Hyatt Hotels & Resorts last month announced it would offer complimentary Verified Identity Pass smart cards aimed to speed travelers through airport checkpoints to its Gold Passport Diamond tier members, representing the largest single purchase of Registered Traveler cards to date and the first supplier to offer complimentary membership to such a program.
This and other travel industry partnerships suggest such jointly marketed programs are poised to flourish as the Transportation Security Administration's planned June 20 nationwide Registered Traveler rollout approaches.
Steven Brill, CEO of Verified Identity Pass, told the senior travel executives at the Masters Program in Washington, D.C., last month Hyatt has purchased "tens of thousands" of memberships for the hotel chain's best customers. "Looking around the room," he said, "I'm seeing some other upcoming partnerships."
Thomas O'Toole, Hyatt senior vice president of strategy and systems, said the hotel company in the coming months will notify Gold Passport Diamond tier members—those who boast 50 Hyatt stays in a single year. Members then have a year to cash in on the one-time annual Verified Identity Pass membership. O'Toole said Hyatt would look to extend the program next year. "We can buy more and frankly we plan on doing so," O'Toole said. The cards will carry the core VIP smart card functionality, but will be co-branded with Hyatt.
Hyatt said its partnership with VIP was an exclusive among hotel companies for an unspecified, limited time—VIP said the frame was "very short"—and the chain plans to make the service available to other Hyatt guests through promotional offers later in the year. Hyatt and VIP also are in talks to set up kiosks in select Hyatt hotels where travelers can enroll in the program.
Hertz Rent-A-Car also has joined VIP as a marketing partner and already is promoting the program in Orlando, a Hertz spokesperson said. In June, when the program is expected to expand to other airports, members of Hertz's frequent-renter programs will get a free month's membership in those programs for every year they sign up with VIP, he said.
"There's a role here for corporate travel managers to understand what makes one loyalty program better than another," said Bill Connors, executive director and COO of the National Business Travel Association. "This is yet another interesting amenity that Hyatt has come up with. There will probably be others who will want to purchase these cards for top customers as a perk or loyalty program enhancement."
Travel consulting firm Management Alternatives vice president John Ohaver said such joint-marketing Registered Traveler programs would flourish like airlines rewards programs in the 1970s and 1980s.
Others also are seeking to expand the utility of such Registered Traveler smart cards. Saflink—which is working to launch a comparable Registered Traveler program with Microsoft, Expedia and others—said it is seeking partnerships with payment companies to include a credit card component on cards.
VIP's smart cards are embedded with such biometric information as fingerprints and iris scans and allow business travelers to quickly move through separate security checkpoints at participating airports
(BTN, Nov. 14, 2005). The smart card costs about $80, yet Brill said the program is open to discussions for negotiated corporate discounts.
Other travel suppliers have entered or plan to enter the Registered Traveler market. American Express said it is seeking partners and Cendant Travel Distribution Services in September 2005 announced it would offer customers of subsidiaries Orbitz for Business and Travelport an unspecified discount off VIP's smart-card fee. Brill said his company also is in discussions with nearly every major U.S. airport and is looking at partnerships with airlines to sponsor programs.
Although Expedia has partnered with Saflink and Microsoft to help develop its own product, Expedia Corporate Travel marketing manager Mitch Robinson said the deal is not exclusive and "Expedia could very well partner with Brill or others."
VIP last month also gained a new partner outside of the travel industry when General Electriccommitted to invest$16 million in Verified Identity Pass, joining othersuch stakeholders as Lockheed Martin and Lehman Brothers. Brill last month saidVIP will leverage the relationship to use such newly developed GE security products for Clear lanes as shoe scanners, which would nullify the need for removing shoes, and automatic explosive trace detectors. Brill said VIP wants to stay ahead of the curve with such emerging technologies, which have yet to be deployed at TSA checkpoints. "The reason we wanted to partner with General Electric—apart from the fact that they're General Electric—is that they recently invested heavily in homeland security," Brill said.
In addition to the Orlando pilot, VIP thus far has signed two airports—in San Jose and Indianapolis—to host Clear lanes,pending Transportation Security Administration approval. Sacramento's airport also is in discussions with VIP and other airports, including Boston's and Cincinnati's, are seeking bids for a Registered Traveler program. Brill said VIP is in discussions with airports outside of the United States, yet at the moment, "Clear is only open to U.S. travelers."
As TSA sets standards for an April 20 deadline to determine how private companies will run programs, Brill envisioned a rush among airports in the spring tosolicit vendors. Pending TSA approval, VIP said it could deploy an airport program in less than 45 days.
During the Masters Program, Brill said 16,000 members have enrolled in its Orlando program. He said the airport's Clear lane on Feb. 7 alone processed 1,000Clearmembers at an average time of 14 seconds. "Registered travelers in Orlando know it won't take more than four minutes to go through," he said.
While several groups like the Air Transport Association and the American Civil Liberties Union have come out against a Registered Traveler program, corporate travel buyers said they see value and many are even beginning to formulate policies and reimbursement plans for employees. An Association of Corporate Travel Executives survey of 150 business travel managers released last month showed 68 percent of respondents' companies would foot the cost of Registered Traveler enrollment for select travelers, in many cases based on frequency of trips. However, one-quarter of respondent's companies still were determining a reimbursement policy.
"This is in contrast to a previous ACTE survey taken 18 months ago when an overwhelming number of companies indicated that they would not reimburse for a Registered Traveler program," ACTE said.
Some corporate travel managers said rejection from such a program could raise questions about an employee's background, 84 percent said it would not. In addition, 93 percent said a traveler's decision not to apply to the Registered Traveler program would have no impact on the employee.
However, "you can literally count on one hand" applicants that have been rejected from the Orlando program following TSA's threat assessment, a VIP spokesperson said.
As TSA moves forward with setting standards on the collection of Registered Traveler data, data privacy and security concerns for the voluntary program now are on the radar of corporate travel buyers, 57 percent of respondents said.
While American Civil Liberties Union continued to steadfastly voice its opposition to the Registered Traveler program from both a security and privacy perspective, Brill—who noted he is a longtime ACLU cardholder—exuded confidence about his program's safeguards against identity theft, noting an "identity theft warranty," so that if personal information is compromised VIP would pay for it.
ACLU said the program should be scrapped altogether. Air Transport Association president and CEO Jim May, among the first to propose the Registered Traveler idea, said the focus should be on pre-screening programs such as TSA's Secure Flight, as "the process has improved significantly. Instead of having two-hour waits for airport security, we have a 10-minute wait on average through the system."