Should Lodging Companies Form Alliances Similar to Airlines?

Photograph ©istockphoto.com by ene.

In the Comments section of this article here at The Gate pertaining to whether or not you should attain elite status in greater than one frequent travel loyalty program, FlyerTalk member sdsearch states that “…there is hardly any such thing as hotel alliances (it’s not like you can get half of your Hilton HHonors benefits staying at Marriott or half of your Hyatt benefits staying at SPG).”

That prompted me to think: should lodging companies form alliances similar to airlines? What if Hilton Worldwide formed an alliance with Hyatt Hotels and Resorts, for example, where members of each frequent guest loyalty program could earn and use points for stays at hotel properties in both portfolios of Hyatt and Hilton?

Speaking of Hyatt, you might consider its recent partnership with MGM Resorts International as a hotel alliance, as members of both the Hyatt Gold Passport and M life frequent guest loyalty programs now enjoy reciprocal benefits.

Another example of an alliance of hotel companies is the Global Hotel Alliance, which launched the GHA Discovery frequent travel loyalty program back in 2010. However, this is really more of a collection of luxury hotels and resorts sharing the same frequent guest loyalty program rather than an alliance.

Even car rental companies are getting into the alliance act. Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car have recently formed something called the Drive Alliance, where it appears that reciprocal benefits between all three frequent renter loyalty programs will be enjoyed by members.

Then again, it certainly does not hurt that all three rental car companies are owned by the same company known as Enterprise Holdings — so the only question I have about this “alliance” is why it was not launched sooner.

Did you know that there are actually only three major rental car companies serving the United States after Hertz Global Holdings acquired Dollar Thrifty Automotive Group in 2012? Perhaps Hertz Global Holdings and Avis Budget Group should follow the lead of Enterprise Holdings and form their own “alliances” between the rental car companies in their respective portfolios — but I digress.

The three major airline alliances — oneworld, Star Alliance and SkyTeam — all offer various forms of reciprocal benefits amongst members their respective members, such as upgrades, the earning and redeeming of frequent flier loyalty program miles, and airport lounge access. The alliances were supposed to be designed to give member airlines the instant ability to offer additional destinations worldwide to their customers without having to operate any additional aircraft or increase flight frequencies; differentiate themselves from the competition; and offer a “seamless” experience for customers traveling on international itineraries — amongst other reasons.

Unfortunately, the reciprocal benefits are not always consistent — an understatement, I suppose, as there are far too many discussions on FlyerTalk to highlight as evidence — and there are those who argue that perhaps the days of airline alliances are numbered, as witnessed by the erosion of certain reciprocal benefits between Korean Airlines and Delta Air Lines in the SkyTeam alliance…

…which prompts the question, whether or not it could ever happen: do you believe that lodging companies which offer frequent guest loyalty programs should consider forming alliances? Would customers benefit from such alliances?

What are your thoughts?

Comments (Showing 11 of 11)

  • gobluetwo at 6:42am August 28, 2013

    I never understood why Avis/Budget and Hertz/Dollar did not offer reciprocal benefits to the brands within their own portfolios. It’s annoying having Avis status and no recognition from Budget.

    As for hotel alliances, I could see that in theory, although it would have to be an alliance with minimal overlap in market (be it geography, target demographics, or something else).

    I have to say, as a United elite, I do enjoy the reciprocal Marriott benefits I’m currently receiving.

  • u07ch at 9:52am August 28, 2013

    As franchises they really are already alliances; BA own their planes IHG doesnt own their hotels.

  • rwllr at 10:38am August 28, 2013

    Like u07ch said they already are alliances as they are given they’re franchises.

  • heffa at 10:38am August 28, 2013

    Hotel chains seems not to form alliances, but buying up hotels and hotel chains. Marriott has for instance 17 different brands. Amazing! Hilton has 10.

  • kcmo57 at 10:46am August 28, 2013

    I wonder what it means that the gentlemen pictured in the story’s illustrative photo are shaking left hands?

    • Brian Cohen at 1:46pm August 28, 2013

      You know, kcmo57 — I knew something looked funny about that photograph!

      I can promise you that I did not touch it at all — I simply purchased it and used it.

      Perhaps I should have flipped the photograph horizontally?

  • sdsearch at 12:26pm August 28, 2013

    One of the main purposes of airline alliances is to cover the world better. Although there are exceptions to this (like UA and US both in *A), usually the different airlines in a given alliance don’t overlap their geographical coverage all that much.

    So in that sense, a better hotel example would be if Hilton, despite no longer having Scandic in its program (like it did for a few years), made a reciprocal agreement with Scandic (which now has its own program). When Hilton split with Scandic, HHonors members got status in Scandic, that has dropped yearly since. But since Scandic isn’t anywhere near where I am most of the time (with a few exceptions, it mostly covers Scandinavia), and in its program I can’t earn anything I can use where I live (in the USA), it’s been a useless program to me since its split from HHonors. But if Hilton HHonors (which has barely any footprint in Scandinavia) set up an alliance with Scandic, then I might actually stay at Scandic again when in Scandinavia.

    There are lots of hotel chains which cover only their own section of the world, and many of them have their own programs, but without worldwide hotel alliances, it makes little sense for someone from far away, who only visits that part of the world once in a while, to join all those programs.

    So I think it would make more sense if regional hotel programs made allainces (or global ones filled in their footprint by allying with regional ones), rather than two global hotel programs making an alliance with each other.

    • Brian Cohen at 1:47pm August 28, 2013

      This is an excellent follow-up to the question I posed — inspired by you, sdsearch. Thank you!

  • pcfdt at 6:57pm August 28, 2013

    The only hotel alliances that would make sense are regional chains (e.g. Red Lion on the West Coast of the US, Delta Hotels of Canada, Electra in Greece*) that cannot form an international presence or doesn’t have plans to develop one in the near future.

    Even then, I find it doubtful as an alliance would form because hotels have to find a partner with the relatively similar niche clientele (e.g. business travelers looking for a 4-star, leisure travelers, etc).

    * – Had to use the internet to find regional chains, because I tend to stick with my preferred hotel brands.

  • oshkrozz at 12:09pm August 29, 2013

    As others have mentioned hotels brand names are the alliance like Marriott doesn’t own every Marriott property they franchise the name and then have local operators in the hotel with minimum requirements depending on the sub brand.

    It already covers the globe and hotels will partner with premium brand or local hotels from time to time for one reason or another. (Marriott and Rtiz Carlton are partners under the Marriott Brand).

    The only place an alliance would help would be for small B&B to band together and many times these small hotels do form some sort of alliance when it makes sense.

  • businesstraveller2 at 8:30am August 31, 2013

    Hilton Hhonors is huge with all the Embassy Suite, Homewood Suites, Doubletree, Hampton Inn, etc. properties I often am able to find a Hilton property in a city that I am visiting including overseas. This is much less true for e.g. Starwood – one of the chains where I have a corporate rate. Also regarding cars, I recenty rented a car in Stockholm through National (but it was Europe Car) and did not get any points/credit with National for the rental.

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