What’s the Point of Points?
Look in your wallet. If you’re like most people, you have six or seven loyalty program cards jammed in there. Seinfeld character George Costanza would be proud.
Today, businesses of all kinds—from local coffee shops and supermarkets, to car washes and movie theaters—offer points or loyalty incentives to their customers. It has become a common approach to establishing a tether between you and any number of businesses.
For hotels, loyalty programs are big business. Marriott International issued more than $1 billion in Marriott Reward points last year. And access to a loyalty program is one of the top reasons independent hoteliers consider joining a chain.
However, maintaining these programs is a considerable expense for hotel owners. According to HVS, frequent-traveler program costs at a chain property can range from 1% to more than 5% of room revenue. Based on the HVS estimates, a typical Crowne Plaza Hotel will pay nearly $180,000 a year to participate in InterContinental Hotels Group’s Priority Club loyalty program.
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