Company Update: Starwood's SPG Pro

Starwood Hotels & Resorts’ SPG Pro loyalty scheme was launched last month, offering guests rewards under one umbrella. Hotelier speaks to Asad Ahmed, Starwood’s vice president of sales EMEA, to find out how the firm is reaping the benefits of a joined-up approach

The 660-room flagship property of Starwood Hotels and Resorts, Sheraton Grand Hotel Dubai, is beginning to take shape on Sheikh Zayed Road next to the H Hotel. Overlooking the construction site is the Middle East head office of the company, which this year for the first time houses both the hotel sales teams and above property sales team.

According to Asad Ahmed, Starwood Hotels & Resorts vice president of sales for Europe, Middle East & Africa — who spoke to Hotelier Middle East during one of his quarterly visits to the region from his base at the Brussels office — these were traditionally “two disparate populations”.

As a result, one of Ahmed’s focuses since he began his role 18 months ago, has been on “focusing those pieces together”. Alignment has come in the form of more joined up communications between the sales team, sales training across the organisation, and ultimately in the end-result for the customer.

This “culture shift” is reflected in the launch of SPG Pro — an extension and consolidation of the Starwood Preferred Guest (SPG) scheme. Currently accounting for 50% of occupancy worldwide, and 51% in the Middle East, the SPG scheme is known for its status driven nature — rewarding guests with platinum and then gold status — and for its focus on experiential rather than material rewards.

Instead of winning air miles and room nights, guests are offered “experiences money can’t buy”, such as a golf match with Tiger Woods or back-stage passes to Cirque du Soleil.

One issue with the scheme, however, that Ahmed highlights was: “We didn’t have a programme for every potential B2B population” and with B2B visits accounting for nearly 70% of Starwood’s overall room revenue and the top 1% of these accounts driving 40% of Starwood’s B2B revenue, this was an issue.

“We had to try and plug that gap,” comments Ahmed, who explains that previously there were “business loyalty programmes that rewarded corporate bookers and a programme that rewarded meeting planners”, but the new programme is about “being able to put the pieces together”.

The launch of SPG Pro on October 15 at Starwood’s 1200 hotels globally means that guests can accumulate points for every type of visit under the same umbrella.

“At the end of the day, our hope is that we get more loyalty from the guests because we’re rewarding all of their behaviours and getting them incentives and rewards faster,” Ahmed continues.

“So previously you were getting points when you booked a meeting at a Starwood hotel. Next week you go on vacation and you stay at a Starwood hotel and you get SPG points because you’re staying as an individual.

“Great schemes on their own, but they didn’t recognise that you are an individual and you have potentially got two or three relationships with Starwood and we weren’t able to put those pieces together for you to optimise the potential loyalty and value that you get.”

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And of course the business benefits of the SPG Pro scheme are clear for Starwood — more repeat customers and smaller distribution costs, which means the sales team can make the most of every Starwood room, and thereby more effectively fulfil the company’s responsibilities to owners and stakeholders.

To further ensure an aligned approach to sales, training and development has been a major focus for Ahmed, and no less with the SPG loyalty scheme, which has been done across departments.

“[Training] won’t just be within the sales organisation; it will be across the organisation,” he says.

“When a customer enters the pipeline of conversation with Starwood, they might enter through a direct property, through our sales office, or somewhere in between. As they interact with all of the sales functions, it needs to be seamless to them.

“Everybody has to understand and engage with customers on the value proposition; what’s different and how this is potentially better for them, and our sales population will have a task in the first quarter of next year to really engage the customers.

Having the sales teams under one roof in the Middle East office makes this task in our region easier, with communication happening at multiple levels and throughout the course of a year, and over the course of a transaction.

“The sharing of information, the collaboration that’s involved with interacting with customers; there’s no such thing as ‘his customer’, but everyone is Starwood’s customer and we win the business or lose the business together,” adds Ahmed.

With 46 hotels operational today in the Middle East, and another 35 expected to open by 2017, including the 660-room property next door, the region as Ahmed acknowledges is “a pretty important part of our business”.

In fact, in the last year, the number of SPG members in the Middle East has grown by 11%, with more than 260,000 members having enrolled across the region in 2013.

SPG Members grew by 50% in Qatar, 14% in Kuwait and 10% in the UAE in 2013, and according to Ahmed, 51% of occupancy in the region is currently driven by the SPG programme — 1% higher than the global figure of 50%.

In fact, some hotels in the Middle East have 75–80% occupancy driven by SPG, which according to Ahmed serves to outline the scope of demand from a huge variety of different segments in this region.

“This is a very unique market in many ways in the sense that you have every type of guest,” explains Ahmed. “So we have a strong travel agent community, a strong corporate base, meetings and events, as well as weddings. So from a loyalty perspective it is very strong.”

Stat attack

• 260,000 SPG members enrolled in Middle East at end of 2013
• 50% growth of Qatar-based SPG members in 2013
• 51% occupancy in Middle East hotels driven by SPG in 2013
• Top 2% of SPG members drive 30% of Starwood's revenue
• 70% starwood room revenue driven by B2B accounts
• Top 1% of B2B business drives 40% of Starwood’s B2B revenue