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  • Hilton Honors Worldwide Loyalty Wars: Divya Iyer PGP15/140

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    Divya Iyer
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    Hilton Honors Worldwide Loyalty Wars document summarizes Hilton's loyalty program. The program aims to increase customer loyalty and revenue rather than operate as a profit center. It offers four membership tiers that allow members to earn points for hotel stays. The program increases Hilton's revenue and helps them collaborate with partners while keeping costs down. It also helps Hilton better understand customers and improve service. The program operates at a profit even at 70% hotel occupancy. Competing purely on points could decrease profit margins, so the summary recommends Hilton differentiate its program by customizing rewards and redemption while expanding availability and focusing on customer experience over points.

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    Hilton Case

    Original Title

    HHWLoyaltyWar

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    Hilton Honors Worldwide Loyalty Wars document summarizes Hilton's loyalty program. The program aims to increase customer loyalty and revenue rather than operate as a profit center. It offers four membership tiers that allow members to earn points for hotel stays. The program increases Hilton's revenue and helps them collaborate with partners while keeping costs down. It also helps Hilton better understand customers and improve service. The program operates at a profit even at 70% hotel occupancy. Competing purely on points could decrease profit margins, so the summary recommends Hilton differentiate its program by customizing rewards and redemption while expanding availability and focusing on customer experience over points.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    293 views8 pages

    Hilton Honors Worldwide Loyalty Wars: Divya Iyer PGP15/140

    Uploaded by

    Divya Iyer
    Hilton Honors Worldwide Loyalty Wars document summarizes Hilton's loyalty program. The program aims to increase customer loyalty and revenue rather than operate as a profit center. It offers four membership tiers that allow members to earn points for hotel stays. The program increases Hilton's revenue and helps them collaborate with partners while keeping costs down. It also helps Hilton better understand customers and improve service. The program operates at a profit even at 70% hotel occupancy. Competing purely on points could decrease profit margins, so the summary recommends Hilton differentiate its program by customizing rewards and redemption while expanding availability and focusing on customer experience over points.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 8

    Hilton Honors Worldwide Loyalty Wars

    Divya Iyer PGP15/140

    Hilton Honors Worldwide -not as a profit center but as a


    service to HHC and HIC

    R equired to measure the effectiveness through set of metrics. Membership was provided free of cost. M embers earned points during their stay at HHC or HIC

    Hotels

    4 tiers of membership Blue, Silver, Gold and Diamond

    Higher Revenue
    Yield Management increased revenue by 20% - Loyalty Program increased it by 23% Collaborating with Partners Keeps costs down provides more rewards to customers Working with franchisees Franchisees see loyalty program as business driver hence attracted to invest Guest relationship Know customer better better service offering

    Helping travel managers gain compliance


    Portfolio of offerings to make the traveller use Hilton as preferred vendor

    Hilton lready runs above breakeven point at 70% occupancy ( Breakeven 68% occupancy) The revenue obtained from the program is hence profit generating revenue
    7015000 1708800 180000 8543800 VALUE OF THE PROGRAM Cost of Program Revenue Gross profit Mn $ 17.55575342 1349.9204 1332.364647

    Nights paid (members) Nights paid (non members) Claimed nights Net nights

    Do we have to compete point by point? Do we have to take a different positioning and differentiate HHonors from Starwood?

    Annual Spend

    2000

    (assumption)

    MEDIUM Starwood Hhonors Marriot Hyatt

    Stays needed Nights needed Points per dollar 4 10 3 10 25 10 0 15 10 5 15 5

    Bonus 15% 20% 15%

    Points 6000 23000 24000 11500

    Points/Night 600 920 1600 766.6667

    PREMIUM Starwood Hhonors Marriot Hyatt

    Stays needed Nights needed Points per dollar 25 50 3 28 60 10 0 50 10 25 50 5

    Bonus

    25% 25% 30%

    Points 6000 25000 25000 13000

    Points/Night 120 416.6667 500 260

    Competitive point scheme Games Player would choose Hilton over Hyatt and Starwood in Medium and Premium Segment Thus, the service oriented members need to be targeted

    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 use eliminating 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

    THANK YOU

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