What are your freebies worth?

Loyalty programme addict and Hilton HHonors member, Up in the Air?s Ryan Bingham, better known as George Clooney: as a frequent traveller, one would t

Loyalty programme members spend more and stay more at hotels, but as a result, expect good earnings and easy redemption. Louise Oakley investigates the scale of their value to hotel firms.

Hotel loyalty programmes have been around for close to 30 years, after pioneering launches from InterContinental Hotels Group and Marriott in the US in 1983.

Hilton joined the club in 1987 with Hilton HHonors and since then, the business of rewarding loyal guests has become essential for hotel chains, as well as an increasingly useful tool for F&B brands, boutique properties and independent operators.

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Most recently, Ritz-Carlton introduced a loyalty scheme, linked with the existing Marriott Rewards, citing growing demand from guests over the past 18 months.

Shangri-La completely restructured and extended its Golden Circle programme, while locally, Landmark Group unveiled its Shukran customer loyalty card covering all of the Citymax Hotels F&B outlets, standalone restaurants as well as its retail stores.

At the same time, the offers and promotions from established programmes have become all the more enticing and competitive — from February 1, Marriott Rewards members will earn one free night for every two paid stays they make through to the end of April (up to two free nights per member).

Over at Hilton, from now until June 30, HHonors members have the opportunity to redeem free nights with 40% fewer points at participating hotels worldwide with the Point Stretcher Rewards promotion, enabling loyal members to earn free rooms faster at more than 1800 participating hotels.

Such tempting offers are not about good public relations; they are designed to fill rooms, encourage guest spend and reward hotels’ most frequent guests — the people that help to grow occupancy rates year on year.

Hilton HHonors members typically generate more than 40% of occupancy across the portfolio — which totals more than 40 million guests, reveals the company’s senior vice president for global customer marketing, Jeff Diskin.

“When we keep our loyal customers happy, our business thrives,” asserts Diskin.

A similar figure is true at Starwood, which introduced the Starwood Preferred Guest (SPG) programme in February 1999.

Starwood Hotels & Resorts, Europe, Africa and Middle East senior director, digital, loyalty and partner marketing, Steven Taylor, says: “Today SPG is a powerful and growing force for us that drives nearly one out of two guests in our hotels worldwide. Our SPG members now represent 41% of total occupancy for our hotels in Europe, Africa and Middle East”.