Win, lose or draw the late boxing promoter Mickey Duff was ambivalent about his prize fighters quitting for potentially better rewards elsewhere. “If you want loyalty,” he said, “get a dog.”
Hotel chains or their customers currently sparring over the streamlining of reward schemes might share similar sentiments. They certainly apply to corporate travel buyers or managers viewing a value-added segment or ‘perk’ that is personal to individual employees and runs largely in isolation or under the radar of managed travel.
Their general detachment is heightened by being a commercial step removed from the direct supplier-traveller relationship. The recent and ongoing tailoring among major hotel reward schemes primarily involves improving personal customer data mining and broadening online distribution channels. It revolves around optimising booking and servicing costs, while identifying and feeding the demands of a new traveller age
The net result in a subjective, often convoluted and zealously guarded personal sphere, is that some corporate travellers will benefit from the changes and others will have their noses put out of joint.
Scoring points
In the red corner, stripped-down hotel schemes are aiming to knock out easier-to-redeem rewards in favour of lavishing more personalised high-end trophies on targeted big spending guests.
In the blue corner, average-stay road warriors face pumping up their membership status or punching above their spending weight to win anything worthwhile on points. In short, ‘one size fits all’ strategies are being ditched and ‘lightweight’ loyalty offers being put out to grass. Points still mean prizes but generally are being made harder to earn and redeem against rewards, such as upgrades.
Although ostensibly trading both up
and down, the changes overall represent a devaluation of schemes that anyway play only a minor, indirect role in managed corporate travel.
Compared to airline loyalty schemes, for example, the tangible bottom-line benefits of hotel schemes to integrated travel management are commonly viewed by buyers as minimal or too disparate. But in an era where return on investment (ROI) impinges on every transaction, what, if any, challenges do they pose to corporate purchasers?
None, says Cherry Salvesen, buyer for Cullum Detuners, who runs a small but highly frequent traveller army of 200. Loyalty schemes are irrelevant to the company’s hotel booking processes, she says. “Our policy remains cost-based dependent on project or client, and each booking is completed with location, budget and quality service as the main criteria.
“Besides, the benefits that most loyalty schemes offer, such as free wifi, should be the norm for any stay. I would rather see all hotels offering a better service than having to entice travellers with rewards just to stay at a property.”
Data capture
On a larger scale, marketing via a slew of social media, online travel agencies (OTAs) or new third-party apps ultimately might suggest easier electronic capture and management of loyalty scheme data for buyers. But brand fragmentation and lack of information are challenges, according to one buyer for a global manufacturer. “No hotel programme seems to be able to pull or provide data to us as corporates,” he says. “For example, I can’t tell how many of our employees are in a programme, or what the cash benefit to us has been. We don’t know what we are winning or losing, we don’t know what’s going on – hotels are not telling us what they are doing with their programmes concerning our employees directly.”
He says more data on corporate membership, spend and rewards gained would benefit all parties. Another travel buyer for a telecoms firm adds: “Overall, we take the view that loyalty schemes can be supportive of travel policy if they are properly managed. In some cases they can help with compliance. We allow travellers to include their [hotel membership] account details in their profiles, so they can still make their bookings through the travel management company (TMC) or online booking tool (OBT) channels and obtain loyalty points.”
Limiting points-earning potential in favour of attracting more elite-tier membership is a difficult call, he says. “If hotels set the bar too high, employees just see it as unachievable. On the other hand, it could influence them to choose a hotel based solely on points accumulation. Our approach is to limit the choice of hotel available through the OBT with a strong gateway at the expense reimbursement stage to check bookings made within policy.” He says that to aid compliance, schemes should consider giving bonus points for booking at corporate rates through a TMC.
None of the buyers I speak to advocates a system of a company sharing hotel loyalty points with the employees. “It’s just too difficult to share rewards points, as travellers often acquire points from personal trips as well as business trips,” says one. “Differentiating between these is always going to be a challenge.” All agree, instead, that crossover rewards with airlines or match-for-match facilitation between hotel chains make stronger sense in contributing to the bottom line.
Together with no-quibble items such as guaranteed best available room rate and late check-out, these translate into more practical articles of faith. If not as dependable as the aforementioned dog.
We have delved into our archive to bring you two more features on hotel loyalty schemes:
Corporate loyalty schemes: Pledging alligience
Corporate loyalty schemes: Divided loyalties