HHWLoyaltyWar
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Transcript of HHWLoyaltyWar
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7/29/2019 HHWLoyaltyWar
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Hilton Honors Worldwide Loyalty Wars
Divya IyerPGP15/140
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Hilton Honors Worldwide -not as a profit center but as a
service to HHC and HIC
Required to measure the effectiveness through set of metrics.
Membership was provided free of cost.
Members earned points during their stay at HHC or HIC
Hotels
4 tiers of membershipBlue, Silver, Gold and Diamond
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Yield Management increased revenue by 20% - Loyalty Program increased it by 23%
Higher Revenue
Keeps costs downprovides more rewards to customers
Collaborating with Partners
Franchisees see loyalty program as business driverhence attracted to invest
Working with franchisees
Know customer betterbetter service offering
Guest relationship
Portfolio of offerings to make the traveller use Hilton as preferred vendor
Helping travel managers gain compliance
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Hilton lready runs above breakeven point at70% occupancy ( Breakeven 68%
occupancy) The revenue obtained from the program is
hence profit generating revenue
VALUE OF THE PROGRAM Mn $
Cost of Program 17.55575342
Revenue 1349.9204
Gross profit 1332.364647
Nights paid (members) 7015000
Nights paid (non members) 1708800
Claimed nights 180000
Net nights 8543800
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Do we have to compete point by point?
Do we have to take a different positioning and
differentiate HHonors from Starwood?
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Annual Spend 2000 (assumption)
MEDIUM Stays needed Nights needed Points per dollar Bonus Points Points/NightStarwood 4 10 3 6000 600Hhonors 10 25 10 15% 23000 920Marriot 0 15 10 20% 24000 1600Hyatt 5 15 5 15% 11500 766.6667
PREMIUM Stays needed Nights needed Points per dollar Bonus Points Points/NightStarwood 25 50 3 6000 120Hhonors 28 60 10 25% 25000 416.6667Marriot 0 50 10 25% 25000 500Hyatt 25 50 5 30% 13000 260
Competitive point scheme Games Player would choose Hilton over Hyatt and Starwood in Medium and PremiumSegmentThus, the service oriented members need to be targeted
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Competing by loyalty programs increases reward value while they can
not charge higher prices. As a result, their profit margins will decrease.
Hilton, therefore, shouldnt play a point to point game.
Maintain current rewards levels and further customize redemption
choices and increase convenience of program useeliminating use of
certificates etc
Invest in expanding the distribution and making Hilton available at
various locations
Concentrate on the high-touch and feel guest experience
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THANK YOU