Driving Loyalty with Hotel Rewards Sites

Judging by how often I’m asked to join a rewards program when booking any sort of trip, it’s clear that their popularity is on the rise in the travel industry. But just how effective are they?

Hotel Rewards websites, such as Marriott Rewards or IHG’s Priority Club, can attract hundreds of thousands of visitors each month. The largest hotel supplier reward site, Marriott Rewards, engages 19% of the total traffic to the overall Marriott.com website. For hotel chains, growing their rewards sites is critical to improving online channel effectiveness. Travelers who use rewards sites are on average 40% more loyal than non-users.

Most major programs have grown their online traffic in the past year, from November 2007 through November 2008. On average, each site grew by 21% over the past 13 months. The only site that did not manage a traffic increase was Choice Privileges, which declined 4% in users compared to the prior year.

Share of Wallet – the percent of hotel bookings that a given hotel brand captures among its customers or prospects – is a key gauge for measuring loyalty and rewards site performance. Marriott.com captured 68% of the bookings among members who visited Marriott Rewards in November 2008, the highest Share of Wallet among all competitors. On average, rewards sites were able to capture 50% of the bookings of their members.

With difficult market conditions surrounding the travel industry, increasing loyalty among online prospects is integral to hotel supplier’s 2009 success. With consumers more likely to cross-shop and price check than ever before, the incentives and benefits of a rewards platform will often be the deciding factor in the online travel purchase process. Rewards program managers must ensure that their online portals are best in class in order to drive the necessary usage and loyalty.

Comments

[bob03:]

Why no Wyndham Rewards included in the analysis?

Jan 15 03:42 PM

[Hudson Cros...:]

A good yard stick is that around 40% of upscale occupancy is driven by hotel loyalty programs - in other words, around 40% of guests are members of loyalty programs. It depends on the business mix at the hotel of course (business vs. leisure, group vs. transient etc) and by brand....

Jan 15 05:45 PM

[A traveller:]

I like Hiltons, but when I got a better Senior discount at ICH, I went for it. For me, it is all about the price, and if I can save 15.00 a night up front, I don't care about the points. Show me the money

Jan 16 11:56 PM

[WrldTravlr:]

Marriott's new program changes do a great injustice to their customers. Originally praised by the Senior VP of the Rewards program, Ed French, as a great "enhancement" to the existing program, thousands of loyal Marriott customers are up in arms over the changes as it devalues the existing program by as much as 60% on some reward levels. Marriott has had the reputation as being one of the best run corporations in all the world and is consistently listed as one of the top 100 companies to work for. How they can make a major boneheaded move like this just boggles the mind.

Jan 18 08:55 PM

[User 437419:]

Before going through this site I had no knowledge about Hotel rewards,but know I got some idea.
Thanks for sharing.

Jun 27 02:49 AM