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Property incentive to honor elite status

Property incentive to honor elite status

Old Dec 14, 20, 2:00 pm
  #1  
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Question Property incentive to honor elite status

I suppose this doesn't just go for Marriott properties, but does anyone know what incentives properties have for welcoming elite members?

I've been platinum/titanium with Marriott for years now, and the one thing I've noticed is that my treatment really various across properties (seems to be backed up by threads on FT too). I realize there are is a set of things the property must do based on what corporate has set, but what for everything else? Do they get any benefits for welcoming elite members over regular members? Do we count more towards increasing their category? Or are they purely doing it for the chance of an elite review?

Thanks!
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Old Dec 14, 20, 2:23 pm
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The stuff you ask for is proprietary. I always wondered why some hotels in AME and even EU were SUPER excited to have a platinum checking in at their hotel v. North America where they read the script taped to the desk "thank you for being a loyal platinum member mr. _____". But it turns out there is some award given to properties when they have high tier members book award stays, particularly when house (occupancy) is above a certain amount. This was revealed in a lawsuit between Starwood (Rest in Power) and one of its properties. Here's a good place to start
https://loyaltylobby.com/2013/03/08/...-palm-springs/

https://loyaltylobby.com/2013/01/09/...-due-to-fraud/

The point I make is that hotels honor platinum status as an incentive to get platinums to stay at their hotel. That's the only incentive that exists, other than maybe an audit from the chain but maybe someone else knows more about that
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Old Dec 15, 20, 12:10 am
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This is a great question/post. Been a plat/titanium for 10+ years and have always wondered.
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Old Dec 15, 20, 5:43 pm
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As cur notes, some of this gets into proprietary information. But, as someone who worked in hotels for over a decade, I'll provide my thoughts. My career included various jobs at the Front Desk and Reservations/Revenue Management. As such, I dealt directly with how elite-level frequent guests were "welcomed" and potentially upgraded.

(These are my views based on my experience. I did not work in a Marriott property, but all hotels in the city where I worked generally operated in the same manner. Still, I'm not trying to speak to how every hotel handles this issue. Nor am I saying that there weren't many situations where that normally happened wasn't thrown out the window due to extenuating circumstances.)

Incentives: In terms of handling elite-level guests, it's more about the stick than the carrot. If a hotel doesn't honor the basic requirements as listed under the franchise agreement (which mirror what guests see in the Terms and Conditions of the frequent guest program), they might be penalized. All hotel groups conduct an annual review of their franchises. Adhering to brand standards like handling elite-level guests will be part of that review. If a hotel has too many negative marks, they risk de-flagging. But, it takes a LOT of problems for that to happen.

Personally, I've never heard of any hotel group offering positive incentives to hotels for treat elite-level guests like royalty. With the exception of some health and safety issue, hotel groups tend to let their franchises run their properties as they see fit.

It's worth noting that there have been some reports here at FlyerTalk over the years about some hotel groups telling their franchises that they shouldn't be providing extra perks to elite-level frequent guests. I believe the thought process behind this concept is to create uniformity across the experience within a certain area or country. For example, the hotel group doesn't want the guest to get a full breakfast (more than what's required) at hotel A and only a continental breakfast at hotel B because it makes hotel B look bad even though they are following the rules.

The Primary Customer (for the Hotel Group): One thing to remember is that primary customer for the hotel group isn't guest. The main business of the hotel group is selling their brands to hotel owners. The guest (frequent or not) isn't nearly as important as those hotel owners. As such, it's in the best interest of the hotel group to keep their franchisees happy. One easy way to do that is to avoid micro-managing the franchises.

It's worth noting that each individual franchise is a separate business. By design, many aspects of the individual hotel are walled off from the hotel group. Even though each franchise uses proprietary software provided by the hotel group, no one at the hotel group has unrestricted access. Even if they wanted to, no one in the chain's Customer Service office can look at the billing system or the way upgrades are distributed at an individual hotel. That fact means the hotel group can't really audit how individual hotels hand out elite-level upgrades.

