Make your trip pay using hotel-airline alliance programmes

Bhisham Mansukhani gives an insight into hotel-airline alliance programmes while compiling some of the major ones available to the Indian business traveller

Hotels and airlines are service providers intrinsic to a certain indispensable known as travel. Business travel, more topically. The case these days could be vice-versa given the lucrative proportions of this exclusive batch of travellers. Unlike the yearn of leisure travel that can emanate from one of a zillion coffee table conversational tangents, business travel is a tad bit more definite and purposeful – it is compelled.

Airlines have been successfully sustaining the concept of incentivising travel with the popular frequent flier programme. Hotels too, have theirs – loyalty programmes and for the dexterous corporate discount mongers, the bookers’ incentives. Fuse the two and there’s wrought an alliance, tailor-made to create a customer allegiance. There is an explicable method to the choice of travel and in a way hotel and airline alliances give their regular business travellers just that choice, based on the very rational and relevant premise of value for money. That choice may or may not supersede quality. That’s relative.

According to the Park Group of Hotels (boutique properties), there is an underlying method to these partnership programmes. It depends on the type of partnership programme that is worked out. The most popular being:

Miles Rewards Programme

In the Miles Rewards Programme most of the airlines offer free memberships to their passengers. These airlines are in turn partners with a hotel chain which offers certain amount of miles against the stay of these passengers, on presentation of these cards at the hotels. The amount of miles credited varies with the type of partnership arrangements and the airline and hotel involved.

Revenue Share Promotions

In most cases mutual partnerships are entered into wherein the passengers flying certain airlines get special privileges on specific trips and at certain hotels. This could vary with either specifications like round about trips, return trips vouchers etc., issued by airlines. Special rates are offered by Indian Airlines or Jet Airways, the main criterion being flying frequency / basic room tariffs.

The benefits of such programmes come mostly in terms of flying miles which can be redeemed as per guidelines and programme specifications (which differ from airline to airline). Mostly it is coordinated by a cell specifically regulating and controlling the programmes.

The programmes should be mutually beneficial to both parties as they have access to each other's database not directly but through each other. Over and above, the revenues realised to both is also one of the factors.

John Webb, general manager of the J W Marriott in Mumbai, believes it’s key that a rewards programme shouldn’t have hidden rules or fine print. “The Marriott Rewards Programme for instance has no such riders like timings, seasons, advance notice, black-out periods, cut-off periods or overlapping benefits. It’s as simple as earning points or miles for every dollar charged to the room bill.”

According to Dhananjay Saliankar, marketing and sales director for the Le Meridien, “Hotel loyalty programmes that include airlines are primarily for the individual corporate travel segment – entrepreneurs and the like with high net-worth who may not necessarily have access to the kind of contracts that demand certain large volumes. These individuals still want to enhance the value of the money they spend even if they cannot negotiate corporate deals on volumes. Hotels and airlines have a similar customer profile so it makes good sense any how. It aims at smaller businesses that are not covered by large corporate schemes because they do not produce the necessary number of room nights every year.”

There is plenty of reason to suggest this alliance has been in part forced by an anticipation of an implicit demand for such joint offers that offer an easy interchangeability of room nights and frequent flier miles.

Results from a survey initiated by InterContinental Hotels among 7,500 frequent travellers to determine the components most important to them, showed apart from location and price, travellers now demanded rich yet easy-to-use programmes in exchange for loyal repeat business.

The point within all this is that these partnerships aren’t any longer just good advertorial option for hotels - these are compelling, one of the factors that decide their share of the corporate travel pie.

A programme which stands out becomes a differentiating tool that will give the brand a stronger identity and be a point of difference for customers to choose one brand over another.

Hotels without allied programmes are at a disadvantage. Says the director of sales and marketing of a property that does not have such a programme, “In some ways, we do lose out because many corporate travellers are after this and when it comes to the final decision, they will choose one with a loyalty programme that allies with airlines”.

The InterContinental survey showed that location, price and loyalty programmes were essential for repeat business. Loyalty programmes have clearly become firmly established in the customer’s life with 96 per cent of respondents involved in some kind of loyalty scheme and 80 per cent carrying two loyalty cards or more.

