Hotels Turn To Loyalty Programs To Drive Revenue
The Associated Press
04/03/09 - 02:03 PM EDT
KRISTEN A. LEE
NEW YORK (AP) As global travel continues to slump, with business travelers and vacationers sticking close to home, hotel chains are ardently courting their most loyal customers.
Free rooms and other perks for their most frequent guests have become a key investment for hotel companies with empty rooms to fill, said Tom Botts, a specialist in the hotel and travel industry at consulting firm Hudson Crossing. Companies count on guests staying for free to drive some revenue by eating in the hotel restaurants, visiting the spa and opening their wallets to pay for additional nights.
"Hotels are looking at this as a way to get people in the door," Botts said.
Most recently, Global Hyatt Corp. and Marriott International Inc. have offered free nights at their properties through loyalty programs, which reward members with points they can redeem for hotel stays and merchandise.
On Thursday, Hyatt announced it was giving away nearly 32,000 free nights at its hotels to current members or new enrollees in its guest loyalty program who submit winning essays detailing how they plan to use the free stay. The promotion includes three prizes of 365 free nights at Hyatt properties.
At the same time, the privately held company is offering new perks to its current and new members, such as free Internet access, some suite upgrades and exclusive check-in areas for its elite members. Customer loyalty offers the company a short-term bonus as well as long-term benefits, said Hyatt President and Chief Executive Mark Hoplamazian.
"We believe there is no question that it will stimulate current activity and current revenue," Hoplamazian said.
Marriott announced last week that members can get a three-night stay by redeeming points for just two nights at 57 of its resorts around the world. Members can also book a six-night stay by using points for only four nights.
Other new deals include one from InterContinental Hotels Group PLC for its loyalty program members. Members staying twice at some of its hotels through April 30 can get another night free any time through June 16.
Don Berg, vice president of the company's loyalty programs, said the company noted that the travel patterns of loyalty club members recovered faster from the economic slump that followed the terrorist attacks of Sept. 11.
"The people who belong to these programs are largely frequent business travelers who travel for a living," he said.
InterContinental has tried since the financial crisis deepened last fall to court those more resilient "heavy road warriors" by expanding its rewards, which even include the option to stay at a rival hotel.
"We want to fish where the fish are biting," he said. "We think we can get more business or steal more share with those customers."
Reward redemptions rose 25 percent in January compared with January 2008, the company said.
Even these promotions are still not entirely flexible there tends to be less availability during holiday periods and at the most popular destinations, Botts noted. For those willing to travel off peak, however, hotels are giving travelers a major incentive to sign up.
"It's a great time to earn points and it's also a great time to burn points."