The Best Customer (for the Hotel): Here is the inconvenient truth that most FlyerTalkers don't like to hear. The best customer of an individual hotel is not the elite-level frequent guest. The best customer at a hotel is going to be the company/group/organization that provides the most room nights (and other income) annually.

It's really a numbers game. At best, an individual can provide 365 room nights for a hotel. A local company might provide thousands or even tens of thousands of room nights annually. As such, it's in the best interest of the hotel to prioritize that company's guests over an elite-level frequent guest.

For example, I used to work in a hotel where 40 to 50% of our room revenue came from one company. That meant that our most important customer was the person responsible for negotiating that corporate contract. For all the years I worked at that hotel, I never remember that person every spending the night.

Hotel groups understand this fact. They purposely word the Terms and Conditions of their frequent guest programs to give franchises flexibility in terms of upgrades. All the programs specify that upgrades are based on availability at the time of check-in. So, a smart franchise will set up procedures to upgrade their most important corporate clients the day before or the morning of arrival. Additionally, any repeat frequent guests of that hotel might also get pre-upgraded. Then, the rest of the elite-level frequent guests will get whatever's left over when they arrive.
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Old Dec 16, 20, 7:57 am
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Originally Posted by cur View Post
The stuff you ask for is proprietary. I always wondered why some hotels in AME and even EU were SUPER excited to have a platinum checking in at their hotel v. North America where they read the script taped to the desk "thank you for being a loyal platinum member mr. _____". But it turns out there is some award given to properties when they have high tier members book award stays, particularly when house (occupancy) is above a certain amount. This was revealed in a lawsuit between Starwood (Rest in Power) and one of its properties.
You're talking about a country that tries to make customers feel important when ordering a cheeseburger at a fast food chain where employees have to sing a similar tune.

The lawsuit of SPG vs Parker Meridien had very little to do with elite members but with fraud. Hotels can claim rack rate value from the loyalty program when the property is sold out near capacity and Parker "cooked the books" making fake reservations in order to reach these levels more often, therefore defrauding SPG.
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Old Dec 16, 20, 8:04 am
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Originally Posted by Zeteg View Post
I suppose this doesn't just go for Marriott properties, but does anyone know what incentives properties have for welcoming elite members?

I've been platinum/titanium with Marriott for years now, and the one thing I've noticed is that my treatment really various across properties (seems to be backed up by threads on FT too). I realize there are is a set of things the property must do based on what corporate has set, but what for everything else? Do they get any benefits for welcoming elite members over regular members? Do we count more towards increasing their category? Or are they purely doing it for the chance of an elite review?

Thanks!
Depends on the program and their loyalty contracts with the hotel. Welcoming elite guests and giving them preferential treatment is more or less priced into the franchise and loyalty fees a property pays to Marriott/Marriott Rewards/World of Hyatt etc.

Then there are individual reimbursements for redemptions such as free nights by points, certificates, upgrade awards... Just welcoming a Platinum member, providing lounge, breakfast and an open suite upgrade is baked into the franchise fees. Cost of doing business.

The real VIP's are those who bring the big bucks to the hotel and might not even have any status. The GM/RM takes care of these guys separately.
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Old Dec 16, 20, 10:03 am
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Personally I more curious about how Bonvoy reimburse property for SNA usage.