The research reveals that loyalty programmes do deliver ROI for brands with 80 per cent of customers admitting to shopping more frequently and 66 per cent spending more with a company after joining a loyalty scheme. Just under half, 48 per cent, say they would either stop using or use a company less frequently if it withdrew its loyalty programme.

More worrisome is the number of customers who would stop using a company, if that company stopped their loyalty programme indicating that customers are more interested in the currency gained from the programme rather than the brand.

“Over-reliance on loyalty programmes is a dangerous thing, especially if they are not properly developed. Points-based systems now proliferate, but in difficult times, travellers are still more attracted to the best price rather than simple loyalty,” warned an Accor bigwig.

An international American Express loyalty programme survey revealed that more than six out of ten consumers feel that the perks of loyalty programmes positively influence their retail spending behaviour.

According to an American Express management source, “Building repeat sales from consumers is a huge priority for retailers and one way of achieving this is through loyalty programmes. For consumers, the ability to earn points is an important factor when deciding which retailer to use.

“The hallmarks of a successful loyalty scheme are to offer attractive rewards, ensure the programme is straightforward and easy to understand, and keep the offer consistent,” he revealed. Hotel loyalty programmes are one of the most powerful and effective marketing tools to retain existing customers and recruit new fans.

There is nothing as valuable as a loyal customer, in good times and especially in bad times. They are like the airline crew business for hotels, which provides steady business and a solid base from which to build up the occupancies.

For big chains such as Starwood Hotels & Resorts, Hilton International or the InterContinental Hotels, loyalty programmes contribute to as high as one-third of the business.

No wonder they are a hotel group’s sacred cow - revered to no end; and no effort is spared to make them even better and more effective.

InterContinental Hotels recently also conducted a survey among Priority Club Rewards members and hotel guests in five markets, including Australia, China, Hong Kong, Japan and Singapore. The aim was to understand key trends and what drives customer loyalty. They found that first, loyalty programmes encouraged travellers towards more brand loyalty. Secondly, personal benefits were the key driver of loyalty. Finally, ease of use and ease of point redemption are the single most important attribute of a loyalty programme. Benefits that customers experience from loyalty programmes varied, based on their specific needs and the features offered.

For proof of effectiveness, InterContinental Hotels’ Priority Club Rewards has driven 40 per cent incremental number of nights and revenue, generates 20 million room nights globally on an annual basis and 500,000 room nights in Asia-Pacific, which equates to USD 1.6 billion in revenue to the InterContinental group.

Hyatt

Gold Passport is Hyatt’s worldwide guest loyalty programme designed to enhance a member’s travel experience, offering exclusive benefits, privileges and free travel awards at every Hyatt hotel worldwide. There is no membership fee. All Hyatt Gold Passport members enjoy complimentary benefits that include a choice of Gold Passport points or airline miles on every stay. Points System: Members have a choice between Gold Passport points or airline miles on every stay. When choosing points, members will receive five points for every eligible US dollar or equivalent charged to their room at Hyatt hotels and resorts worldwide. In addition, those members choosing points for their stay will earn an additional 300 points when they fly with any of Hyatt’s airline partners in conjunction with their stay. Airline Partners When choosing miles for their stays, members may select from Hyatt's 30 participating airline partners including Air Canada, Alitalia, British Airways, Cathay Pacific Airways (Asia Miles), Delta Air Lines, KLM, Korean Air, Lufthansa and Singapore Airlines. Qualified members also have the option to convert their Gold Passport points to airline bonus miles with participating airline partners at a ratio of three Gold Passport points to one airline bonus mile/credit. In India, Hyatt runs a joint programme with Sahara Airlines (Star and Skies Promotion) presently wherein a customer flying Sahara enjoys a special tariff at a Hyatt property. Park Hyatt Goa Resort and Spa Staying at the Park Hyatt Goa Resort and Spa gives the guests the added benefits over and above the international Hyatt loyalty programme. It currently has packages with all the three major domestic airlines – Jet Airways, Sahara and Indian Airlines. Here both the partners, that is the hotel and the airline, get together and introduce a comprehensive holiday package, incorporating the flight and stay at the resort. Park Hyatt is part of the Jet Airways’ Elite Programme. Under this programme, both frequent flyers as well as one-time customers get certain discounts on the room rate depending on their privilege status – gold, silver or one-off.

