Here’s what hotel loyalty programmes might look like after coronavirus
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
The coronavirus pandemic continues to severely impact the travel industry with no end yet in sight. As a result, companies and loyalty programmes have had to make significant policy adjustments to accommodate travellers, from introducing flexible change and cancellation policies to pausing points expiration and more.
With U.S. hotel occupancy rates at unprecedented lows, hotel loyalty programmes have needed to quickly find ways to keep their customers happy. Most major chains have already extended elite status expiration and offered other incentives to keep travellers engaged with their brands.
There’s certainly more that can be done to reward valued customers and attract new ones when travel resumes after the coronavirus outbreak settles down. I’ll walk you through the steps hotel loyalty programmes have already taken during the COVID-19 crisis, and discuss what more they could be doing to reengage guests when we start travelling again.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
What hotel programmes have already done during the pandemic
When travel began to dry up and hotel occupancy rates started plunging, some loyalty programmes took swift action to help travellers with existing reservations and elite status. Others, unfortunately, took their time before announcing customer-friendly initiatives like elite status extensions and flexible cancellation policies.
The major chains have extended elite status and points expiration
Hilton Honors led the way on 25 March, when the loyalty programme extended elite status and paused points expiration for all members.
The chain also extended the expiration of Hilton weekend award night certificates that come with some U.S. Hilton cobranded credit cards. Later, Hilton and Amex made these certificates even more flexible.
Soon after, World of Hyatt, Marriott Bonvoy and IHG Rewards Club followed suit with their own elite status, award night certificate and rewards expiration extensions, and reduced elite-qualifying requirements in some cases. Wyndham Rewards and Radisson Rewards also announced elite status extensions around the same time, but the last major player, Choice Privileges, didn’t make a move until 21 May — nearly two months after Hilton Honors rolled out its plan.
These early updates were a smart strategy to assuage fears of members who would not likely have earned the same level of elite status this year, especially those who travel frequently for business.
Flexible change and cancellation policies
In March 2020, the major hotel programmes introduced more flexible change and cancellation policies to assist customers with existing or future bookings. Most programmes are allowing changes or cancellations without penalty up to a certain date (including prepaid, nonrefundable rates) as long you made the booking directly with the hotel (and not a third-party site like Expedia).
Typically you’ll have to make the change or cancellation at least 24 hours before arrival, and refunds sometimes take a month or more to process. These changes have been a relief to those with nonrefundable bookings, but some readers have reported difficulty getting refunds at specific properties within a chain.
At the time of post writing, the majority of programmes are allowing free changes or cancellations through the end of May or June.
Elevated buy-points promotions
We’ve seen several programmes offer best-ever buy-points promotions, including Marriott Bonvoy, IHG Rewards and Choice Privileges. We don’t typically recommend buying points and miles unless you have a high-value redemption in mind or need to top off your account for an award, but these deals could be worth considering for some.
For example, the current Marriott Bonvoy buy-points promo offers a 60% bonus (which we’ve never seen before), bringing the purchase rate down to 0.78 cents per point.
This is a win for the hotel chains too, as it generates much-needed cash by essentially enticing travellers to pay upfront for future travel.
What hotels should be doing right now
Now that we’re a few months into the coronavirus outbreak, it’s time for hotel programmes to look at the next steps they’ll take to keep customers engaged and loyal. This includes not making or deferring negative award chart changes and extending existing promotions — especially since we’re not seeing travel bounce back just yet.
No devaluations during the crisis
World of Hyatt impressed us when it suspended planned award chart changes in light of the pandemic. Originally, the chain was slated to introduce peak and off-peak pricing and make award category changes on 22 March. In a customer-friendly move, Hyatt postponed these updates until 2021 — but unfortunately, not all hotel chains were as forward-thinking.
Meanwhile, IHG Rewards went ahead with changes during the pandemic. In 2019, the chain confirmed it was planning to introduce variable award pricing at some point, then quietly rolled out dynamic pricing in Greater China at the end of April. In a statement to TPG, the hotel group stated it would expand Reward Night redemption flexibility “more widely through the course of the year as appropriate”.
Devaluations like these (announced or not) don’t build trust with loyal customers. World of Hyatt had the right idea to pause big changes to its programme until after the pandemic abates, and other programmes should follow their customer-friendly approach.
Proactively extend change and cancellation policies
We’re now approaching the end of May, more than two months since hotel programmes began introducing flexible change and cancellation policies, so it’s time to revisit some of these deadlines.
For example, Marriott, Hilton and Hyatt have yet to extend broad change and cancellation fee waivers for bookings made beyond 30 June 2020. With travel slowly starting to open up, many travellers are starting to plan trips for later in the year. Extending these change and cancellation waivers will boost customer confidence in making bookings into the summer or fall.