As most of the time I will book the base room and manage to SNA myself to the thousand dollar/night suites
(Gritti Serenissima Suite, Schloss Fuschl Castle Suite for example)
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Old Dec 16, 20, 10:44 am
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Originally Posted by writerguyfl View Post
...It's worth noting that there have been some reports here at FlyerTalk over the years about some hotel groups telling their franchises that they shouldn't be providing extra perks to elite-level frequent guests.
I've read some of those, but assumed that they were based on what the poster was told by local hotel management. ("Marriott told us not to..."). In other words an accurate post of what property management told the poster, but not definitive as to whether local management was being truthful or simply putting the blame where it didn't belong, when denying a benefit or extra perk.
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Old Dec 16, 20, 11:23 am
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Originally Posted by kaizen7 View Post
Personally I more curious about how Bonvoy reimburse property for SNA usage.
Funnily, I asked a property that I have a good relationship with about this yesterday. They said there is renumeration for eliteís breakfast amenity is 50% or up to a certain amount, an SNA (varying amount) and for award stays itís a capped amount unless the property is at 95%+ capacity. Iím not sure what is true there, and I suspect there operations manger should not have really been sharing that with me.
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Old Dec 16, 20, 11:50 am
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Originally Posted by writerguyfl View Post
As cur notes, some of this gets into proprietary information. But, as someone who worked in hotels for over a decade, I'll provide my thoughts. My career included various jobs at the Front Desk and Reservations/Revenue Management. As such, I dealt directly with how elite-level frequent guests were "welcomed" and potentially upgraded.

(These are my views based on my experience. I did not work in a Marriott property, but all hotels in the city where I worked generally operated in the same manner. Still, I'm not trying to speak to how every hotel handles this issue. Nor am I saying that there weren't many situations where that normally happened wasn't thrown out the window due to extenuating circumstances.)

Incentives: In terms of handling elite-level guests, it's more about the stick than the carrot. If a hotel doesn't honor the basic requirements as listed under the franchise agreement (which mirror what guests see in the Terms and Conditions of the frequent guest program), they might be penalized. All hotel groups conduct an annual review of their franchises. Adhering to brand standards like handling elite-level guests will be part of that review. If a hotel has too many negative marks, they risk de-flagging. But, it takes a LOT of problems for that to happen.

Personally, I've never heard of any hotel group offering positive incentives to hotels for treat elite-level guests like royalty. With the exception of some health and safety issue, hotel groups tend to let their franchises run their properties as they see fit.

It's worth noting that there have been some reports here at FlyerTalk over the years about some hotel groups telling their franchises that they shouldn't be providing extra perks to elite-level frequent guests. I believe the thought process behind this concept is to create uniformity across the experience within a certain area or country. For example, the hotel group doesn't want the guest to get a full breakfast (more than what's required) at hotel A and only a continental breakfast at hotel B because it makes hotel B look bad even though they are following the rules.

The Primary Customer (for the Hotel Group): One thing to remember is that primary customer for the hotel group isn't guest. The main business of the hotel group is selling their brands to hotel owners. The guest (frequent or not) isn't nearly as important as those hotel owners. As such, it's in the best interest of the hotel group to keep their franchisees happy. One easy way to do that is to avoid micro-managing the franchises.

It's worth noting that each individual franchise is a separate business. By design, many aspects of the individual hotel are walled off from the hotel group. Even though each franchise uses proprietary software provided by the hotel group, no one at the hotel group has unrestricted access. Even if they wanted to, no one in the chain's Customer Service office can look at the billing system or the way upgrades are distributed at an individual hotel. That fact means the hotel group can't really audit how individual hotels hand out elite-level upgrades.

The Best Customer (for the Hotel): Here is the inconvenient truth that most FlyerTalkers don't like to hear. The best customer of an individual hotel is not the elite-level frequent guest. The best customer at a hotel is going to be the company/group/organization that provides the most room nights (and other income) annually.

It's really a numbers game. At best, an individual can provide 365 room nights for a hotel. A local company might provide thousands or even tens of thousands of room nights annually. As such, it's in the best interest of the hotel to prioritize that company's guests over an elite-level frequent guest.

For example, I used to work in a hotel where 40 to 50% of our room revenue came from one company. That meant that our most important customer was the person responsible for negotiating that corporate contract. For all the years I worked at that hotel, I never remember that person every spending the night.

