Hilton’s CEO Thinks They’ve Benefited From Marriott Bonvoy

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.

Bottom line

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)

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Andrew Doyle Guest

I am HH Diamond about to tick over to Lifetime Diamond. I live outside the US, so I've done it the hard way. 3 years of my life in Hilton Hotels (actually Hilton has made the 3 years really wonderful). A function of 25 years in the sky. Hilton have had me by the "proverbials" due to their respect for me as a good customer. So I love every stay (hmmm, well there's been the odd one, but they have fixed it). Also have Marriott Vacation Club (MVC) in Phuket, for 15 years. It's been great, but I am just a regular "walk-in" there. But it is still AMAZING. The SPG/MR merger has left me OK. I feel sorry for those who have been screwed as I value my status in hotels and airlines (Solitaire PPS in SIA and Platinum in MAS). Now that my HH Diamond Lifetime is in the bag, I went to the MVC pitch when in Phuket for my week (timeshare). The pitch "Spend USD10k and get Platinum upgrade for as long as you are in the programme"....(oh, did I mention that you also have to spend another $1000 a year). So they are; 1) Diluting the value of the status 2) Diluting the value of my MVC ownership 3) Making rewards nights harder to get (like airlines have been doing for years) Now, my HH membership (which did get degraded when Blackstone took over) has still been exceptional. I have NEVER had a reward night not available (but the points are more at peak times...as are the dollars). I, more often than not, get upgraded to a suite. I ALWAYS get breakfast. And, I always get those small things sorted easily & quickly. They are the things that make your trip work. I mentioned that I am MR also. Platinum now, but mostly just Silver over the years with a spattering of Gold. The small things, always good. Upgrades? Huh, what is an upgrade? MVC is a separate company (now) from Marriott. That's a problem. I bought another week on the secondary market (not through Marriott) and they treat that like the Herpes week. They don't even want to touch it....despite the $1200 a year I have been paying for 5 years. My assessment, Hilton is killing it. If I was in Marriott/SPG as my primary, I'd be looking to Hilton in a heartbeat.

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Azamaraal Diamond

Bonvoy is a complete disaster. July I was Marriott Gold, then Platinum for a day Jul 18, then back to Gold. BONMARPG has refused to discuss the issue and claims someone is working on it (since September/October/November. Was awarded two SPG AMEX free 35000 points nights for spend and new renewal. BONMARPG took them away for some reason unknown to anyone and impossible to track. They've been working on this since December. No results or even a reasonable response. Charged my account 35000 instead of the award. Points still not being properly credited. As an HH Diamond can you see any scenario where I would consider staying with Bonvoy? Unfortunately all those new Aspire and status match Diamonds are competing for limited reward and upgrade space so we loyal Honors members will be the eventual losers in all of this. Unfortunately living outside the US means no Aspire Card possible.

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Kent Guest

And a parting shot, I am not warm over Chris Nasseta either. Hilton can be good, but it is getting more spotty.

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Kent Guest

Arne buys SPG, don't you get the feeling that he hates SPG'ers? He has called us "Rabid" nothing short of having rabies. Now he calls us noise around the edges. What a completely disrespectful man. I don't need to ask if anyone else feels this way as I can see it in the many comments. Was China buying SPG the better choice?

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Boukhabrine mohamed amine Guest

Hello I m a ambassador member in bonvoy last year 1 I made 112 night but also become a hilton diamond member now hilton ofer a statut match via his web site actualy i m very happy with hilton who offer much benifite in point and better offer than marriott for sure this merger profite to hilton last year hope to see the reaction of mariott i. Futures

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