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New loyalty programs seek to outdo one another

The race for loyalty began a few years ago, but today the vows are being renewed. The voluntary hotel chain Logis was one of the first to renew its loyalty program in 2013 with the creation of O’Logis. Since then others have been doing the same, starting with Louvre Hotels which launched a new paid loyalty card in the same year (2013).

But this year Ceasars Entertainment has won the race. The American hotel and casino group has just been rewarded for its loyalty program Ceasars Rewards. It thus won the prize for best customer service at the Freddie Awards 2019 on April 25th, in Dallas, Texas. The competition challenged airlines,hoteliers and credit card companies. A widespread vote (7 million votes cast this year) led to the selection of the most appreciated loyalty program.

Not all changes are so evident. Sometimes improvement is subtle, as is the case at American Express which just announced it will expand loyalty advantages. Now if you are a member of American Express's program, you may use accumulated points points to ask for an upgrade when you fly. With one drawback: the airline reserves the right to accept or refuse within 5 days. In a way, loyalty becomes a form of parallel currency that may be used for payment. In some cases, it may even be complemented with local currency, in particular if the price of an upgrade surpasses the number of loyalty points accumulated. It allows a person to choose their own reward as these points may be spent in several different ways. Loyalty programs are thus increasingly personalized, made to measure.

According to the British weekly The Economist, the hotel industry is also increasingly adopting the loyalty development models used by airlines by using this system of accumulated points that are earned with travel in the same way as miles. This method will be particularly for capturing clientele and keeping them within a closed circuit since the points need to be used within ta single brand. This system has the advantage of allowing the user to chose how they wish to use their loyalty rewards, unlike older loyalty programs with clearly defined advantages such as reduced prices for a hotel night or dinner. From now on, most major hotel groups will offer a broader choice of redemption options.

"Augmented Hospitality"

AccorHotels has given this trend a name: "Augmented Hospitality". Announced within its new program ALL- Accor Live Limitless, the goal of this concept is to "accompany our clients in their everyday lives, beyond the hotel stay" with a new brand architecture: "Live, Work, Play". The idea is to make the loyalty development program evolve towards an offer of adapted and personalized services. For example, points earned may be spent at restaurants or in co-working which are products that are also offered within the group.

Behind this carefully executed marketing message lies a strategy to merge two programmes, Le Club AccorHotels and accorhotels.com. This makes things easier for both the guest and the hotelier who will both benefit from this development. The client will have access to a broader panel of brands (Mövenpick, Orient Express, The House of Originals…) and the group will be able to combine loyalty account members. It will make it possible to improve knowledge of regular clients and grow their loyalty by offering them more tailor-made advantages. These rewards will be immaterial, so individuals may choose experiences at will: culinary, entertainment or athletic. Athletic, such as sponsoring PSG so they can raise loyalty program awareness through the players' jerseys. This operating mode also relieves hoteliers who sometimes had to offer Champagne or chocolates or even imperatively upgrade a client at the risk of creating problems with room availability.

Technology at the service of customer experience 

In any case, everyone agrees about one thing: the experience is a priority as a new luxury. And yet, in order to provide clients with an experience, they have to be understood first and foremost. The Ascott group has thus inaugurated a new loyalty program, Ascott Star Rewards. The purpose of this program is to improve awareness of clients through a new revenue management and a renewed PMS. The role of data is thus central to this work. Kevin Goh, Chief Executive Officer justifies it in these terms: “To augment the growth of Ascott’s lodging brands, which now stands at 13, we have to be smarter about the sales and distribution of these various brands to ensure we deliver the right products for our guests. To sharpen Ascott’s competitive edge to stay ahead of the curve, we must continue to harness technology to reinforce our strong international network of customers, boost employee productivity, gain cost advantages from economies of scale and strengthen our operations.”

In the same way, the group Marriott International launches Marriott Bonvoy. This evolution allows them to simultaneously merge the old loyalty programs: Marriott Rewards, The Ritz-Carlton Rewards and Starwood Preferred Guest (SPG) since February 13. Members of each of these programs will thus enjoy a broader array of choices. But is is also a new system of compensation that uses an all new experiential platform, Marriott Bonvoy Moments. The platform was modeled after a lifestyle magazine with suggestions for getaways and experiences worldwide, in connection with properties owned by the Marriott group of course.

The advantages of this new program don't stop there. They reach as far as temporary property rentals that was inaugurated with the brand Homes & Villas by Marriott International. Around 2,000 high-end houses and villas at a hundred destinations were selected and are available for short term rentals. Their management is entrusted to real estate agencies that provide assistance 24/7, as well as high quality WiFi and maintenance of the lodgings and linens. It is thus high-end service that is in direct competition with sharing platforms such as Airbnb. This competition goes beyond the simple level of service, as it also includes customer loyalty for reservations made  through Homes & Villas with the program Marriott Bonvoy. It is thus a strategy to retain a versatile clientele over time, thanks to tailored benefits. 

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