Hotel groups understand this fact. They purposely word the Terms and Conditions of their frequent guest programs to give franchises flexibility in terms of upgrades. All the programs specify that upgrades are based on availability at the time of check-in. So, a smart franchise will set up procedures to upgrade their most important corporate clients the day before or the morning of arrival. Additionally, any repeat frequent guests of that hotel might also get pre-upgraded. Then, the rest of the elite-level frequent guests will get whatever's left over when they arrive.
That is all very true, although from speaking to a few GM's of higher end properties over the years they generally have less ability to rely on the large group bookings and actually they made great efforts to treat Elites very well as they understood if the reputation of the hotel was they would always do what they could and go the extra mile for said guests that would actually bring in very large amounts of business, combined with the fact that a bad reputation would work the other way and suddenly Bonvoy was a negative to them as essentially hotels sign up to a group as a way of marketing themselves and if they were not attracted the percentage of guests via the program it became a negative cost to the hotel rather than a revenue generator.

I know specifically at one very luxury property that they love redemptions as its the only way they can make money from their lower to mid tier rooms, as the clientel that actually pay for the hotel generally would never consider anything below their 4th cat of room, this I assume is unusual rather than usual but I did find it very interesting.

So while each Elite guest (Titanium and above say) may only have the ability to stay 365 nights a year, combine those elites and know that they do research before staying and actually they are a very valueable asset to certain sectors of Bonvoy hotels, but to others they are more a inconvenience.
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Old Dec 16, 20, 3:48 pm
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Originally Posted by UKTraveller4Fun View Post

I know specifically at one very luxury property that they love redemptions as its the only way they can make money from their lower to mid tier rooms, as the clientel that actually pay for the hotel generally would never consider anything below their 4th cat of room, this I assume is unusual rather than usual but I did find it very interesting.
Nice problem to have!
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Old Dec 17, 20, 1:07 am
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I would think that many properties know that how they treat high level elites is likely to be reflected in hotel reviews on the Marriott website and others such as TripAdvisor. I know that I am much more likely to give a good review to a hotel that treats me especially well and/or upgrades me.
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Old Dec 17, 20, 4:12 am
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Originally Posted by UKTraveller4Fun View Post
So while each Elite guest (Titanium and above say) may only have the ability to stay 365 nights a year, combine those elites and know that they do research before staying and actually they are a very valueable asset to certain sectors of Bonvoy hotels, but to others they are more a inconvenience.
I concur. The type of hotel, location, and demand is going to matter a lot in terms of how important elite-level guests are to an individual hotel. I fortunate to work at hotels that were located in prime locations. I will readily admit that I might have a completely different mindset if I had spent a decade working in a limited-service hotel located on an outparcel of a dying shopping mall.

