Kindle, OpenTable and Grubhub.
CEO Keith Barr said the company
will focus on additional partnerships
that differentiate the program.
The company is scaling up tech
initiatives through its loyalty app,
such as mobile check-out, which is
live in more than 3,000 U.S. hotels;
Alipay, which integrates with the
app and is accepted at 70 percent
of IHG hotels in Greater China; and
IHG Connect seamless Wi-Fi log-in, which is installed at more than
3,000 hotels in the Americas and
soon will roll out globally.
Choice Hotels International
Choice Privileges added more than
5 million new members in 2017,
which pegs the program’s growth
at nearly 10 million over the past
two years. President and CEO Pat
Pacious said the loyalty program
has 35 million members. Since the
industry rolled out loyalty member
discounted rates in 2016, hoteliers
have been able to realize revenue
growth through proprietary booking channels as loyalty membership
has grown. For Choice, almost $6
of every $10 of revenue came from
the company’s proprietary channels,
which include desktop and mobile.
Pacious said Choice’s brand.com
website is the focus of the hotel
company’s distribution strategy and
the channel grew faster than all other distribution channels last year.
After revamping Wyndham Rewards two years ago, Wyndham
Worldwide has been able to grow
its loyalty program to almost
55 million members. The company
expects to further expand the program once its $1.95 billion acquisition of La Quinta Inns & Suites
closes in the second quarter of
this year. La Quinta Returns has
13 million enrolled members.
Le Club AccorHotels reached 41 million members in 2017, a two-fold
increase since 2014. Accor’s loyalty
members account for 31 percent of
the company’s business volume.
While Le Club has seen improvement, chairman and CEO Sebastien
Bazin said its metrics aren’t good
enough and that they should be at
“50 million, 60 million, 70 million”
members. He said the company is getting there as the network expands but
that U.S. hoteliers started their programs 35 years ago and loyalty members account for 50 percent of those
companies’ business volumes.
Travel managers may be familiar with the benefits of virtual cards:
They provide a payment solution for those who don’t have corporate
cards, and they reduce fraud, time filing expenses and time reconciling transactions. That all adds up to cost savings, but hotel solutions company HRS has claimed that clients that implemented virtual
cards also reduced hotel costs by an average of 12 percent. Booking
and traveler behavior also changed when companies implemented
In 2016 and 2017, HRS evaluated 30,000 bookings for 12 clients
that implemented virtual card programs with AirPlus or American Express, both of which are HRS partners. Within the study’s two-year
time frame, HRS analyzed a 12-month period for each client—the
start time for each was based on when the client rolled out virtual
cards—to capture before-and-after data for each. The bookings HRS
analyzed were primarily for hotels in Europe, North America and
high-volume Asia/Pacific countries like China, Japan and Singapore,
an HRS spokesperson said. Clients in the study had worked with HRS
for at least a year before deploying virtual cards.
Before implementing virtual cards, clients paid an average room rate of
112.30 euros. The rate dropped 12 percent to an average of 98.60 euros
after clients deployed virtual cards, according to HRS. Additionally, travelers under virtual card programs tended to book more price-sensitive
regional and local hotels; bookings in this hotel segment increased from
30 percent to 40 percent following virtual card implementation. Travelers under virtual card programs also tended to book trips 11 days prior
to travel, whereas they’d booked an average of 8. 5 days in advance
before virtual card implementation. The no-show rate also dropped an
average of 15 percent following deployment. “With travelers knowing
that payment for the stay is already in place, they appear to be less likely
to cancel at the last minute,” the spokesperson said.
“People are more likely to act in normative ways when they feel
that their behavior is being observed,” HRS wrote. Implementation of
virtual cards, which offer more transparency to the travel program,
tells travelers that the company is observing travel costs and behavior. That prompts them to book in line with the company’s interest,
according to HRS.
Additionally, virtual cards eliminate the need to pay in advance and
to file expenses later, and thus, HRS said, travelers are more inclined
to use company-approved booking tools, which display preferred
choices, and, if a company allows, affordable alternative options.
While the study’s results are impressive, attributing the benefits
solely to virtual cards may be far-fetched. It seems the real benefit
comes from steering travelers to their company-approved booking
tools, which can ensure preferred options are displayed.
GoldSpring Consulting partner Neil Hammond said it’s difficult to
validate HRS’s premise without seeing the raw data and methodology.
“I’m not sure how the form of payment impacts hotel selection. I think
the availability of virtual payment and the avoidance of expense reimbursement will [motivate] travelers to use an online booking system.”
However, HRS maintained that the companies surveyed did not alter
their promotion of online booking tools following the implementation
of virtual card programs. The company also said the only change was
the addition of virtual cards to their travel programs. “While [compa-nies] certainly advised their travelers [and] travel planners that virtual
payment solutions were now in place for hotel, nothing else extraordinary was done. The [company’s] promotion [and the travelers’] awareness of OBTs stayed constant,” the HRS spokesperson said.
Could Implementing Virtual
Cards Save on Hotel Costs?
BY JOANN DELUNA
Q4 YOY CHANGE
Marriott ($157.92 in Q4)
Accor (87 euros)
2017 YOY CHANGE
Marriott ($157.12 in 2017)
Accor (89 euros)