Ritzy loyalty plan aims at recession-hit clients

Frequent travellers, make way for one more piece of plastic in your wallet.

The Ritz-Carlton Hotel Company has just bowed to the logic that the luxury customer isn’t immune to the attraction of getting something for free. After years of insisting that their customers are not interested in earning free toasters, the hotel chain has succumbed to the lure of the loyalty programme.

Its luxury frequent guest stay programme, The Ritz-Carlton Rewards, went live on Wednesday, prompted by customer feedback and demand for a scheme that delivers something rather more than complimentary stays and airline flights, the company said.

Besides free nights at the hotel’s properties, what you get, then, are private itineraries from bespoke travel suppliers Abercrombie and Kent, workshops with National Geographic photographers, private shopping activities at Nieman Marcus and fashion and homeware from fashion label Vera Wang.

“No other luxury hotel company comes close to providing such a full range of opportunities to earn and redeem points and experience some truly exceptional and exotic adventures,” said Herve Humler, president and chief operating officer, The Ritz-Carlton Hotel Company.

“This is just the beginning. We will continue to add global partners offering our members the very best in customised and one-of-a-kind memorable experiences,” he added.

Programme members earn 10 points or two airline miles per dollar spent on the room rate at the Ritz-Carlton hotels and can redeem points for stays at any of the brands owned by its parent company, Marriott International, including JW Marriott Hotels and Resorts and Renaissance Hotels and Resorts – some 3,300 properties worldwide. An elite tier level comes into force once guests stay more than 10 nights per year with the brand.

Customers in Dubai – and around the world – will also be able to earn and redeem these points through Emirates Airline’s Skywards programme.

Vivienne Gan, Regional Director of Public Relations, Middle East, said the launch came after almost a decade of carefully studying loyalty programmes around the world.

"This programme was not launched due to the recession; if we were, we would have done it two years ago,” she told Emirates24|7. “Now that the desire to travel for business or pleasure is showing signs of improvement, we consider The Ritz-Carlton Rewards, which offer unique luxury experiences, to be timely not only because our customers have asked for a guest loyalty programme, but said they wanted more than points."

If National Geographic photography workshops are too ambitious for you, a 20-night stay at a $300-a-night Ritz-Carlton room would earn one or two nights at most other same-brand hotels, or 10 nights at many Fairfield Inns.

Being part of the Marriott group is what allows the brand to operate a loyalty programme, setting it apart from such other players in the same category as Four Seasons Hotels and Resorts. Loyalty programmes are expensive to run and administer, and really only make sense for a company when volumes are high. Given that the Ritz-Carlton only has 73 of the Marriott’s total of nearly 3,300, it makes sense to leverage group synergies without taking on significantly high costs.

The programme is also expected to deliver significant benefits from rewards for the MICE industry, where a separate rewards system is in place for meetings planners and event organisers.

Deliverables

Asked if the firm expected the programme to be a factor in guests’ choice of brand when booking, Gan simply said: “Yes”.

Indeed, Humler believes the programme can bump up occupancy at the chain by two to three percentage points, the Wall Street Journal reported. Occupancy at the brand’s hotels has in recent months begun to approach pre-recession levels, but room rates are still a fair way off from boomtime highs. The average cost of a room at the chain in the second quarter was $297 (Dh1,091), down 19 per cent from $353 in 2008 – but up from the 2009 average of $280.76.

The recession has already prompted the hotel industry to make several changes, such as offering free meals or discount vouchers, and upgrading their product to factor in new technologies and guest demands.

But the launch has been the talk of the travel industry this week. “You know the recession is bad when for The Ritz-Carlton launches a loyalty progamme for the first time,” one hotel industry insider said.

Credit card

It is likely that the next step for the brand will be a credit card, along the lines of the Marriott’s Chase Manhattan Bank co-branded cards, which awards a free night’s stay upon approval, bonus points after the first purchase and purchase-lined points after that.

Several other hotel chains also have co-branded cards, including Starwood, Hilton and Taj. Hyatt announced its first card this month.

With such cards, hotels typically receive a percentage of the transaction fee that merchants must pay issuing banks, while the banks are able to attract greater customer numbers on the back of the hotel brand.