Of Note: Day of the week mattered a lot in terms of how elite-level guests were treated. We typically sold out multiple nights during non-holiday business weeks. As such, elite-level guests were typically disappointed in terms of upgrades during the work week. Upgrades were plentiful on weekends (including Sundays).
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Old Dec 17, 20, 9:19 am
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Originally Posted by writerguyfl View Post
It's really a numbers game. At best, an individual can provide 365 room nights for a hotel. A local company might provide thousands or even tens of thousands of room nights annually. As such, it's in the best interest of the hotel to prioritize that company's guests over an elite-level frequent guest.
While I agree a local company might provide many more room nights each year, one thing this statement doesn't account for is word of mouth. If someone gets upset that they're not treated well, they will tell their friends, family, and possibly someone with the company providing thousands of room nights or more.
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Old Dec 17, 20, 4:19 pm
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I've watched this discussion with interest and would throw in my view that it is more based around "karma"... treating one individual elite guest well is unlikely to be cost effective, but a general pattern of good treatment will lead to the following, all of which generally will lead to returning guests and therefore increased revenue:
  • Influencers: Top elite guests are more likely to be influencers in their respective corporations or family/friend circles, influencing where others stay. Good treatment makes it more likely you'd recommend a specific hotel, which leads to small but probably noticeable uplifts in occupancy over time. I certainly dictate where (pre-COVID) my team stays on projects and (even in COVID) friends ask my advice for good hotels since I tend to spend 75+ nights in them a year
  • Pricing: An elite has booked directly with the hotel, either through the Marriott website or a corporate travel agency. As such the hotel gets more of my revenue (the booking channel taking 10% of revenue rather than 30%+ from OTAs). I am likely to have paid more per room, hence move up the upgrade priority list. I may use my corporate rate to feel I am getting a discount (often 10-15% only), but I am also fairly price inelastic, as long as the hotel is less than my city cap. I'm (hopefully) a profitable guest, even after the hotel pays for my extra elite services.
  • Rankings: It leads to generally better scores on the Marriott random surveys and other sites such as tripadvisor, though I feel this is more stick per writerguyfl's very insightful comments (based on the responses I get when I give negative scores on the Marriott surveys, or the staff who now ask for a score of 10, there is clearly some internal KPI or metric on satisfaction that means my opinion manners)
  • Incremental spend: As an elite I am probably more likely to expect freebies (lounge, breakfast) but I suppose over time I am more likely to consume other services such as laundry, room service, on average, and particularly if I am in a good mood in my suite
  • Differentiation: Many large cities have multiple Marriott properties close by, whilst location, price and brand naturally differentiates to a degree, so does service. How does a Marriott attract guests over the JW Marriott across the street, except through service (and of course price). It is also easier to upgrade someone staying one night ("maybe tomorrow I will sell that suite....") than others, and are elites more likely to spend 1 night? Perhaps (I certainly am, few of my trips last over 4 nights)
  • Uniqueness: I am lucky enough to have now lived in Asia for over 5 years, where elite guests tend to be treated far better, likely as we are much rarer. Whilst I appreciate in NYC or Hawaii arguably half the hotel is Gold or above (and potentially driven by credit card spending), in Mainland China in a random city as a Titanium I am probably in a very small minority, and culturally there is an inclination towards better treatment. To keep my status of 75nights/year (ignoring that I'm lifetime) means that I have to actively seek out Marriott properties and put in "nights in a bed", which may cluster in fewer cities and (except Greater China) where there may only be 5 cities with Marriott properties in an entire country.
  • Practical: Like an airline hotels oversell their cheap rooms, often I suspect the upgrade is more about balancing supply and demand, and then if you have to use a suite it makes more sense to give it to an elite guest, which may mean more future revenue, rather than a random where you may not even have their contact details if they book through a discounted booking site
Ultimately I presume most hotels are aware that the power of the Marriott branding is that it drives deeper loyalty and regular returning stayers, driven almost entirely by the Bonvoy programme. Hotels are part of the scheme, and pay the fees, as it drives them more traffic, and yes random holidaymakers may choose to stay at a Marriott brand over a random independent hotel, but they really want people like me who go directly to the Marriott website (or apply that filter on my corporate travel system) to book their trip and are less price sensitive. They want the person who may stay 10 times a year to have a good experience and return, and arguably have a better experience than the person who may vacation once at this hotel. I don't know if the stats are in a Marriott corporate report, but I'd always presumed elites staying more than 20 nights a year would probably drive 30%+ revenue in the Marriott system, and once you get to Titanium or Ambassador you probably have 3% of the population driving 10% of your overall revenue (speculation, I presume someone has the stats somewhere where they've been published). Quoting from the Marriott corporate report in 2018:

Originally Posted by Marriott
Our Loyalty Program is a low cost and high impact vehicle for our revenue generation efforts. It rewards members with points toward free hotel stays, experiences and other benefits, or miles with participating airline programs. We believe that our Loyalty Program generates substantial repeat business that might otherwise go to competing hotels. In 2018, Loyalty Program members purchased approximately 50 percent of our room nights. We continually enhance our Loyalty Program offerings and strategically market to this large and growing guest base to generate revenue. See the “Loyalty Program” caption in Footnote 2. Summary of Significant Accounting Policies for more information.
So yes, for one individual it doesn't make sense, but overall it leads to the returning guests, which takes revenue away from the competition.
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