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| Great News - Online Newsletter - Spring 2006 |
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Rewarding loyalty
As Great Hotels Organisation prepares for the launch of its strategic rewards programme, Ursula Gray, Marketing Director, gives member hotels a preview of its multi-faceted benefits.
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At Great Hotels Organisation, we're always looking for ways to level the playing field when it comes to the competitive world of hospitality. For many years now, major upscale hotel chains have benefited from offering loyalty schemes that reward guests for their repeat business. In some cases, the big chains are securing up to 40% of their bookings through these programmes. Independent hotels, on the other hand, can have difficulties competing on the loyalty field because they don't have the buying power to match the benefits provided by the big chains. That's why GHO is in the process of creating an innovative rewards programme especially for our members, which has been designed to appeal to travellers who want to stay in independent hotels while being offered the value provided by the major brands.
What they have in common
A recent report by Mintel suggests that the guest loyalty schemes of the major brands are stuck in a rut. Despite this, they remain popular in the travel industry and many have the following features in common:
- Most are points- or nights-based with redemption options that include free hotel stays and airline miles.
- Practically all chains offer soft benefits including priority reservations, express check-in and late check-out, free newspapers and room upgrades.
- Communication channels between guests and chains consist of toll-free numbers for programme enquiries, statement mailings, emails and websites.
- Partnerships include airlines, car rental firms, phone companies, credit card issuers, retailers and banks.
Major marketing benefits
We have been working hard with our partner Hospitality Marketing Concepts (HMC) to develop a rewards programme that avoids the pitfalls of the big loyalty schemes but still retains the major marketing benefits. We are pleased to report that our programme meets many of the recommendations set out by Mintel's report in terms of how to get it right:
- To be really effective, hotel loyalty schemes must offer genuine value to members, especially air miles.
- To increase their membership, loyalty schemes must appear to provide a variety of tangible benefits as early as possible after entering the programme.
- Points or miles awarded should have a long period to expiration or not expire at all.
. Loyalty programmes should be flexible, offering multiple-exchange possibilities, including the ability to pay with a combination of cash and points.
What we've got right
While the details are still in the process of being finalised, we envisage that the Great Hotels Rewards Programme will be based on a discount of 20-35% on rack, or best available, room rates plus other strategic benefits. Members who join up will be asked to promote the programme and accept selected rewards redemptions but, in return, they will have access to a pre-qualified database of affluent travellers. Indeed, the programme that we are participating in is expected to consist of 1,000 hotels by 2009. This translates into a consumer database of 1.5 million consumers who can be sent marketing communications through the personalised Great Hotels programme.
Of course, savvy travellers also expect dining privileges and these will be offered through the Great Hotels Advantage Club in addition to discounted room benefits. We recommend this tier to member hotels that face strong competition from other dining facilities in the local area. Research from HMC has shown that while travellers who book dining through their rewards programme expect a big discount - up to 50% for two people - they tend to spend significantly more on their food and beverage choices than other diners. So, in many cases, the cost per cover increases by welcoming Advantage Club members.
Finally, the multi-tiered structure of our programme will allow member hotels to offer real benefits to their customers, including air miles and VIP services, all of which can be easily exchanged. We do hope we've whetted your appetite with this sneak preview of our new rewards programme.
Great Hotels welcomes any suggestions or feedback on how we can further personalise our rewards programme for you.
Contact Ursula Gray on ugray@ghorg.com or
+44 (0) 20 7380 8566 with any of your pre-launch comments.
Excerpts from Mintel's Hotel Loyalty Schemes report. Visit www.mintel.com
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