Meliá Hotels International has claimed a first in the hotel sector by selling gift cards loaded with loyalty points on Amazon.
The operator joins other hotels in using Amazon, as the sector has sought to attract more users to its loyalty schemes.
Meliá will sell accommodation and experiences through the e-commerce website by offering two types of Meliarewards gift cards – one worth 35,000 points and the other worth 55,000 points.
Gift cards will be available for sale in the UK, Spain, France, Italy and Germany and can be exchanged for stays at any of Melia’s hotels, along with other services offered by the group and its partners across airlines, car rental, leisure, retail and financial services, among others.
Meliarewards members will also be able to exchange points they’ve earned for Amazon gift vouchers.
While Meliá was the first hotel to sell points on Amazon, other operators have turned their attention to the market place.
Hilton Worldwide told us that, although it did not sell Hilton Honors gift cards on Amazon Hilton Honors was the first-ever guest loyalty programme to participate in Amazon Shop with Points which gives Hilton Honors members the ability to pay for purchases “of just about anything at amazon.com” using their Hilton Honors Points. This is only available through Amazon.com at the moment, so while UK customers can use it, they would need to pay international shipping fees.
Up to three Honors accounts can be linked to one Amazon account. According to Amazon, 500 Hilton Honors Points will equal one dollar on Amazon.com. Honors members earn 10 Base Points for every US dollar spent on room rate and other eligible room charges, including telephone calls and room service.
Mark Weinstein, Hilton’s SVP & global head, customer engagement, loyalty and partnerships, said: “At Hilton, we are always looking for ways to deliver unique experiences to customers. By teaming up with Amazon, we are able to offer our Hilton Honors members yet another choice in how they redeem their Hilton Honors Points. Amazon Shop with Points gives our members greater flexibility with their Points and the chance to offer more of what matters most to our Hilton Honors members.”
Magnuson Hotels also launched its rewards programme with the offer of a USD25 Amazon gift card for every 10 nights booked direct. said that the offer was aimed at capturing and converting guests visiting on bookings made via OTAs. The company said that, until the end of the year, guests that register directly at a participating hotel during their visit would get all the nights from that stay as credit, even if the booking was made via an OTA. Those members would just need to book direct in future to redeem the Amazon.com gift card.
A year and a half since the launch, Tom Magnuson, CEO, told Hotel Analyst: “It’s going really, really well, the statistic which has surprised us the most is that 20% of our users are active users, which tells us that it’s working. The big loyalty schemes talk about how many members they have, but how many of them are active is the most important metric.
“The reason why it’s taken off is because it’s so simple and straightforward. There are no blackouts or restrictions. The other side is that the owners are liking it – so much of our growth is through conversions and according to CBRE 27% of franchisers revenues are derived from loyalty schemes. They are very expensive for owners to support. The whole point of loyalty schemes is to go direct and offset the OTAs, but that means that the average hotel spend 5% of their GRR on loyalty schemes. Simplicity and transparency is why our scheme has taken off.
“We’re also starting to see a lot of non-leisure travellers using us. The corporate traveller spends the year building their points so that they can take their family somewhere sunny, but then it comes to the point and they are left broken-hearted because they can’t get what they want. This scheme is much more simple.”
HA Perspective [by Katherine Doggrell]: In this age of experience over ownership, it is surprising how hard it is to buy someone a holiday and give them all those Instagrammable moments their ‘phone is itching to share.
The big operators do offer the chance to buy gift cards, which can be used on both stays and on food and experiences one on the property, but Meliá has become the first of the hotel groups to almost offer the ability to buy rooms through Amazon.
Amazon has thus far been used as an incentive, but is now creeping towards what would be its third – or fourth, we forget – attempt to sell holidays and hotel rooms on its platform. At the moment, working with loyalty points means that Meliá is retaining control of the product, with the consumer booking direct and not being distracted by other hotels. Should Amazon start listing hotels, consumers will be able to buy rooms with Amazon gift cards and the familiar questions of commissions and rankings will have to be addressed with a whole newish platform. Amazon is a ‘when not if’. Operators would be wise to make like Meliá and start building that relationship now.
Additional comment [by Andrew Sangster]: Amazon has been playing around the edges of the hotel industry for years. Four years ago there was a market rumour that the e-commerce giant was about to launch a booking service. But in the end, nothing much, apart from a few special offers, appeared on the site.
Travel is not a business that Amazon will ignore forever. And when it does decide to make a move, it is likely to be big. In the grocery market, the acquisition of Whole Foods by Amazon devastated the share prices of incumbents. You can expect similar disruption when Amazon makes its play in the travel business. The guessing game is about where and when not if.
The airline industry is fairly well insulated, both by government regulation and by effective monopolies on most routes. Unless Amazon wants to start its own airline, it is hard to see how it is going to seriously disrupt the retailing of air travel.
Similarly, car rental is more about the used car business than it is the provision of car transportation. The big players generate their profits through smart buying and selling of cars, rather than renting them to consumers. Amazon is unlikely to be interested in entering such an oddly structured industry.
Accommodation, however, is a potentially huge prize. Online sales are now of sufficient scale to truly excite Amazon where it can deploy its massive data warehouse of consumer insight. Jeff Bezos is going to lean across his desk at some point and say: “Alexa, buy me a travel company” and most likely it will be in the accommodation space.