Taj and Shangri-La have allied their loyalty programmes under the name Warmer Welcomes programme.
The move comes as loyalty programmes are being increasingly used as leverage to drive direct bookings, with Marriott International’s takeover of Starwood Hotels & Resorts motivated by the increased loyalty scale.
The two Asian hotel companies will see a combined reach across 200 hotels, 27 countries and 131 destinations, with Warmer Welcomes launching in March next year. The pair said that loyalty members would enjoy “reciprocal and seamless benefits at a scale never seen before under a hospitality alliance”.
The programmes will share 6 million members, with top-tier statuses matching across the schemes. Members of either programme will now be able to earn award points in their preferred programme while staying with Taj or Shangri-La and will be able to convert points to redeem awards between both programmes.
Shangri-La’s acting president Madhu Rao said: “As hotel owner-operators who share similar values and service philosophies but have minimal overlap of properties, Taj and Shangri-La are in a unique position to establish a seamless alliance that goes beyond a marketing partnership or multi-hotel distribution platform.
“As hotel owner-operators who share similar values and service philosophies but have minimal overlap of properties, Taj and Shangri-La are in a unique position to establish a seamless alliance that goes beyond a marketing partnership or multi-hotel distribution platform.
“Our alliance bridges two iconic Asian brands and opens up a world of new experiences for our loyal guests. We will be able to enhance brand awareness and increase market share by providing Golden Circle and Taj InnerCircle members more value and more reasons to stay with us.”
The Hong Kong-based chain operates more than 95 hotels under the Shangri-La, Kerry, Hotel Jen and Traders brands, in Asia Pacific, the Middle East, Europe, North America and the Indian Ocean. Taj Hotels Resorts and Palaces comprising 100 hotels in 63 destinations across the globe, including presence in India, North America, United Kingdom, Africa, Middle East, Malaysia, Sri Lanka, Maldives, Bhutan and Nepal.
Rakesh Sarna, MD & CEO Taj Hotels Resorts & Palaces said: “This is a strategic step in bringing greater synergies amongst two brands known for their legendary hospitality. Over time, our valued guests and loyalty members had shared their desire for a wider selection of world class hotels in key destinations. This alliance will help drive deeper engagement for our most valuable guests and members as they will now be recognised seamlessly at some of the world’s finest hotels across multiple geographies.”
Alexandra Zubko, general manager & co-founder, Triptease, told us: “Firstly, with the growing power and influence of online travel agents, hotel brands are looking for more relevance with consumers. Broadening their portfolio geographically makes a hotel brand more attractive for global business and leisure travellers.
“Secondly, more interconnected communities means more travellers for whom combinations of regional brands really resonates. Finally, with ever-advancing technologies and a general shift in mentality amongst hotels and hoteliers means they’re more open to think creatively. This can include combinations with other hotels or hoteliers who they might have previously considered as competitors. Moving to the cloud in the tech stack furthers creates more flexibility in partnerships, for example loyalty programmes.
“With that being said, I don’t think we’ll see a huge wave of hotel link ups. The bigger hotel brands already have global portfolios, and the amount of internal work a partnership like this takes probably wouldn’t be worth it for them.
“What I’d be interested to see is what kinds of linkups that could occur not just geographically, such as the Shangri-la/Taj link up, but a linkup in terms of brand positioning within a region.”
The end of last year saw Shangri-La celebrate five years of its loyalty programme. It launched five new benefits, including multiple room earning, which allows members to earns points on up to three rooms when travelling with family members or business associates. It also allowed members to dine out on awards points at all managed restaurants and outlets worldwide.
In addition, it launched The Table by Golden Circle, a food and beverage loyalty programme. This rewards members through redemptions and access to “signature food experiences, exclusive events, unique surprises and special offers”. It includes Instant Dining Rewards, which allows members to earn and redeem Golden Circle award points on the spot – no pre-planning or vouchers required.
The agreement has shades of the Global Hotel Alliance’s Discovery programme, which includes 34 luxury brands, including Kempinski, Anantara and Viceroy.
In a presentation at Hotel Analyst’s Hotel Distribution Event, Andrew Boshoff, head of strategy & development, told delegates that the key reasons why loyalty programmes failed were: not enough hotels, rewards being difficult to redeem or earn, poor data collection, commoditised rewards which had no emotional engagement and member transactions being too rare, a curse in particular of resort brands.
At the GHA, the Discovery programme rewards include a private tour of the Sheikh of Ajman’s Arabian horse stables and an underwater wine tasting in the Maldives, alongside what is now industry standard: free Wi-Fi and room upgrades. The programme is currently at 8 million members, and includes 550 hotels.
Boshoff said that the execution of a loyalty programme required “more resources and better technology than a frequency programme – but the prize should be a programme that builds a brand rather than merely promotes a channel”.
HA Perspective [by Katherine Doggrell]: This year’s watchword, other than ‘post-Referendum’ is set to be scale. The first act after Marriott International acquired Starwood Hotels & Resorts was to bolt the latter’s 21 million rewards members onto its 54 million and then rejoice at the lack of crossover between the two – only 16% of its combined loyalty members belonged to both companies’ schemes.
This was as much as shock to Arne Sorenson and his team as the rest of us, who had been under the impression that everyone was a member everywhere, with a wallet of cards being applied wherever the customer happens to wash up. It appears that there is still hope for what we traditionally call ‘loyalty’.
So, while it still has meaning and is not merely a route to a discounted room, Taj and Shangri-La have announced their partnership, quick to point out that there is little overlap in location, a classic scale play.
As attendees of Whitbread’s capital market day were told, the company has no plans to get into loyalty, although the more lucrative business traveller may soon enjoy something that looks a little similar. For the brands which compete on price, giveaways hold no interest. But as Boshoff told those at HDE, when you operate at the higher, Taj, Shangri-La end of the market, harnessing the power of the elite members becomes lucrative.
The GHA reported the Elite tiers – 6% of members – delivered 34% of revenues. It also reported successful cross-brand activity, driving around 6% of total revenues – higher for resorts. The drive to direct through using loyalty programmes has been much criticised this year, largely because owners are facing a bill for the discounted rates being offered as sweeteners. Taj and Shangri-La have, as yet, made no moves to discount, but are instead offering what the wealthy cannot pay for – experience. And points into dinner never hurts.