The Leela

The Leela Hotels are involved in the Jet Airways’ Mileage programme wherein every member gets a certain number of miles per stay if he meets a certain qualifying rate. In addition, the guest gets an early check-in at 9 am and a late check-out at 6 pm, no extra charges for double occupancy and complimentary use of steam, sauna and jacuzzi in the Health Club.The guest is also entitled to an upgrade to the next category of room if available. Members of the Lufthansa Miles and More programme also get 500 miles per stay at all Leela Hotels. Leela Hotels also have a tie-up with the Singapore Airlines PPS Club where members are extended a late check out at 6 pm at no extra charge and free internet usage. The Leela Goa has tied up with Sahara, Jet Airways and Indian Airlines for air tickets as well as three-night stays at the Leela Goa. The summer and winter programmes are however priced separately.

Air Sahara

The Air Sahara Holiday plan (twin sharing) has tie-ups with hotels only in Goa. Options of packages (inclusive of air fare) differ depending on prices based on the type of property and the number of days opted for. The ‘Stars & Skies’ business plan offers one-night stay complimentary or at very nominal amounts. For business class fliers, one night stay is complementary at all hotels except Oberoi properties. Economy business travellers can avail of a wide range of hotels in the metros either free or by paying a nominal amount starting from Rs 500 to Rs 2,500 depending on the hotel demanded.

Marriott

Marriott Rewards gives travellers their choice of frequent flyer miles or points toward free vacations and merchandise when choosing any of nearly 2,600 Marriott hotels across 63 countries. In addition to earning points or miles for dollars spent at participating hotel brands, members who stay with Marriott just 15 or more nights during a given year also receive special “elite” benefits and services that make travel more convenient. Elite membership offers guests bonus points and miles. Depending upon how many nights a Marriott reward member has stayed at in any of the Marriott Hotels worldwide, he or she can belong to Silver Level, Gold Level or the Platinum Level. Points can be redeemed for rewards that include free hotel stays, frequent flyer miles, vacation packages and cruises. When enrolling in Marriott Rewards, members can select their earning preference as either points or miles (miles can chosen by selecting the preferred airline and providing the frequent flyer programme number). Membership to Marriott Rewards is free.

ITC-WelcomGroup

As a WelcomAward member, guests earn 'Stars' on every aspect of their business trip. Each time guests stay at any participating ITC-Welcomgroup hotel or dine at any of its restaurants, they earn ‘WelcomAward Stars’ against their bills which can be redeemed for a choice of rewards which include free flights. Enrollment to the programme is complimentary. WelcomAward's alliance with three airline partners, Indian Airlines, Air India and Jet Airways – allows guests to transfer WelcomAward Stars to leading airline frequent flier programmes. Indian Airlines/Air India – FRS Programme 1 Star = 2.5 Add-On Mileage Points. Jet Airways - Jet Privilege Programme 1 Star = 1.5 Partner JP Miles. A minimum of 500 WelcomAward Stars (and multiples of 100 thereof) per transfer is required.

Best Western

Whenever a member of Best Western’s Gold Crown Club (GCCI) stays at one of their hotels, he/she earns points that are equivalent to one point for every USD that they spend on the room rate at the hotel. Rates in rupees are converted to USD for calculating points. Guests may elect to be awarded airline miles instead of GCCI points, on GCCI partner airlines. Guests choosing this option are awarded 250 miles per stay, regardless of the duration of the stay. Northwest WorldPerk miles can also be utilised on the private domestic operator, Jet. GCCI Global Free Night Awards All member hotels of Best Western participate in the Global Free Night Award Programme wherein the guests can avail a free room night with as low as 800 points at participating properties. Presently majority of properties in India accept a free night at 800 points. The programme membership is free of cost. Apart from being associated with the world’s largest hotel chain, members earn GCCI Points or Airline Miles on every stay at a Best Western hotel. These points and miles can then be redeemed for “Free Night Awards” at Best Western hotels and on GCCI partner airlines. Best Western’s Northwest WorldPerk miles can be utilised on Jet Airways. International travellers earn points towards free room nights, dining, shopping, savings bonds, prepaid gas cards and airline mile. A Gold Crown Club member may use a maximum of 125,000 earned points to procure awards during a twelve month period.