Many hotel loyalty programmes today seek to reward both the company and event planner, with perks that can be used for the latter’s own pleasure. But will such incentives tempt the planner to put his own interest first, or worse, keep all the points for himself?
Greg Lowe and Caroline Boey find out what’s being done to keep abuse at bay
Loyalty schemes have long been a key revenue driver for hotels, with such programmes contributing more than half the occupancy for some global brands.
Traditionally, hotels used the initiatives to reward corporate clients and meetings planners while managing slower moving inventory and underutilised events spaces. More recently, they have become increasingly dynamic and sophisticated as brands realise they must offer more to earn the loyalty of members in an intensely competitive marketplace.
One major development in this field was Starwood’s launch of SPG Pro last year. The programme essentially combines a planner’s individual SPG (Starwood Preferred Guest) account with the corporate account that they manage.
Membership was also extended for the first time beyond meeting planners to include accredited travel agents who can also earn elite status with SPG, thus creating a unique proposal in the market, said Alison Taylor, senior vice president Starwood Sales Organisation, Starwood Hotels & Resorts Worldwide.
“With SPG Pro, we simply make it easier for our members to combine all different Starpoint earnings into a consolidated SPG account as opposed to having separate membership accounts in the past,” she said. “Members can transform their Starpoints into the redemption experience of their dreams — the choice and flexibility is all up to them.”
The new programme enables Starwood to focus on building longer-term relationships with members, with the icing on the cake being the ability of a member to keep all accrued points when they change jobs, subject to the terms and conditions of their employment.
Marriott Rewards Rewarding Events enables planners to earn points and miles for holding meetings, conferences and other events at participating properties, as well as enjoy personal benefits.
“Event planners who are also Marriott Rewards members can take advantage of any exclusive member offers that are promoted throughout the year for qualifying stays and earn bonus points through special offers from Rewarding Events. They can also redeem points for future meeting credits,” said Peggy Fang Roe, chief sales and marketing officer at Marriott International Asia-Pacific.
Le Club Accorhotels (LCAH) Meeting Planner offers a similar range of benefits, as well as the redemption of points for cash vouchers and special perks for elite members, such as VIP access to concerts. The hotel group has also recently improved the appeal of its loyalty programme.
According to Ianic Menard, vice president of sales, marketing and distribution for Accor Thailand, Vietnam, Cambodia, Laos, Myanmar and the Philippines, planners have been able to use their vouchers to pay for up to 15 per cent of a future event since March. “(We now also offer) a double-dipping model, giving points both to event participants staying at the hotel and the meeting planner. The latter points can also be split between two meeting planners,” Menard explained.
Are the programmes abuse-proof?
The business case for such schemes, and the renewed incentives for individual planners is sound. In the case of Starwood, B2B business accounts for almost 70 per cent of total room revenue, with each additional percentage point adding US$80 million to the company’s top line.
Loyalty clearly pays dividends. The question is whether ramping up incentives for individuals could result in situations where members put their own interests first, instead of finding the best deal for their company. Or, in the worst case, simply keep all the points for their own use.
Starwood, as do the other hotel companies speaking with TTGmice, insists there is nothing new about having individual accounts with corporate membership.
“Our B2B loyalty programme has always been for individuals,” said Taylor. “We take security very seriously and have the necessary safeguards to ensure good controls are in place.”
Accor, which also awards points earned under its LCAH Meeting Planner to individuals, has sufficient measures in place to prevent abuse.
“When registering for the LCAH Meeting Planner programme, organisers must complete a form: first, acknowledging they have the legal authorisation to participate in the programme with respect to their company’s rules; and second, declaring they have informed their employer about their participation in the programme, particularly the attribution of personal advantages associated with LCAH,” said Menard.
Likewise, Marriott’s loyalty programme has terms and conditions that clearly state that membership accounts are personal to the member. “With regards to earning points through company activities for personal rewards, this is an agreement to be made between the member and his/her employing company,” remarked Fang Roe. “Since we do not offer corporate accounts, there should not be instances of fraudulent activity whereby the individual benefits from the company’s account.”
But does the trade believe enough is being done to protect corporates?
Jeannie Techasiriwan, special events assistant director at Amway (Thailand), agrees with the hoteliers that it is the businesses themselves that must determine how points earned on a corporate account can be used.
She opined that planners and the companies they represent tend to be more focused on how they can use the various loyalty schemes to reduce event costs. “People have a lot on their plates, once they see other planners using the benefit (loyalty programme), they take an interest in it… We use Lufthansa Partnership Benefit Plus, SPG Pro and Fairmont,” Techasiriwan added.
However, a senior manager with an international business travel management company, who requested anonymity, said any hotel groups offering individual planners such benefits has a duty to safeguard against abuse and help educate clients, especially smaller companies, about any potential pitfalls in their loyalty programmes.
“The bottom line for hotels is to maximise venue occupancy and generate revenue,” he said. “In a fiercely competitive market like Thailand this could result in problems (where individuals use company points for their personal benefit).
Limitations as protection
For some companies, prevention is better than cure and they have set policies that prohibit their travel managers and event planners from utilising loyalty points gained from corporate spending.
Victor Lim, regional meeting and travel manager of Ikea, based in Shanghai, informed TTGmice: “My company policy does not allow employees to personally benefit from any air or hotel loyalty programmes.”
Some companies have also expressed a preference for immediate direct benefits to the event over a point system that allows for redemption later on.
A corporate travel manager in the financial services sector said his company’s policy dictates that a company account would have to be set up, and only best rates instead of points are allowed.
The assistant head of a travel management agency agreed that best rates is preferred and companies also value inclusions such as Wi-Fi and breakfast-on-the-go for its travellers.
A corporate travel manager with an IT firm said the sector tends to be strict with its travel policies and managing any loyalty programme would mean more work for the back-room audit department.
“Loyalty programmes never come into our RFPs. What is more important is last room availability, best rates, and amenities,” she explained.
