Starwood Launches Salvo of Promotions to Retain Elite Customers

With competitors nipping at its heels and an anxious pool of loyalty customers, Starwood set forth a raft of promotions this month in an effort to curb any attrition in its user base.

Members of Starwood's Preferred Guest  (SPG) program have been receiving a range of promotional emails starting two weeks back offering everything from accelerated elite status to generous point bonuses on nightly stays. Promotions have been targeted, offering a different set of perks to different cohorts while some members haven't been pitched at all — leading to speculation and grousing in online forums.

"Truly abysmal and woeful fail from SPG marketing", complained one member on Flyertalk who didn't get a promotional email. "Just when it would be logical for them to be inclusive and to encourage EVERYONE to stay, they come up with a targeted promotion, excluding many long term members and then exacerbate a lousy decision by doing it again a week later. Hyatt's looking better by the day,"

Indeed, Starwood's efforts come at a critical point in time as many in its loyalty program consider defecting to other operators. Though Preferred Guest isn't ranked highly in J.D Power's recent generalist loyalty program rankings, its strong range of transfer partners plus a well regarded co-brand credit card have earned it a cult-like following among business travelers, many of whom are a strong source of revenue for the hotel chain.

Part of the promotional effort also likely has to do with Starwood's need to retain customers throughout the merger of Marriott and Starwood's loyalty programs. Last week, the hotels announced that they wouldn't integrate the programs until 2018, leaving more than a year for loyalty members to potentially defect to other operators.

Because of that year-long purgatory, it's thus likely that Starwood and Marriott will continue to heavily lean on promotions in an effort to retain loyal customers and keep the wheels greased. This month's promotion has the Starwood off to a good start — as more details of the merged operators come together, expect the incentives for for loyalty members to continue.