Hotels Up The Frequency Ante

<B> Hotels Up The Frequency Ante</B>

By Maria P. Vallejo

Travel managers should keep a keen eye on compliance with preferred vendors as newly improved hotel frequency programs provide more powerful lures for travelers.

Hotel companies are targeting business travelers with frequent guest programs, touting more benefits and reduced requirements for rewards redemption. While this may put a smile on frequent travelers' faces, it can make business travel buyers, who have preferred vendor arrangements with other hotel companies, wince.

Some companies that recently changed or implemented new programs include Bass Hotels & Resorts, Best Western, Choice International, Hilton Hotels Corp. and Starwood Hotels & Resorts.

But even without the upgraded offers, travel management experts said that ensuring usage of preferred properties is the hardest component for travel managers to control. Recalling her six-year experience managing the Coopers & Lybrand's hotel program, consultant Jo Ann Baynes said, "People were going outside of the preferred program because they were members of a frequent guest program. We often had people stay at a certain hotel because of its point program. It was a negative thing for our hotel program."

Baynes, who is now president of Uversa International in Fairfax, Va., left Coopers & Lybrand in 1997.

To prevent travelers from being lured outside of corporate travel policy by frequent traveler programs, she said, travel managers need to scrutinize their travelers' hotel portfolios, using charge card and travel agency data, and note any change in traffic from one preferred chain to another.

Charge card data is the better source here, she suggested, because not all hotel data is captured by agencies and some frequent guest programs reward travelers for booking directly with a property instead of through the preferred corporate agency.

Still, hospitality industry insiders acknowledged, winning the battle for travelers' loyalty is easier said than done. "Because of hotels' accounting systems and their inability to provide folios interfere with travel managers' ability to audit their travelers, the frequent guest factor becomes a behavior they cannot control," said Rolfe Shellenberger, senior consultant at Runzheimer International of Rochester, Wis. "People violate policy. The difficulty for travel managers is having reliable information. The source of information to determine the value of hotels is frayed. It's flawed."

If movement away from preferred vendors is detected, corporate travel managers will need to get higher-level support to assure compliance. Shellenberger said travel managers rarely go that far on the hotel side, as they usually pay more attention to air and car spending.

Still, frequent guest programs are not all bad news. Corporations can use frequent guest programs to their own benefit if their preferred vendors are among the chains improving their frequency programs. "There is an opportunity for travelers to take advantage of more benefits," said Gerard Smith, vice president of procurement at The T&E Group in Newport Beach, Calif. "If it's an enhanced program, it benefits the travelers, and if not at an additional cost, the aggregate doesn't matter."

With that in mind, some companies are working with their hotel partners to roll out programs to travelers together. Members of Starwood's Global Preference Program automatically are enrolled in Starwood's Preferred Guest program, for example.

With more than 600 hotels in 70 countries and 500,000 new members signed up since its launch in February, Starwood's frequent guest program has perhaps the greatest scope. It has no blackout dates, demands only an average of three stays or $1,000 spend to redeem a free weekend night, offers online redemption of points, and has a 1:1 ratio of Starpoints and airline carrier points. About 9,000 new members join daily, said Starwood CEO Juergen Bartels.

Choice International also is winning over travelers, signing up more than 200,000 members since its launch in October, said director of database and frequency marketing Cynthia Slavin. The Guest Privileges program offers members more than 2,200 hotels from which to earn and redeem their points.

Travel managers in search of benefits to pass on to their travelers can use the program to improve traveler amenities and services. Members receive express checkin, complimentary room upgrades, free local phone calls, incoming faxes and newspaper, and a special toll-free telephone number for expedited reservations.

Still, the program largely was designed for, and has attracted, individual business travelers. "In the midprice market, travel agents and travel managers are important for us, but we have a lot of individuals making their own reservations," Slavin said.

Meanwhile, Bass Hotels & Resorts is trying to reach out to international and higher-tier travelers by expanding its loyalty program earlier this month to include all Inter-Continental properties. Inter-Continental has brought 135 hotels and resorts to Bass' Priority Club Worldwide program, which already included Crowne Plaza, Holiday Inn and Staybridge Suites.

Additionally, Bass enhanced its Priority Club Web site mid-month to allow members to make reservations, check account information and point balance, amend point discrepancies and view a six-month summary of their accounts.

Hilton Hotels Corp. revamped its Hilton HHonors program to allow guests to exchange hotel points for airline miles and vice versa. Further enhancing the program, it offers Double Dip Earnings, allowing members to earn HHonors points and airline mileage with each stay.

One company that is maintaining its original frequent guest program is Swiss-&ocirc;tel. Club Swiss Gold, launched in 1997, has about 12,500 members. Unlike many programs, Club Swiss Gold has an invitation-only membership based on the number of room nights and total revenue spent.

Swiss&ocirc;tel does not plan to grow its membership unless its total number of guests increases significantly. "It's quality, not quantity, so the objective is not to grow it," said senior vice president Chris Riga.