme: Sirius
Challenge: Members’ Sirius points expire before members are able to redeem. Redemption is a core indicator of a member’s engagement with Jumeirah’s custom loyalty programme.
Initiative: Monthly targeted communication with relevant redemption offers to members who have their points expiring in the next three months.
Objective: To minimise the number of points expiring and boost the redemption rate to ensure that members are rewarded for their loyalty with Jumeirah.
Target Audience: All members with enough points to redeem and with points expiring in the next three months.
Channels: Monthly direct html communication to members.
Results: Redemptions have increased by almost 50% in six months.
CASE STUDY 5:
Hotel Group: Shangri-La
Loyalty Programme: Golden Circle
Challenge: Address the needs of both staying and non-staying guests.
Initiative: Restructured and enhanced the existing Golden Circle recognition and award programme to allow staying and non-staying guests to earn and redeem Golden Circle Awards Points or Golden Circle Awards.
Objective: Provide more privileges.
Target Audience: Existing Golden Circle Members and general public.
Channels: Online, PR, social media.
Results: Since restructuring in October 2010, the number of Golden Circle members has increased 60%, bringing memberships to 2 million.
To read about three hotels that don't have loyalty programmes - and why, click here