Hotel & Motel Management - May 5, 2008 - (Page 48)

News H&MM May 5, 2008 | HotelMotel.com Loyalty programs contribute to good will points as a bank account,” Dowling said. Some hotel groups are moving away from what Dowling calls the “amenity race” and are taking steps to condense their loyalty programs. In October 2007, Carlson Hotels Worldwide uniﬁed its two global loyalty initiatives under GoldPoints Plus. “We are doing everything we can to keep it as simple as possible because people just don’t have time anymore to try to understand stuff,” said Fredrik Korallus, executive v.p. of revenue generation at Carlson. “If we make it easy for them, they will engage more with us.” The simpliﬁed model has been working: Customer satisfaction rates have increased steadily since October, membership growth is up 10 percent over the previous year and the number of stays per member is up 15 percent, according to Korallus. In the points race, it’s easy to get caught up in the myriad amenities and bonus rewards. But some hotels and guests are taking a step back and exploring some altruistic alternatives. Kimpton Hotels & Restaurants offer its top-tier guests the option to donate their end-of-year bonus to charity. Kimpton suggests three of its charitable partners: Dress For Success (which provides professional attire to underprivileged women), The Trust for Public Land and the HIV/AIDS Red Ribbon campaign. Kimpton also will donate to an organization of the guest’s choice. Going green is easy at Carlson Hotels Worldwide, where guests can donate points to Carbon Neutral to offset their carbon footprints (one European member donated 1 million of his points anonymously). “It is something that we feel there is a demand for from customers,” said Fredrik Korallus, executive v.p. of revenue generation. Carlson also is partnered with the World Childhood Foundation. Through Best Western International, Hyatt Hotels and Resorts and Starwood Hotels & Resorts Worldwide, guests can donate to the Make-A-Wish Foundation. Best Western also offers options tied to global events like Hurricane Katrina. “During those catastrophic events, we ﬁnd that people open up their wallets,” said Dorothy Dowling, senior v.p. of marketing and sales at Best Western. “They open up their bank account of points during those periods.” While charitable alternatives aren’t as popular as mainstream rewards, hotels continue their commitments to the organizations and work to educate guests about these options. “We’ve deﬁnitely had a lot of questions about [the charitable alternatives]. Our customer service center gets a lot of inquiries,” said Korallus. “It’s all part of the education of the consumer.” —Jinny VanZanten Reward options Continued from page 4 marketing. “We’re about immediate rewards in the room,” she said. To boost customer loyalty, in 2007 Kimpton hotels began offering its top-tier qualiﬁers openended redemption options—anything from ﬂat-screen TVs for their home to a gift certiﬁcate to a favorite store—for its end-of-year rewards. “We’re definitely seeing a change in the frequency of the guests staying with us,” said White about Kimpton’s relatively young program, which launched in 2004. “We have some ﬁercely loyal guests.” Starwood Hotels and Resorts Worldwide took the unique member experience to a new level with its online loyalty point auctions. Since March 2007, guests can use points to bid on lavish experiences like tickets to the MLB All-Star Game or a chance to walk the red carpet at a movie premiere. sonalization program, but it still moved to add a point element, TripRewards, last November. “The data tells us that our customers expect to receive points for their stays,” said Mazzucco. “Loyalty programs in the hotel space have become so ubiquitous that people expect to get them, just like they expect to get a clean room and a hot shower.” Best Western International’s Gold Crown International program Ng celebrates its 20th anni- INTERSTATE versary this year by sticking to what the chain has found its customers want: a ﬂexible point plan. While free nights are its customers’ favorite perk, Best Western makes sure to offer options like earning gift cards or airline miles that appeal to its wide range of consumers, said Dorothy Dowling, senior v.p. of marketing and sales. “We have almost a 50Back to basics 50 split of leisure and corFor some chains though, porate customers,” said catering to guests doesn’t Dowling. “Sometimes mean forgetting the bacorporate road warriors, Dowling sics. Recent customer BEST WESTERN interestingly enough, studies show that, while do not elect to take the guests appreciate personfree night. They spend so alization, they also expect points much time on the