Nikko Loyalty Program Promises Room Availability

<B> Nikko Loyalty Program Promises Room Availability</B>

By Maria P. Vallejo

<I>Tokyo, Japan</I> - Nikko Hotels International this month will launch a North American frequent guest history program to guarantee its members room availability, while the chain forges ahead with plans to double its size by 2001.

The new guest program, scheduled to start the middle of this month, will replace a vacancy left two years ago when Nikko dissolved its original program. The new Royal Fountain Frequent Guest Program will have an invitation-only membership and be available only at Nikko's North American properties.

"The main purpose is not to get more people, but to appreciate the frequent guests' patronage of the hotels," said Eikon Ito, vice president and assistant general manager. "We want to recognize our repeat and loyal guests."

The key to success for the new program, Nikko executives believe, lies in its exclusive membership. The earlier program offered similar members-only amenities and services, including a dedicated toll-free reservation line and guaranteed rooms, but could not accommodate the large response rate. Royal Fountain initially will invite 2,500 frequent guests to join, and thereafter will invite an additional 1,500 per month. Company officials expect a 5 to 10 percent response rate, which would generate 5,000 to 6,000 members in all.

Along with the expected upgrades and discounts associated with any frequency program, members are guaranteed room availability at all North American properties with a two-day advance booking--a service many corporate travelers consider ideal as occupancies climb in the major cities where Nikko hotels are found.

Nikko's Los Angeles, New York and San Francisco properties rely on corporate transient travelers and meetings for as much as 85 percent of their business, said Kazunobu Takita, vice president of operations for the Americas and Europe.

Company officials expect the frequency program and the addition of four new hotels--expected in Atlanta, Chicago, Vancouver and Washington, D.C.--to help push that corporate business even higher.

At the property level, each Nikko hotel is expected to reserve a block of rooms to accommodate last minute reservation requests. But while members of the Royal Fountain program are guaranteed rooms, they are not guaranteed specific rooms or room types. Last-minute callers may not receive the suite or non-smoking room they ask for, for example--but they will find an empty bed.

There will be a minimum number of days members must book or be excluded from the program, and blackout days will apply to the offer.

Potential members will be chosen based on a list of criteria currently under consideration. In preparation for this launch, Nikko already has about 2 million guest profiles captured over the past four years, which reside in a central database. Information is shared by the properties in real time, and will be used to identify Royal Fountain members at the time of their reservation to expedite recognition upon arrival.

Meanwhile, buyers were excited by the prospect of guaranteed room reservations for their travelers, though wary of repeating past negative experiences.

Connie Chambers, corporate travel coordinator for New Line Cinema, New York, for example, said she often had difficulties working with the frequent guest programs, and attributed the discrepancies in service to a lack of defined criteria for members. "I just wanted to know where the privilege came in," she said. "I want to know what the criteria are."

As a travel coordinator, she is "confronted continuously with occupancy problems," she said, and often has "to find myself a sales manager before getting help."

In addition to growing its frequency program, Nikko also is hoping to grow the size of its chain internationally, to 100 hotels by 2001. It is targeting gateway cities worldwide, and had planned to focus on Asia, though now the chain is waiting for the Asian financial crisis to subside, Takita said. He noted interest in China, Malaysia, Singapore and Thailand.

For now, though, a Nikko property will open in Hanoi, Vietnam, by the end of the summer.