Hilton Hhonors Worldwide Rewards

Hilton HHonors Worldwide: Loyalty Wars: (Due Week 9, Oct. 29-Nov. 2) ? Compare the Hilton HHonors reward programme with other reward programmes you know about or have researched. Be sure to discuss the differences, how they value guests and their offerings. ? Does the value of the Hilton program justify its’ cost. Explain in terms of the value of a customer. ? What is Starwood trying to do and how should Jeff Diskin respond? The Hilton HHonors Worldwide reward programme can be compared with several other loyalty or recognition programs offered by leading hotel chains of the world.Similar programs are being offered by many airlines, department stores, car rentals, video and book retailing, credit cards, movie theaters and several other international entities in the service industry. The first one that can be considered in this regard is the Priority Club Rewards offered by IHG (Intercontinental Hotels Group). The IHG group comprises of Intercontinental Hotel and Resorts, Crowne Plaza Hotel and Resorts, Holiday Inn, Holiday Inn Express, Hotel Indigo Staybridge Suites and Candlewood Suites. (Ref: https://secure. priorityclub. com/hotels/). The program is offered across 4,500 properties operated worldwide by the group.The program is open to everyone free of cost. It allows the members to earn points not only by staying in any of the member hotels but also by earning Priority Club points when purchasing goods and services with any of their partners or earn miles with their partner airlines. The partners are specially customized in accordance with prevalent tastes and popularity in different parts of the world and include leading brand names in airline industry, fashion retailers, vacation and tour operators, mobile and telecom services, car rentals, home and furnishings, electronics, computers, etc.The choice of partners is vast as compared to Hiltons’ rewards program. In many territories local co-branded credit cards are also offered which entitle mem bers to earn points on each and every spent. For the stay at the hotels, members can earn 2000 points for every stay outside the hotels outside North America, Mexico and Carribean in Intercontinental Hotel and Resorts while for all other geographical locations and all other hotel chains included in the group, the members earn 10 Priority Club points for each US $ 1 spent.The program has distinct features comprising of points that never expire and no blackout dates for Rewards Night, thus allowing the members to stay anytime. Unlike the Hiltons reward program, members can also use a combination of points and cash for their stay. Furthermore, members can redeem their points for flights with no blackout dates on over 400 airlines across the world ranging from North America, Europe, Middle-East, Central to Southern and Far-east Asia. However, unlike the Hiltons reward program, double-dipping is not allowed.But as an added incentive to members, free lounge access at several airports is a lso offered to the members thus enhancing members travel convenience. Similar to the Hilton reward program, the points in IHG Priority program can also be redeemed for several other items besides free nights at the participating hotels. Yet again, the choice offered by IHG is vast as compared to Hilton. The points can be redeemed for hotel stay, airlines travel, tour packages, adventure sports and merchandise from leading retails and entertainment providers.In addition, gift cards from several brands are available. A very appealing feature is an option of donating points for charitable ventures in keeping with IHG philosophy that ‘rewarding others may be the best reward of all’. (Ref: http://www. priorityclub. com/rewards/us/en/redeem/catalog/charitable-donations). The IHG program lays special emphasis upon member satisfaction and recognition. Hence , the members have several value-added services offered for free. A separate toll-free reservations line is offered. They are offered priority check in and check out services.Their individual preferences are stored in the system (Personalized room-preferences profile) offered at every stay without asking e. g. smoking or non-smoking rooms, bed-type, etc. Requests for late check-outs are given preference and in certain locations, extra benefits like airport pick-up services, free internet, free newspapers, etc. are offered. Extra level of service is also offered to members for room upgrades, complaint resolution, customer service feed-back services, etc. Just like the Hiltons’ reward program, the IHG Priority program also has different plan levels based upon ‘qualifying points’ and ‘qualified nights’.Accordingly, 3 tiers termed as ‘Club’, ‘Gold Elite’ and ‘Platinum Elite’ are offered. (Ref: http://www. priorityclub. com/hotels/us/en/global/support/about_priorityclublevelsef:) Bonus earnings for Gold Elite are 10% and those for Plati num Elite 50% over the base points earned. Moreover, the Elite members are offered extra benefits and advantages