GHA Discovery Proliferation: Why Small is More Powerful in Hotel Loyalty
Running a loyalty program requires investment in technology to set it up, from databases to consumer front-ends to integration with employee workflows, as well as the cost of rewarding customers (rebate value). Therefore, it may cost a lot of money. Small businesses may not be able to do it in an effective manner due to the following reasons:
- Costs too high to amortize across a limited scale business
- And without the scale to meet customer needs wherever they are, it’s difficult to maintain customer loyalty. If a loyalty program is optional, it can flip customers over and choose your business, but it needs to be optional first.
For small and medium-sized enterprises, federated loyalty program It might be a good solution. These work well in many parts of the world. It hasn’t been successful in the US (see American Express Plenty, but there I blame poor execution, such as asking consumers to take and upload photos of their receipts).
In the hotel space, we have Marriott, Hyatt, IHG, and Hilton (among others). Participating hotels may be part of that chain, but the chain does not own most of those hotels. They pay for access to customers and sometimes also pay management fees.
Hyatt is particularly active in signing deals with partners Hotels other than those with management or franchise agreements, first partnered with MGM Resorts (although Marriott plans to partner with MGM Resorts instead starting next year) and now with SLH Hotels and more. These companies will form a partnership of sorts with Hyatt. Other chains are making similar moves.
GHA Discovery is not a hotel chain or management program. But it’s a hotel loyalty program, a federated program, which acts as a loyalty platform across 40 small hotel chains.
Participating brands include Anantara. Viceroy. Sukhothai; Park Royal; Pan Pacific; Outrigger; NH Hotel; Marco Polo Hotel; Leela. And Kempinski.
While its footprint in the U.S. is small (especially since Omni spun off) with just 14 hotels, it has 800 hotels in 100 countries, a total that’s not even close to Hyatt.
Two years ago, GHA, a global hotel alliance, fully restarted its program.
- Previously there were no points based on experience.
- Earnings and redemption currencies have been introduced. If your members prefer the experience, they no longer have to. give up Points earned elsewhere for staying at GHA participating properties
- Earning elite status is now easier, with top-tier Titanium now available after 30 nights or $15,000 spent or 3 Brands (If you earn on 3 different brands within the group, you can actually earn top-level elite status in just 3 nights). Perks naturally include bonus points, upgrades, and early and late checkouts.
- They also It is reported that the status match is good. If you have recently stayed at least one night in one of our hotels.
And they seem to be doing very well – Third quarter numbers is impressive.
- 25 million members. A year and a half ago, with the addition of NH Hotels, I think we had 20 million members. Registrations in the third quarter increased by 46% over the third quarter of 2022.
- Send guests from one brand to another. Discovery members continue this program across brands, and revenue from guests who stay and visit a brand increased 55% year-over-year ($79 million in the third quarter).
- on a large scale Year-to-date revenue of $1.7 billion (double the same period in 2022) and room nights up 31%
- enthusiastic members Redemptions increased by 90%. This is somewhat expected with new programs as more members reach a valid account balance for redemption.
In general, I think loyalty is maximized by:
- smaller programs To keep customers loyal, you need to deliver more to them.It’s easy to stick with Marriott or Hilton, but it takes effort to stick with chains that have smaller footprints.
- premium brand If you have more room revenue and margin to invest in loyalty, and the incremental return on your business is greater.
- Owned hotel Because it’s easy to integrate programs and ensure consistent benefits. Franchise hotels value the customers served by the brand, but have an incentive to free ride rather than contribute to the brand.
While GHA has the advantage of being small and often (though not always) at a premium, the federated loyalty program is a step removed from franchising. However, they seem to be doing a great job and offer a variety of experiences in Europe and Asia.
Two GHA executives receive member-voted Freddie Awards for most noteworthy programs of 2022 and 2023
I always like to consider GHA Discovery properties. As a Hyatt top tier elite for almost 15 years and a Marriott lifetime Platinum member, that’s often difficult. In many cities where I would like to stay in their hotels, the hotels are just too nice for me (and beyond my budget when I don’t have money for personal stays).
