Do Points really mean Prizes? Or better still, do points mean Conference Revenue?

Hilton Honours, Priority Club, Marriott Rewards, StarPoints, A/CLUB  points, Goldpoints Plus, Voila – just a few of the hotel rewards out there.

This is a subject that has always intrigued us here at The Conference Bench. The above programs work exceptionally well for rooms, rewarding repeat customers for their loyalty to their chosen brand or hotel chain, with points available for every £ or € spent on property. While working for Marriott I recall a great number of Marriott Rewards Millionaires passing through the doors of the Renaissance Chancery Court, with tales of spending upwards of 250 nights a year in Marriott properties ( get a life!!), upgrades, and generally being treated like royalty when in a  Marriott property.  I was also tasked with signing up Marriott Rewards members, as are nearly every front desk staff  member at all of the above hotel chains.

This is obviously a very powerful marketing tool – the numbers are insane– Marriott Rewards members number over 21 million from a cursory scan of google, and the other major chains are probably around the same number or in the case of IHG, 37 million members!!!!!

What we cannot understand is why hotel companies have not been able to harness this great marketing tool to power up their meetings and events revenue. In the UK a lot of the bookings are done by Conference Agents, who by the nature of their agreement with the hotels are not allowed to take points for placing bookings, so for the most part, those bookings can be excluded, although some of them do offer reward points to the guest once they are in the hotel. This “double dipping” always used to irk me somewhat, as not only is the hotel paying commission to the Conference Agent, they are also parting with rewards points for the organiser, even though they had very little say in choosing the property. Part of me thinks that hotels do not want to reward big conference and events business.

 As an example – IHG cap conference and events at 60,000 points per event (3 points per £ spent), and Hilton cap theirs at 100,000 points (1 Hilton Honors point per £ spent) The average points cost of staying in a hotel is  around 25,000 for IHG and 30,000 points for Hilton.    So with Hilton, the absolute maximum you are giving away is 3.5 free nights in a hotel for a £100,000 booking in Honors points?  What kind of a reward is that?!? – ok you can stay in a Hilton category 1 hotel for 7500 points, but something tells me they may not be the best/centrally located properties out there! The same is true of IHG, although a little better.. you only need to spend £20,000 to get three free nights with points!

Bearing in mind the actual cost of these stays that is reimbursed to the property by head office is around $60 US dollars per room per night (according to my anonymous source within IHG), you begin to see my point that they are not too keen on awarding big points for meeting and events!

One of the trends we come across a lot is that meetings are Seasonal and destination led – ie big meetings go from one destination city to the next and therefore demand is very difficult to track accurately. The above is true to an extent, and a good way of harnessing this marketing power for the big groups and chains would be to hook some of these annual/bi annual destination movers with the promise of rewards for loyalty – ie have it in a Hilton Hotel wherever you may be every year/six months, and we will reward you for bringing the business to us. Do it for five years on the trot and on the fifth year we will give every attendee 100,000 points each, and the major buyer 1,000,000!  Surely this would be a sure fire win for the client as well as the hotel chain – a nice booking that is worth a huge amount of revenue that repeats every year, or every six months, (be it in a different hotel or region) and the organiser/buyer is happy as they can build a hotel with all the reward points they have accumulated!  While in theory this is a win win, and seemingly very simple to do, in practice it would require a hell of a lot of cooperation between hotels, and the conference offices of each, as well as between regions, and all the politics that goes with along with that.   This is something that could be done with smaller, repeat training bookings that occur monthly within your hotel, but occasionally go and try the competition – what a lovely way to keep those base bookings that keep the department ticking over month after month with a relatively low cost reward – certainly costs less than agency commission!  Or come to think of it, another way of convincing guests to book directly with you – book with us and get the rewards directly.

Or is it a case of poor education?  From my experience, direct clients were rarely, if ever, told how many reward points they might earn from booking a meeting or event within a hotel! Is this a way to differentiate yourself from the pack?  Offer up the rewards during the booking process to add a little extra spice for the client to book directly. Granted they might ask for points from the other hotels they are getting quotes from, but this would certainly make the proposition a bit more rosy if up against what the client may view as a poorer reward scheme/no reward scheme.

The other question is of oversaturation. Do our clients have a wallet stuffed with every reward point card imaginable?  In this case is there a better alternative that has not been tried before? Yes, we are talking cold, hard, cash! Would it be better to offer the direct customers some lower lever of commission?  Say 3% for booking direct? 

 How are you using the massive marketing muscle of your group or chain that is the reward scheme?  Are you using it proactively?  We may be wide of the mark with the above blog post – if so, put us right in the comments!