Starwoood, IHG and Accor, three of the world’s largest hotel groups, have decided all customers are not equal, running loyalty programs that actually devalue some of their biggest clients, thereby inverting the way these schemes are supposed to work: that is, to give those who spend the most money the greatest rewards.
They’ve created double-standard loyalty schemes under which the points-earning power of meeting planners, who often book multiple guest rooms and meeting space, is a fraction (as low as 16%) of standard customers.
Let me explain using Starwood as an example.
Under Starwood Preferred Planner meetings organisers earn 1 Starpoint for every US$3 spent with a maximum of 20,000 Starpoints per event.
Starwood Preferred Guests get 2 Starpoints for every dollar they spend, no cap.
That is six times more, or less, points earning power than an events organiser for the same money.
It means an event organiser has to spend US$48,000 at a Starwood property such as Sheraton On The Park in Sydney to receive a single “reward” room at the same hotel which, according to the Starwood website, would cost from 16,000 Starpoints on a random day (in this case March 11).
A Starwood Preferred Guest, however, would spend US$8000 to receive the same room.
That’s a huge difference and one that’s unlikely to engender loyalty from the meeting planner, who is certainly not going to make a decision to book an event at a Starwood property based on its loyalty scheme.
Other hotel groups have similar schemes though not so skewed.
IHG’s PriorityClub gives meeting planners 3 points for every $US spent compared with 10 points for standard member bookings, while Le Club AccorHotels gives meetings bookers 1 point for every €2, half the standard reward.
Online Travel Agent Hotels.com has undertaken extensive research into what consumers want from such programs.
“Simplicity was absolutely paramount and not only that, being rewarded quickly,” says Katherine Birch, Marketing Director of Hotels.com in Australia and New Zealand.
Under its scheme, customers get a free night for every 10 they book with the type of room calculated by averaging out the 10 night spend.
Of course, you can’t book conferences through Hotels.com so any comparison falls down but it is hard to argue with their findings – simplicity and immediacy.
I’m not sure if the question was asked, but I am sure that fairness would also rank highly.
That is, everybody’s money being treated with the same respect because loyalty cuts both ways.