Gear up for new promotions to encourage loyalty
Understandably, we haven’t seen much in the way of new hotel promotions from major programmes recently, but now is the time to ramp up again as customers begin planning future leisure and business travel.
Hilton Honors had the right idea when it extended its current Points Unlimited promotion (set to expire 31 May 2020) until 7 September 2020. In addition to offering 2,000 points per stay, this extension gives customers more time to reach the valuable threshold of an additional 10,000 bonus points after every 10 nights.
What we hope hotel programmes do moving forward
Experts agree that the return to pre-COVID norms will be gradual, with regional travel and road trips bouncing back earlier than international and business travel. Loyalty programmes will need to adjust to these new realities by finding ways to attract and retain loyal customers who may be travelling much less than before, perhaps for a very long time.
Bold promotions and bonuses
In the wake of the 2008 financial crisis, we saw airline and hotel loyalty programmes step out with big promotions to reengage programme members. For example, the former Hyatt Gold Passport loyalty programme offered an insane deal with its “Faster Free Nights” promotion — after every two eligible stays you could earn a free night at Hyatt brand hotels worldwide, as well as a 2,000-point bonus for every second stay if you paid with a Mastercard.
Starwood’s 2008 “You Choose” promo was also novel, allowing members to choose between double points, double stay credits, or milestone bonuses like a free weekend night after four stays or 25,000 points after 10 stays.
In recent years we haven’t seen anything nearly as exciting, with many promos only offering rich rewards to those who stayed a massive amount during the promotion period. Now would be a great time to revive or create promotions with lower barriers to entry for both leisure and business travellers — especially considering business travel may never bounce back to pre-COVID levels. Wouldn’t we all love to see IHG PointBreaks deals and Radisson/Club Carlson’s free night for cardholders on award stays come back, too?
Adjust elite-status qualification thresholds
With most chains extending members’ current elite status through 2021 or even into early 2022, the pressure on travellers to earn elite-qualifying nights is off — for now.
But as travel starts to bounce back, hotel programmes may be faced with a new reality — their most loyal customers, especially business travellers, likely won’t stay nearly as much. With fewer stays it will be harder to attain the coveted top-tier hotel statuses that confer valuable perks like suite upgrades and free breakfast. Elite statuses like World of Hyatt Globalist (which requires 60 nights or 100,000 base points in a year) or Marriott Bonvoy Titanium (75 nights) may seem out of reach for many, and as a result, travellers could say “why bother” and turn to other brands simply based on lowest per-night cost rather than long-term benefit.
Choice and IHG have already announced reduced elite-qualification thresholds for 2020, but these types of adjustments will only be meaningful for those trying to qualify for elite status after this year. All hotel programmes should revisit their elite status qualification requirements for 2021 and beyond.
Make elite status more rewarding
Hotel loyalty programmes have a unique opportunity here because they can offer added value to customers without taking away from other guests’ experiences. Making low and mid-tier status more rewarding would appeal to the less-frequent traveler, including those that may see a reduction in their travel for the months and years to come.
A good example is free hotel breakfast. Currently, Hilton Honors is the only major chain to offer free breakfast to mid-tier status holders (Hilton Gold, in this case. Other programmes, like World of Hyatt and Marriott Bonvoy, only offer free breakfast to upper- or top-tier elites, and some, like IHG Rewards Club, don’t include breakfast as an amenity for any elite tier.
It wouldn’t take much to include a standard free breakfast for mid-tier elites across the board, and an upgraded breakfast (perhaps by including room service or deluxe options) for top-tier elites. And if hotels are concerned about the expense, perhaps offering a small points incentive (much like not using housekeeping) to those who decline the meal would offset the additional cost.
Making other elite-like perks attainable for infrequent travellers (like waiving resort fees for all programme members) would develop loyalty as well. Evening snacks, more opportunities for room upgrades and “surprise and delight” perks like food and beverage credits are all strategies hotel programmes should explore. It would be smart for programmes to recognize the changing demographic of their average customer and align elite perks more toward leisure travellers. For instance, families would enjoy upgrades to suites with a separate room or a pizza and movie amenity.
The travel loyalty landscape has changed — and will keep changing — as the long-term effects of the coronavirus pandemic on travel remain to be seen. Hotel loyalty programmes have already reacted swiftly with positive changes to cancellation policies and elite status expiration, and there’s more to be done.
We’d love to see hotel programmes take a more proactive approach to loyalty as people begin to travel again. From offering exciting promotions to reimagining paths to elite status, the opportunities are there to reengage old customers and create new ones.
Featured photo by Samantha Rosen/The Points Guy.
Welcome to The Points Guy!