Hilton Wants to Attract More Low-Tier Loyalty Members
Joe Cortez August 22, 2019
Although top-tier loyalty members often make up the most business for any hotel, its the Silver and Gold members that Hilton wants to see more. During an investor call, the hotel giant’s chief executive officer said they have plans to attract more low-tier members to their properties.
How do you determine the worth of a loyalty program’s base and silver members? By how much they stay with any given hotel chain’s properties. And Hilton Honors wants to see a lot more of them at their affiliated hotels. Travel Weekly reports company president and CEO Chris Nassetta is setting his sights on getting more activity from lower-tier members.
Hilton Honors currently has 94 million members around the world in their program, reflecting an increase of over 20% compared to last year. The hotel chain has boosted this number in many different ways, from advertising campaigns featuring Hollywood stars to offering incentives to hotel owners who sign up new members. And while more high-tier elite members are staying more at Hilton properties, it’s the lower-tier members that could make up more of their business.
“The more that can be a direct source of business rather than indirect, obviously it adds to our RevPAR [revenue per available room] premiums,” Nassetta told the call, according to Travel Weekly. “And it does so in an incrementally efficient way in terms of distribution costs.”
Overall, around 50% of Hilton Honors members are actively engaged in the hotel rewards program—and more Gold and Diamond members are choosing to make Hilton their primary hotel chain. The hotel company credits the increase in part on their partnerships with Amazon and Lyft. However, Nassetta and company are focusing in on Blue and Silver members in the program to improve their bottom line.
“You will continue to see more of this [engagement] from us, both for higher-level members and lower-level members,” Nassetta told the call, as quoted by Travel Weekly. “I think really what it’s focused on is getting greater engagement from our customer base and having more direct relationships.”
As part of its growth plan, Hilton is focused on growing its luxury footprint. In July, the company announced they will open three new luxury hotels this year and a total of 25 additional properties through 2025.
[Featured Image: Hilton]
@Long Zhiren, Well up until about 18 months ago I was able to secure a room at the Hilton Doubletree SFO for 20,000 points and another time not that much prior for $107. I booked directly with Hilton in both cases. I like to use hotels near SFO airport if I am flying trans-Pacific the next day. But I guess that idea has gone out the window -- and I'm not giving up 50,000+ points for one night. What are we supposed to do make millions annually to stay near a major airport ?? Not everyone works for Google or Amazon or billion dollar corporations. Talk about being prejudicial - does Hilton care that people on the lower end of the working scale (gasp), minorities, can't afford those rates ????
upintheair3: Bon Voy has been a gigantic devaluation from Marriott Rewards. Until Dec 2018, I had Marriott Platinum because of UA Platinum. That's been devalued to Bon Voy Gold. Marriott Rewards Gold used to bring you lounge access and breakfast. No more with Bon Voy. My Marriott lifetime status and being elite for over a decade...worth nothing now. Just spent $1700 for a 5 nights at Marriott downtown Chicago. Marriott perks? None. With Hilton, I still had a good deal in Venice, Italy a few months ago. Be careful what you wish for.
Flying None: $700 is a good deal in downtown SF. Try staying 35 miles away in Sunnyvale at $400+ a night at a Courtyard. Yep. Category 8, on par with Venice, Italy or Maui resort. ha! With none of the glamour. SF Bay Area is Google-land with business people paying big $$$. It's more expensive than Hong Kong hotels. Airport location deals? You're kidding right? You might get 30% off on weekends in the SF area though.
Hilton needs to do a better job providing perks to their Elite members first. Have been a Diamond member for 5 years (already qualified for Diamond next year) however the perks for an Elite member aren't impressive. What is most irksome is Diamond and Gold, they almost treat as the same. I decided to try Bon Voy. Was given Gold immediately since I was UAL 1K. Completed a 16 stay challenge to attain Platinum and appreciate the more you stay the more rewards you get. Unlike Hilton, once I hit 30 stays (60 nights) i get same perks as someone how has 90 stays for upgrades etc. Between Hilton and Marriott I have 138 nights, 88 of those Bon Voy and have found the Bon Voy program much more rewarding.
Essentially, they are getting too much business from OTA. They want these people to book directly with Hilton. If they do this then they do not have to commission to an OTA and make more money. Most of these people are highly price sensitive, however, and do not care about elite status or benefits. If you only stay 2-3 times in a hotel per year, why would you? They could offer more perks if you book directly with the hotel besides a slight discount.