road that they or free nights. take the gift card option.” Best Wyndham has seen year-over- Western also moved to a no-expiyear growth in customer satis- ration policy on its loyalty points. faction with its ByRequest per- “Consumers deﬁnitely view their Future of loyalty market Looking ahead, not everyone is as bullish on points. The loyalty market is differentiating, and all are looking for cost efﬁciency. “With anything, you have to keep growing and you have to keep adding,” White said. “The market is so saturated with those points that you really get to a place where you have to offer more and more and the points aren’t as valuable. I think that’s a tough place to be in.” Korallus sees loyalty programs continuing on a learning curve in the coming years. Historically, loyalty point databases were used to identify, track and market. “That’s going to take the pressure away from these programs, because the program doesn’t come free,” said Korallus. “If you can ﬁnd another way to be more efﬁcient in marketing through knowing your customer, that’s the way of the future.” These initiatives come at a price: The total expense of operating loyalty programs averages out to about 2-2.5 percent of total revenue, according to Leslie Ng, chief investment ofﬁcer for Interstate Hotels and Resorts. “It’s a signiﬁcant cost,” said Ng. But he thinks the programs have value. “The customers that come in through these programs are typically your most loyal and best customers,” he said. hmm@questex.com chasing power and just plain old TLC.” Collins called HCS, which will own 25 percent of the joint venture, an ideal partner. Continued from page 4 Four properties with more than 800 nity that did not ﬁt our current brands,” rooms are scheduled to open May 1. Six adsaid Doug Collins, chairman and c.e.o. of ditional properties with 1,300 rooms will America’s Best Franchising. “We liked the open this year. property and HCS and wanted to do busi“The properties joining us are upscale ness with them.” properties in excellent condition,” Collins The company’s services may said. “We’re looking for three-star be well suited for nontraditional or better properties that we can franchisees like condo-hotel opadd value to. Our brand will only erators, Collins said. work if we can bring value to guests “We believe our services, and owners of the facilities.” terms and fee structure are reThe brand will have some sigsponsive to this underserved marnature touches, such as eco-friendket,” he said. “The services they ly initiatives, but initial physical may not be getting include effecchanges primarily will be signage. tive property Web sites, brand Collins Properties will be able to use the Web sites, referral programs, pur- AMERICA’S BEST 3 Palms name or the tagline “a 3 3 Palms Palms Hotel.” Each of the properties will have a distinctive look. Collins does not foresee creating a new-construction prototype. The brand will grow selectively in destination locations, he said, with the ﬁrst properties located in Florida. “Central Florida is an excellent place to grow a brand, particularly an upscale leisure brand,” Collins said. “We think our brand will have a place nationally and perhaps even internationally.” Providing results to property owners is more important than rapid system growth, he said. “If we can increase the bottom line of the owners, the growth will come,” Collins said. “I do think we could add 15 to 20 properties the ﬁrst year. If we show results, we should be able to continue that pace.” He called the fee structure simple: $25 per month per room; reservation fees are 7 percent of delivered reservations; initial fee of $20,000; no hidden costs and no liquidation damages; and the franchise can be terminated at any time with six-months notice. The brand has an enormous advantage in that it’s not starting the brand from scratch, Collins said. “We’re not big risk-takers,” he said. “If we can add value to this initial portfolio, we’ll be successful.” hgunter@questex.com http://HotelMotel.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - May 5, 2008

Hotel & Motel Management - May 5, 2008 Contents Pipeline Favors Established Companies 3 Palms Debuts in Upscale Tier Guests Want Reward Options Perspective Legally Speaking Marketing Matters Consultant’s Corner On Finance What Women Want Maintenance Doctor Trends & Stats Special Report: Top Hotel Brokers Design: Tune Into Music Programs Hot Products: PTACs On the Block: Silver Lining in Bleak Hotel Sales Market Events Transactions Supplier News Consumer Insight: The Importance of Creature Comforts When Traveling Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - May 5, 2008

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