Asian Hotel Groups Take Bold Steps to Reform Loyalty Programs
NH Hotel Group’s Ramón Aragonés (left) and GHA’s Christopher Hartley. NH, which joined GHA Discovery recently, boosts the loyalty program’s portfolio to 800 hotels and 40 brands. Photo by Global Hotel Alliance
By Raini Hamdi, 04 July 2022
Global Hotel Alliance (GHA) and Shangri-La Group show that Asian chains are as cognizant as global mega chains of the need to transform loyalty programs. They may even have better ideas.
GHA Discovery, the loyalty program of independent hotel groups with Asian shareholdings including Minor, Kempinski and Pan Pacific, introduced the industry’s first digital rewards currency, Discovery Dollars, as the cornerstone of its revamp last December.
Members are rewarded for their loyalty from the very first stay with these dollars (D$1 = US$ 1), starting with 4 percent on eligible spend, and higher as they move up the membership tiers.
In the first quarter, GHA Discovery issued D$25 million, said GHA’s CEO Christopher Hartley. Sixty percent of D$ redemptions were made on cross-brand stays, i.e., stays from members who enroll with one GHA brand and stay with another.
According to Hartley, this proves the new currency is encouraging members to try new brands within the alliance and is driving cross-brand revenue for GHA hotels. In the first quarter, this was almost 2.5 times higher than the same period in 2021.
At the same time, the amount of D$ rocketed as members were upping their spend while GHA hotel brands reported higher-than-normal ADRs, he added.
The Modern Loyalty Plan
GHA’s market research shows that apart from a more transparent, instant and easy way to earn and redeem rewards scheme, guests want programs that are more flexible and lifestyle-driven.
“The research not only reflects our members’ feedback but the overall evolution of travel,” Hartley said.
The evolution includes the rise of domestic travel, family staycations and work or study from hotels, forcing programs to address these new patterns to remain relevant.
GHA Discovery is responding by allowing guests to earn and burn D$ in any GHA brand hotel on spa, dinner or drinks — even at home and without a stay, effective next year. Currently a stay is required to redeem D$.
Already today the program has offers that give members free access to hotel facilities such as beach/pool, gym and sauna. It also curates not just stay deals, but local offers, which are typically discounts on F&B, spa treatments, etc, and unique experiences for members to book. This is in line with guests’ desire for a lifestyle, not just a stay, and to help GHA hotels earn incremental revenues beyond roomnights.
Currently, 500 local offers and exclusive experiences are available but with NH Hotel Group having joined the alliance on June 20, Hartley expects a “substantial” boost in these offerings.
Owned by Minor, NH has 350 hotels under three brands. This brings to 800 hotels and 40 brands that GHA Discovery’s 22 million members can access in 100 countries.
While that is big, it’s small when compared with, say, IHG One Rewards with 6,000 hotels and 100 million members.
Big Difference
But the big difference between GHA Discovery and global chains’ programs, said Hartley, is that it is majority owned by GHA member brands including Minor, Kempinski, Corinthia & Pan Pacific, and its primary aim is to drive incremental revenues for these brands.
“There are no annual fees or fixed fees to participate, and so hotels are only paying a low, variable performance fee, which makes our business model very attractive and generates a high ROI for our member brands,” said Hartley.
Minor Hotels’ chief commercial officer Michael Marshall added that GHA Discovery competes well with the other programs as it features “independent and culturally diverse hotel brands in the upscale and segments that retain their individuality and uniqueness,” attributes that are even more sought in post-lockdown travel.
Minor is actively involved in leading the program’s global strategy, said Marshall. As owner and operator of hotels, it has insights on mega chains’ loyalty programs. In its on-going lawsuit against Marriott, Minor alleged that Bonvoy brings low-margin business to its JW Marriott Phuket.
“The redemption rates for members redeeming their points is very low with the Bonvoy programme, resulting in a lot of this low-rated business for the JW Marriott Phuket, which is a very challenging situation,” claimed Marshall.
Meanwhile, Shangri-La Group revamped its Golden Circle program in April, citing similar changes that customers want to see. This includes a simple and clear way to earn points (US$ 1 = 15 points) for all Shangri-La products and experiences. As well, more benefits such as Shangri-La All Access, which grants members full access to hotel facilities where they live, even without staying.
Another is more flexibility, such as using cash, points or both for stays and dining experiences, and removing blackout dates and dynamic redemption rates for all room redemptions.
A new, invitation-only membership tier, Polaris, offers benefits such as unrestricted access to Shangri-La facilities worldwide even without staying overnight, along with a dedicated global Polaris concierge and Polaris Discovery experiences.
“Shangri-La Circle is a contemporary travel and lifestyle platform where we curate heartfelt experiences for members, offer them more simplicity, flexibility, privileges and recognition, and celebrate their personal journeys of good life,” said the chain’s chief marketing officer Christina Lu.
The program also incentivizes members to book perks-laden stays curated by the Circle team and released on the 6th day of each month. These offers are available for only 48 hours.
“The pandemic has given us the unique opportunity to escalate our transformation efforts. One of the critical things is how we can better serve our customers in the rapidly evolving customers’ expectations and demands through more direct connection and deeper engagement,” said Lu.