Hotel Frequent-Stay Programs Reach Budget-Level Properties

The increasing sophistication of database marketing is helping hotel chains better gauge guest preferences and implement frequent-stay programs, once limited to luxury properties, across a wider range of lodging choices.

As guests demand more, such programs are becoming standard at budget-level hotels and more flexible at every customer level. An efficient loyalty program is considered crucial to remaining competitive.

“It's a highly competitive advantage if done right and the customer feels they are getting a good return from their loyalty,” said Marriott International spokesman Gordon Lamborn.

Cindy Green, senior vice president of hotel data mining provider Pegasus IQ, Dallas, said individual hotels and chains that never would have done so are setting up reward or recognition programs because it's the only way to distinguish themselves from rivals.

Marriott, Washington, DC, which instituted the industry's longest running loyalty program — Marriott Honored Guest Rewards — in 1983 expanded the program to all its properties when it introduced Marriott Rewards last year. The 10 million members of the multi-branded program can earn points at more than 1,400 hotels worldwide, including Renaissance, Courtyard, Fairfield Inn and Residence Inn.

Choice Hotel International, Silver Spring, MD, launched its Guest Privileges program earlier this month, which covers 2,200 Comfort, Quality, Clarion and Sleep Inn hotels in the U.S. Choice is seeking to attract the budget-conscious business traveler, the road warrior, who also could pick Ramada, Best Western or Holiday Inn.

“The last two to three years has seen a big surge from middle-of-the-road properties, everybody is in the midst of setting up a program or just did,” Green said. “Even people who pay $55 to $65 per night have much greater expectations than they did five to ten years ago.”

The chance to earn a free stay faster is driving Guest Privileges and the latest Marriott loyalty promotion with Visa. Choice is marketing its program as the fastest way to a free stay with just a 10-night requirement while Marriott is awarding bonus points that can result in a free night at selected hotels after just three separate stays paid for with Visa.

The use of partners and flexibility of rewards increases the attraction of loyalty programs. Marriott has agreements with nine airlines where points can be transferred into frequent-flier miles and a separate Marriott Miles program that lets guests earn points exclusively toward free flights. Choice will give members an option of redeeming points for gift certificates from 600 regional and national retailers and restaurants.

Hotels know what their guests want thanks to feedback gleaned from check-out surveys, customer service calls and direct mail questionnaires. The only way to organize that data for marketing purposes is by using a database. Marriott draws on the combined databases of its various properties and marketing partners to send direct mail for retention and prospecting.

“Direct marketing is a two-way street that helps us listen and learn from customers,'' Lamborn said. “We depend on them to let us know what we do right and wrong.''

Marriott learned how to do database marketing with its Honored Guest program. The chain discovered that rapid attainability of rewards, automatic point accrual, attentive customer service and simplicity are the main attributes that guests want in a loyalty program, and it can now leverage that knowledge across all of its properties.

The construction of a marketing database let Choice gather more customer information in the first two weeks of its program than it expected to collect in a month. Although the database is the backbone of Guest Privileges, spokeswoman Allie Laban-Baker said, maintenance of the rewards program is only a small portion of what it will do for the company.

“Everyone is trying to do mass personalization,” Green said. “Everyone is trying to do it better, make everyone a little bit happier. Databases are the only way to do it.”

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