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Skift Take
IHG is the latest travel company to revamp its loyalty program for a post-pandemic return of visitors, changes that, for one, tame owner labor costs.
InterContinental Hotels Group revealed on Wednesday how it was revamping its loyalty program. Changes included a new tier-and-bonus-point-earning structure and options to pick bonuses rather than receive standard ones after staying a set number of times.
Keeping costs down for owners of more than 6,000 franchised properties was critical, Denham, UK,-IHG said.
“We’ve transformed the benefits for our members in a way we’re confident delivers minimal-to-no-impact from a cost perspective to the vast majority of our hotels,” said Heather Balsley, senior vice president of global loyalty and partnerships at IHG Hotels & Resorts.
The program, renamed from IHG Rewards to IHG One Rewards, faced the biggest changes since its invention decades ago, said Claire Bennett, global chief customer officer.
The most eye-catching change? IHG introduced a fifth topmost tier level, diamond, which includes free breakfast, among other perks.
The more subtle design move was to ensure that a majority of the perks are managed by the IHG brand, to minimize friction for the owners and operators.
“A lot of the new benefits, except the free breakfast for diamond elites, can be delivered above property,” Balsley said. The program also increased “earn bonuses” across the board.
Letting Travelers Pick Their Perks
Perhaps the biggest novelty is so-called “milestone rewards.”
Most hotel loyalty programs have long offered generic perks for members after they met spending thresholds. After a guest stayed, say, 10 times in a period, a hotel might reward them with, say, free Wi-Fi access.
IHG will tweak that generic process by inviting its most frequent guests to pick their favorite perk from a few reward types.
The milestone rewards will become available to guests who have stayed at least 20 nights. After every 10 additional nights stayed, a guest will be able to use the app to pick from a set of rewards.
In the coming weeks, IHG will prompt customers, in waves, to update their IHG mobile app. The refresh will reveal a new look and the milestone rewards functionality.
Sample perks include a $20 food credit at property restaurants, a suite upgrade confirmable up to two weeks in advance, or a year-long membership to lounges. The scaling ladder of perks climbs up to 100 stays.
“All these enhancements are ones that corporate travel managers tell us they look for in a hotel loyalty program,” Balsley said. “The ability to have access to a club lounge can limit the cost of booking separate meeting rooms, and the included breakfast as an option for our diamond elite members saves costs.”
The milestone rewards will fully roll out for all members and 17 brands worldwide by early June.
Late Check-out Goes Mainstream
Owners and operators, meanwhile, will want to review how much additional revenue they get from the program relative to any additional costs for implementation and in light of their participation fees as franchisees. On average, loyalty members spend more than non-members, but servicing costs often rise.
IHG has invested in software from technology companies Amadeus and Oracle Hospitality that helps hoteliers handle some of the operational challenges of fulfilling loyalty program benefits.
For example, starting on Wednesday, program members will have the option to extend their checkout time until 2 p.m. if the hotel has rooms available.
Late checkout used to be a burden for operators because they didn’t have real-time insights into vacancies and housecleaning operations. They also hadn’t synced operational systems with their property management systems. Recent synchronization and upgrades promise to make it easier to fulfill late check-out requests.
IHG’s loyalty program is arguably the most important commercial driver for franchisees. So the group better hope its new program won’t raise the operational burden.
“More and more, hotel loyalty programs have to find ways to deliver experiences through technology,” Balsley said. “Honestly, at times, that means relying less and less on our hotel colleagues to deliver some of those benefits if you want to deliver experiences consistently at scale, especially in today’s hotel labor environment.”
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