Rewarding Loyalty

Rewarding Loyalty

Hotels’ Use of Reward Points At An All-Time High

By Marlane Bundock
Book a meeting at our hotel and earn points toward a free vacation.” That’s an example of what you might read on any number of hotel websites or hear from any number of property sales representatives these days as the industry increasingly vies for your business.

In the race to win meeting planners’ loyalty and their repeat business, many hotel companies like Hyatt Corporation, InterContinental Hotels Group (IHG), Marriott International, and Starwoods Hotels and Resorts Worldwide are promoting programs where meeting professionals can earn points for booking business into their qualifying brands.

For example, points are part of Starwood’s Preferred Planner program where planners who book meetings at the company’s Sheraton and Westin brands can earn Starpoints. The program gives planners one Starpoint for every $3 of eligible group revenue. Planners can collect and redeem the Starpoints for various perks, such as free hotel rooms, credit toward their next meeting and even membership dues for Meeting Professionals International.

“There has certainly been far more attention on meeting planner loyalty programs by every hotel,” said Randy Petersen, editor and publisher of InsideFlyer magazine, who was dubbed “the most influential frequent flyer in America” by the Wall Street Journal and has studied hotel loyalty and reward programs.

Petersen said meeting planners have become one of the hospitality industry’s most important client groups when it comes to loyalty programs. “Meeting planners are these programs’ best and most valuable clients…since a great meeting planner can account for 100 rooms for each and every event, and that’s a lot of business.”

He explained that, today, most all hotel chains—from value- and limited-service properties to ultra-luxury brands—are now offering some degree of loyalty rewards and point earnings programs for planners as frequent travelers and as booking agents for group business. “The use of points to reward—or entice—the planner is at an all-time high with Marriott offering some of the biggest bonuses ever. And even Hyatt, now that their base of hotels has grown so much bigger, has a revamped offer for groups,” Petersen said.

Keeping a pulse on the various loyalty programs offered by hotels and airlines, Petersen’s magazine has polled frequent travelers for the past 19 years to find out which companies offer the best reward programs. Each year, winning companies earn “Freddie Awards.”

In 2007, Marriott Rewards, Marriott’s loyalty program, took the top honor in several Freddie Award categories. “Winning eight Freddie Awards is gratifying because it provides valuable feedback from our most frequent guests,” said Ed French, senior vice president of Marriott Rewards. “We will continue to use their input to help shape future program enhancements.”

Such enhancements include time-based bonus promotions such as the current one being offered for Marriott’s Rewarding Events program, where qualified planners can earn 25,000 additional points when they book and hold an event at a Marriott property by Feb. 29, 2008. One caveat is that planners must use an American Express credit card to pay for the event.

Marriott’s group-based rewards program allows planners the opportunity to earn three points for every U.S. dollar spent up to $50,000 per event or one frequent flyer mile for every dollar spent up to 15,000 miles per event. Planners can redeem their points for more than 250 reward options such as hotel stays at one of the company’s nine brands, cruises or credit toward the event master bill.

Petersen also explained that planners who seek to earn points from hotels are currently benefiting from the recent consolidation of some hotel companies where they now have access to more brands under one rewards program—ultimately giving planners additional point-earning opportunities and hotel stay redemption options.

“The acquisition of Le Meridien by Starwood and the acquisition of Summerfield Suites by Hyatt—with renaming and new branding—has continued to make the earning and burning of points in these programs even easier,” Petersen said, suggesting that a reward program campaign might say, “Earn from any of our five different brands.” 

Ready To Declare Your Loyalty For Points?

“Just like frequent flyers, meeting planners can also be influenced by loyalty programs—though Corporate America would not ever want to hear that,” Petersen said. But, while these reward programs are tempting, not all planners are ready to go so far as to book an event based on reward programs. “I work with about 17 clients and find the reward programs are seldom—to never—the determining factor in selecting a property,” said Richard Miseyko, CMP, CMM, president of Florida-based Site Search Inc. “Either the property meets the group’s need or it doesn’t, and points toward a free stay won’t sway them. That being said, rewards are icing on the cake if everything else works.”

Rewards that are date-restricted may be less appreciated since they are hard to take advantage of, said Kathy Bachelot, governor of the Texas District of Pilot International. “The conventions that we schedule have very specific dates and we are not able to be very flexible.”

Miseyko agreed that date-based rewards, whether it’s a special rate or point earnings, are hard to plan around unless the meeting’s planning lead time is six months or less. He said hoteliers would have a better opportunity filling in slow months with group business if they advertised the specials in advance. “A real solution for weak sales months would be for hotels to look at their sales history and adjust their selling parameters nine to 12 months prior so sales staff can create the proper base of group business for that month. This industry is fairly predictable. A bad May this year was probably a bad May last year.”

Bachelot said that she works to negotiate rewards outside of special programs or promotions. “The rewards that our group receives are basically customized—we negotiate these rewards at the time of the initial contract. They’re mostly based on our meeting’s past performance and on our specific needs.”

While points are a perk for planners, don’t think they can’t be negotiated, Miseyko said. “If a group is accumulating points, it pays to negotiate the reward amount along with everything else. The desire of the property to book the business can often double or triple the reward amount.”

Deciding who redeems the points earned through group business is another matter that most organizations should discuss, Miseyko said. “What I don’t see discussed is the gray area of who gets the points. Being a third-party site selection company, I have been offered reward points confidentially without my clients’ knowledge in an effort to [get me to] sway a client toward a particular property. While I understand the motive, from an ethical standpoint I can’t and won’t accept these, nor will I bias my recommendation. Any organization using third-party representation should determine whether this is happening. To take this a step further, assuming the client takes the points, does it go the person signing the contract, which is sometimes an administrative assistant, or does it go to organization’s president or executive director? Some of my clients battle ethically with the question of, ‘Should I take these personally, or give them to the company?’”