We’ve seen a lot of uncertainty at Marriott lately. Last August Marriott created a single loyalty program, and then yesterday they launched the branding for the new program, known as Marriott Bonvoy.
Unfortunately this integration has been met with frustration. Marriott has had serious IT issues, and overall Starwood Preferred Guest members haven’t been very happy. When Marriott bought Starwood, they said one of the things they found attractive about the acquisition was how engaged SPG members were, though it seems much of that value has been lost.
Marriott’s CEO has called this frustration from members “noise around the edges.”
Now it’s interesting to see how other hotel groups are perceiving these changes. During yesterday’s earnings call, Hilton’s CEO said that Hilton Honors added 14 million new members in 2018, bringing their total membership to 85 million. As he explained:
“I suspect that we are benefiting by getting members of other programs that are shifting their loyalty. I can’t give you hard data on who’s come exactly from where, and, to a degree, as long as they are great customers that we can get engaged with us, we don’t care.”
Now, a roughly 20% increase in membership year over year is a lot, especially for a program that has been around for decades.
However, the reality is that we’ve seen huge increases in loyalty program memberships across the board. This is because hotel chains are increasingly doing everything they can to get you to book direct, so they can avoid paying commissions to online travel agencies.
For example, Hilton offers free Wi-Fi to guests, but only those who belong to the Hilton Honors program and who book direct, and not to non-members and those who book through third parties. So obviously this has been a huge motivator for getting people to book direct.
But across the board we’ve seen hotel executives try to suggest other reasons for why loyalty program membership numbers have been increasing. Last year Hyatt executives claimed World of Hyatt was a success because of how much more engaged it made people, and they cited all the new member sign-ups to support that. Of course the primary motivator there was actually the member only rates that they offer.
In general I’d guess that those people who are most frustrated by Marriott Bonvoy are loyal members who stay with Marriott/Starwood all the time, and not just occasional guests.
In other words, a better metric of this would be if Hilton has seen a huge spike in their elite population, rather than just new members. For that matter I do suspect they’ve seen a huge increase in Diamond members, but that has more to do with the Hilton Aspire Card than anything else.
I’ve made the case that it’s less worthwhile to be loyal to Marriott than in the past, and I’ve even found myself switching quite a few stays to Hilton Honors thanks to the excellent Hilton Aspire Card.
However, personally Hilton isn’t a group that I feel like I need to be loyal to, since they give away Diamond status so freely. But Marriott changes do make me more likely to become a hotel “free agent,” and just stay at the best hotel for a particular situation.
So while I’m happy to see the Hilton Honors membership base is increasing, personally I think Marriott Bonvoy as such has a limited impact there.
What do you think — is Marriott Bonvoy responsible for an increase in Hilton Honors members?
(Tip of the hat to @HH_Cash)