like complimentary upgrades and guaranteed room availability. In this respect, it appears to be more attractive to customers than Hiltons’ reward Silver and Gold VIP status.Over and above the stated benefits, multiple promotions are offered at different times promising extra points, free room upgrades, etc. to attract more and more customers. Another popular loyalty program is Fairmont President's Club that allows access to a host of exclusive benefits and privileges. Besides the standards being offered by the loyalty programs of almost all big hotel groups, Fairmont goes a step ahead by offering members services like concierge reservation, complimentary use of health clubs, golf-clubs and even use of BMWs at select locations. Ref: https://www. fairmont. com/fpc/benefits/). Another impressive and acclaimed loyalty program, not by a hotel group but an airline, is th e one offered by Etihad Airways. Though relatively new in the competitive airline industry, the Etihad Guest program has introduced several new initiatives for the frequent travelers generating big business for the airline and proving to be a significant factor in the phenomenal success of Etihad. Very aptly, it has been awarded 2012 Freddie Awards.Etihad Guest was recognized for the Best Redemption Ability, Best Elite Program and Best Loyalty Credit Card among all airlines in the Middle East, Asia and Oceania. (Ref:http://www. etihadairways. com/sites/Etihad/global/en/aboutetihad/mediacenter/newslisting/newsdetails). The program was also runner up in the four remaining categories: Best Promotion for Earning, Best Promotion for Redemption, Best Customer Service and Program of the Year.Hence, it can be concluded that the member retention and brand loyalty competition is fierce and offering innovative and extensive services to customers is imperative to lure more and more individual a nd corporate clients. It seems quite obvious that the value of Hilton reward program does justify its cost. As per the belief of Hilton Hotels that regard frequent guest programs as the lodging industry’s most important marketing tool, serving to direct promotional and customer service efforts at the heavy user. (Ref: Case Study by John Deighton and Stowe Shoemaker).Loyalty programs have been at the core of how hotels attract and retain their best customers for over a decade. However, they can only be as cost-effective as multiple competitors in the market let them be. This study reveals that the previous year had been successful for Hilton. Revenues had been in the region of $158 per night per guest, and occupancy had exceeded break-even. Also Hilton HHonors rewards program was not established as a profit center but was required to break even each year and to measure its effectiveness through a complex set of program metrics.The program is run by a small team of 30 employees . A research by Hilton revealed that guests identified by their HHonors or airline membership numbers occupied 22. 5 percent of all the rooms occupied in the Hilton Hotels and Hilton International network in a year. More importantly for Hilton , activation, retention, and member spend per visit all have improved. Augmenting the financial gains is the valuable database the HHonors rewards program provides to Hilton. These are the most critical and demanding customers who provide vital feedback and valuable suggestions.The program staff can establish individual contact with these members through mail or in person and not only obtain valuable feedback but earn lifelong loyalty. Plenty of focus groups and quantative research can be carried out further enhancing means to develop brand loyalty through personal profiling and personal recognition techniques. The phrase attributed to Diskin interestingly sums it up i-e ‘ People care about organizations that care about them. (Ref: same case study).In addition, the program also offers opportunities to target other customer segments. Furthermore, the program is also being used as a tool that can help the travel manager with compliance to their overall travel policy by offering special incentives to stay at Hilton rather than at a competitor due to personal choice of the travelers. The Hilton program proves to be even more effective by developing additional services for returning customers at check-ins and by appointing guest relations managers to offer special personalized services to loyalty members.All these factors contribute to make this program valuable in expanding and retaining clients and thus justify the associated costs. Starwood is introducing a new aggressive frequent-guest program that it hopes will help attract more business travelers to its Westin Hotels Resorts, Sheraton Hotels Resorts, The Luxury Collection, Four Points, Caesar’s, and Starwood’s new W brand hotels, representing more th an 550 participating properties worldwide. The program is expected to raise the stakes in the loyalty-program fierce competition amongst big hotel chains especially since Starwood plans to run it by a