Cendant Presents Companywide Rewards

The Cendant Hotel Group, which franchises nine midprice and economy brands, last month launched its first companywide frequent guest program, called Trip Rewards. Marriott International this summer also made news by repositioning its 20-year-old Marriott Rewards, the industry's oldest points-based loyalty program, to enable members to redeem free stays faster.

Trip Rewards was rolled out first at Wingate Inns International, the brand Cendant promotes most heavily for business travelers. During the next few months, the rollout will continue at Ramada, Days Inn and Cendant's remaining brands. "It's going to bring on new guests, which really will help drive our overall reach," said Cendant Hotel Group chairman and CEO Steven Rudnitsky, "and with over 6,000 hotels participating, we have significant distribution."

Since the brands previously had their own loyalty programs, the company is in the process of automatically enrolling these members into Trip Rewards. "Consequently, we start with 2 million active members. As the brands get absorbed into the umbrella program, their former programs go away," Rudnitsky said. By contrast, an established program such as Marriott Rewards has 18 million members.

Given how much marketing muscle Marriott Rewards, Hilton Honors and Starwood Preferred Guest have delivered to their respective companies, however, an advantage for those multi-brand companies was that travelers could earn points at midscale brands and then redeem them at upscale, upper upscale or even deluxe brands. Companies whose brands were all at about the same price point typically would be at a disadvantage. Yet, Cendant's hotel brands were able to overcome the hurdle by partnering in Trip Rewards with their sister timeshare businesses. "We're going to have redemption opportunities at over 3,700 resort properties in 100 countries," Rudnitsky said. "Access and earn-and-burn opportunities also exist at both Avis and Budget Rent-A-Car, other Cendant businesses."

Marriott Rewards' claim of allowing 30 percent faster redemption has become its core value proposition, just as no blackout dates has become synonymous with Starwood Preferred Guest and double dipping—earning both hotel points and airline miles for each stay—has become Hilton Honors' point of distinction. "Members told us that faster redemption was a key priority," said Holly Mendelson, Marriott Rewards director of marketing. They now can achieve elite-level status faster, as well as achieve bonus points for stays at most Marriott brands. "The success of any frequency program is all about providing the best value to the customer."

In a deviation from "double dipping," Hilton this summer experimented with offering its most loyal guests enhanced service in addition to points and miles, which is an approach smaller hotel companies have pursued. "Select VIP members were targeted where they could select specific benefits meant to personalize their stays," said Jeffrey Diskin, president of Hilton Honors Worldwide. "Benefits included mini-bar credits, club lounge access, complimentary breakfast or room upgrades."

Marriott Rewards has seven categories of hotel for redemption purposes. "It's not by brand any longer, but by hotel," Mendelson said. Not all limited service hotels, for example, are going to be in the same category. "A Courtyard in New York potentially is going to be a more desirable redemption location than one in a suburban area in the Midwest."

Through the economic downturn of the past two years, Drew Toth, director of sales and marketing at Starwood's Westin Rio Mar Beach Resort in Rio Grande, Puerto Rico, has seen the number of Starwood Preferred Guest bookings increase. "Growth in usage has been 17 percent this year, year over year. That's pretty substantial," he said. "When people are ready to travel, as they were this summer, they travel. Points just might provide travel options they didn't have before."

At the Ritz-Carlton Rose Hall in St. James, Jamaica, the number of guests redeeming points in Ritz-Carlton's parent program, Marriott Rewards, is up as well. Said Martin Nicholson, general manager: "Compared to guests booking regular reservations, however, Marriott Rewards stays have tended to be shorter—three to four nights versus seven nights."