Thanks to the rise of technology in the hotel industry, this has presented challenges for small and midsized brands in some areas, whilst creating opportunities to level the playing field with major brands in others. And just as the face of the high value traveler is changing, with the baby-boomer-road-warriors starting to age out, so too is the importance of traditional hotel points programs headed towards sunset. Guests are moving away from big brand points programs as the value continues to decline, the hurdles for achieving status have become unobtainable for typical travelers and the blackout dates have become so extensive that some travelers have stopped checking to see if there is even availability.
As with the guests themselves, traditional loyalty points based programs are falling out of favor with asset owners evidenced by some forgoing participation1 as well as publicly airing their feelings on program changes and how the devaluation directly impacted hotel RevPAR2.
So the question is then…how do independent brands and hotels still use the best of what traditional loyalty programs taught us was possible, how to create lifelong high value guests, without re-creating the same costly rewards structure which will constantly need to be re-balanced to the detriment of the customer it was meant to serve?
The answer, of course, is a rewards program which creates a high level of satisfaction for the guest and high financial returns for the independent brand or hotel. And allied to the rise of soft brands and sales and marketing consortias, many independent brands have chosen membership in the Global Hotel Alliance (GHA) and use of their guest rewards and recognition platform, DISCOVERY.
What is DISCOVERY?
DISCOVERY is a global recognition and rewards program which was founded on the simple principle that the best travel experiences come from true immersion in a destination. With recognition across the 33 independent upscale and luxury hotel brands which are members of GHA, and over 500 hotels around the globe, DISCOVERY members can experience a property that truly reflects the culture and traditions of its location while enjoying all the benefits of loyalty including recognition, room upgrades, preferred rates and comfort-enhancing perks.
Since its launch in 2010 over 13 million guests have enrolled into DISCOVERY. And, as of 2017, these guests are producing $1.5 billion in room revenue for GHA’s member brands annually, including $100 million in cross-brand revenue. For reference, a “cross-brand” stay is where a member has originally enrolled in one brand and then subsequently stays at another within the DISCOVERY network. For example, a guest originally enrolls in DISCOVERY with Kempinski Hotels in Europe or Asia and then stays at an Omni Hotel when visiting the United States.
From a brand perspective, DISCOVERY is a shared recognition platform and works much like the airline alliances. Brands build their own program, Kempinski DISCOVERY, Corinthia DISCOVERY, Viceroy DISCOVERY or Outrigger DISCOVERY for example, while gaining the larger benefit of the alliance model. With the ever increasing pressure on small and mid-sized brands amidst the M&A activity, OTA dominance, and increasing complexity of distribution, GHA’s brands contribute to each other's success and help each other compete on a global scale.
“For Outrigger, the key benefit to joining GHA is the implementation of the Outrigger DISCOVERY program…The program has been a great success for Outrigger, exceeding all of our initial financial and implementation goals”
-Dan Wacksman, SVP Marketing and Distribution at Outrigger Hotels and Resorts, Nov 2017
Built with the Hotel Owner in Mind…
DISCOVERY offers GHA brands (and their hotel owners) a cost-effective and powerful recognition program, with a membership base to rival the major brands, but without the associated expense of points, free nights and other common challenges.
In contrast to big brand loyalty program, DISCOVERY is specifically designed to be an owner-friendly program, rewarding guests with Local Experiences, which have proven to be an effective way to encourage incremental business and higher average spend, at no cost to the hotel. The proprietary technology in place, co-developed with Micros (now Oracle) can track every single room night produced by DISCOVERY guests, enabling brands to closely monitor their ROI from the program.
Importantly, DISCOVERY builds loyalty to your brand, encouraging direct relationships through the brand’s website and providing invaluable guest data to assist with CRM efforts. Over 70% of cross-brand revenue that DISCOVERY produces for GHA member brands is via brand.com and other low cost channels. This is in contrast to the marketing consortia and soft brands which build brand loyalty to their brands, and maximize revenue through their own channels, rather than the hotel brand’s own direct channels.
A program for the Modern Traveler…
With a focus on core benefits which have been proven valuable to guests time and time again like early arrival, late checkout, member direct rates and upgrades, and the addition of more personalized opportunities like the choice of a local amenity upon check-in and ability to earn authentic Local Experiences for redemption, DISCOVERY gives guests a straightforward, achievable and easy to understand tier structure which they will be excited about no matter where they are traveling in the world. In fact, according to a recent Oracle study3, 78% of travelers think immediate benefits are more appealing than accumulating points.
One key to DISCOVERY’s success it’s alignment to what the modern guest wants when in a loyalty or rewards program. In the same study conducted by Oracle it was concluded that:
83% of guests indicated the ability to redeem rewards for experiences based on their preferences extremely appealing
75% of guests note a single loyalty program that can be used at a range of brands is attractive
Pioneers of Authentic Local Experiences
GHA’s initial research before forming DISCOVERY revealed that customers did not want just another points program and that travel was about sharing experiences, discovering local culture and visiting new locations. Hence, in 2010, DISCOVERY was the chosen name for the new recognition platform with Local Experiences as the global currency. And, while the ability to redeem ‘experiences’ is starting to reach ubiquity, GHA’s DISCOVERY program was one of the first to use locally inspired and curated Experiences as its primary currency and maintains leadership in the space; with the likes of Accor, Hilton, Hyatt, Marriott and Airbnb adding their redeemable versions of truly local experiences beginning in 20164,5,6,7,8.
