(What should owners be aware of with the roll out of Marriott International’s new loyalty plan? Find out from HOTELS blogger Chad Crandell, CEO of asset management company CHMWarnick)
Marriott International has announced long-awaited plans for how it will be formally combining all three of its running loyalty programs – Marriott Rewards, The Ritz-Carlton Rewards and Starwood Preferred Guest (SPG).
Marriott reiterated its intent to combine the three separate programs into a single loyalty platform – with a new name to be revealed at a later date – with a goal of optimizing value for its members, as well as for owners. Recently announced changes will go into effect in August 2018, keeping the three program names until with the consolidation is completed with full roll-out anticipated to occur in early 2019.
From an ownership standpoint, major gripes with all hotel brand loyalty programs (not just Marriott) in recent years have included issues such as:
- How reimbursement for loyalty stays are calculated (or not calculated) as a function of brand-determined occupancy thresholds, and often at a flat, reimbursable rate if very high occupancy levels are not met – a practice inconsistent with optimizing bottom-line profits;
- High costs associated with brand promises to support loyalty member perks, as well as program costs overall;
- Disproportionate redemptions and cost for resorts;
- Limited control of redemptions (no blackout dates);
- Whether “loyalty” programs even drive “loyalty”; and,
- ADR erosion associated with lower rates offered through “Book Direct” campaigns; among many other issues.
Needless to say, owner skepticism surrounding loyalty programs is real.