Local Experiences Drive Engagement
With over 2,000 Local Experiences available at all times the DISCOVERY team is able to analyze guest behavior before and after redeeming their Local Experience. As shown below, redeeming a Local Experience has been proven to have an extremely positive impact on guest behavior, drive engagement and in turn create high value guests:
Creating High Value Guests:
When analyzing all DISCOVERY Rooms Nights from Q4 2016 through Q3 2017 is was shown that DISCOVERY members have a 8%-19% Higher ADR vs. non-DISCOVERY Guests depending on the type of stay; even when you include the Member Direct Rates which are a generally at a 10% discount to publicly available rates.
Driving Direct Business and Decreased Reliance on OTAs:
In addition to higher ADRs DISCOVERY has been shown to influence over 40% of repeating OTA guests to book direct or through a lower cost channel globally (over 50% in North America) on current business. Similarly, on average, over 40% of Wholesale/Tour Operator guests who enroll in DISCOVERY globally (over 50% in North America) return to the brand through a direct or lower cost channel on their next stay.
When analyzing DISCOVERY’s nearly 13million members across their current portfolio, DISCOVERY has the highest number of members per hotel compared to the big brands by this recently established metric9,10. It should also be noted that 100% of these members where enrolled via upscale or luxury independent brand hotels so their propensity to stay in upscale or luxury hotels has already been established.
Founded originally by Omni Hotels and Kempinski Hotels in 2004, with Micros Systems (now Oracle Hospitality), becoming shareholders in 2006, both the GHA and DISCOVERY are owned and managed by member brands and the technology providers used on their properties.
Through this growth the brands continue to work closely with each other through multiple global committees including an annual CEO Committee meeting, attended by all member brand CEOs, and a biannual Alliance Strategy Board comprised of brand CMOs, SVPs and VPs across Management, Sales & Marketing and Operations.
The latest initiative by member brands is to cross-sell each other’s available inventory on their own websites in non-competing markets. An example from Kempinski Hotels is below showing a sample search for London; meaning guests stay and book within the alliance brands rather than resorting to an OTA or other expensive channel to find hotels in other markets.
Looking Towards the Future:
“GHA’s mission is to be the industry leading platform supporting independent hotel groups and collections. We are at a critical point in the evolution of the independent hotel brand and it will be more important than ever for smaller brands to work together in the coming years.”
-Christopher Hartley, GHA CEO
As GHA nears its 15th anniversary it continues to look ahead at the growth of the alliance as well as the DISCOVERY platform with bold 2022 goals:
Over 25 million DISCOVERY members
50 member brands and 175,000 rooms worldwide
$4 billion in annual DISCOVERY program revenues
$350 million in annual cross-brand revenue generated
Is your brand right for DISCOVERY?
Whether you are planning to introduce a new recognition program for your brand, or considering ways to enhance an existing program, DISCOVERY provides a proven and powerful platform to encourage repeat guests and attract new guests at a low cost of acquisition; all while increasing your brand reach and marketing ROI with the ability to maintain your brand identity and independence
© Global Hotel Alliance, 2018
1Marriott Rewards Terms and Conditions (as of Sep 2018) - https://www.marriott.com/loyalty/terms/default.mi
2The history and evolution of hotel loyalty (8/2013) - http://www.hotelnewsnow.com/Articles/19965/The-history-and-evolution-of-hotel-loyalty
3The Loyalty Divide - Operator and Consumer Perspectives, Hotels 2018 (4/2018) - https://www.oracle.com/corporate/pressrelease/oic18-loyalty-divide-hotel-041118.html
4Accor (Elite Experience) - https://www.prnewswire.com/news-releases/accorhotels-group-widens-its-reward-offering-for-members-of-the-le-club-accorhotels-loyalty-programme-564765841.html
5Hilton (EXPLORE) - https://insights.ehotelier.com/global-news/2018/07/27/hilton-launches-new-platform-offering-guests-bespoke-experiences/
6Hyatt (FIND) - July 2018 - https://www.businesswire.com/news/home/20180718005202/en/Hyatt-Unveils-New-Experiences-Platform-Designed-Enhance
7Marriott (moments) - March 2018 - http://news.marriott.com/2017/03/marriott-add-100000-worldwide-travel-experiences-guests-worldwide-placepass/
8Air B&B (Experiences)- November 2016. https://www.telegraph.co.uk/travel/news/airbnb-launches-trips-tours-and-experiences-with-local-experts/
9A new metric for measuring guest loyalty programs (8/2018) - http://www.hotelsmag.com/Industry/Blogs/Details/81151
10Total Members per Hotel Chart – SEC filings, press releases
LUXURY HOTELIERS Magazine