Travel brands haven't innovated much when it comes to reward redemption. So kudos to Wyndham for gambling on something new. But their new auctions aren't without risk to the company.
On Wednesday U.S.-based Wyndham Hotel Group attempts to inject a fresh twist into its loyalty program.
Wyndham says that its auction platform puts a fresh spin on loyalty redemption. Not a trial, the optional auction platform is launching with apparent confidence it will be a success with program members.
The portal is managed by third-party tech vendor Maritz Motivation Solutions.
As usual, guests can earn points on stays at any of 16 brands, including Days Inn, Howard Johnson, Super 8, and Travelodge.
When it comes time to redeem the points for rewards, members can compete in multiple auctions.
Typical items to bid on include a chance to see musician Jennifer Lopez’s ongoing show in Las Vegas or family passes to attractions and theme parks like Six Flags and Legoland.
Members may bid on multiple auctions at the same time, set maximum bids, and track the history of their bids to assess the effectiveness of their bidding strategies.
Starting bids range from 3,000 to 10,000 Wyndham Rewards points and rise by increments of 500 points.
When multiple people bid on the same reward, users are notified and given a chance to outbid others by offering to redeem even more points in exchange for the reward.
Exhibit A: The starting bid for a two-night getaway for two at Wyndham Grand Clearwater Beach, with a dolphin watching tour included, is 6,000 points. Obviously, competitive bidding likely means that the final amount some people redeem will be much higher than that.
Auctions will run approximately tow to three weeks a piece. After an auction ends, the platform notifies the winner by email.
Part of Wyndham’s bet on auctions is that its properties tend to be in the midscale and economy segments, which, in turn, tend to appeal to a demographic more accustomed on average to participating in eBay-style auctions for retail and other goods.
Wyndham is not the first travel brand to experiment with auctions.
In 2015, Spanish airline Iberia began offering discounts on last-minute travel, typically in flight-plus-hotel packages, via auctions where the airline posts the retail price but customers can bid for less than that amount. Iberia’s auctions continue today, but other airlines haven’t rushed to copy the concept.
Of course, the name-your-own-price auction service of U.S. online travel brand Priceline pioneered the concept in the late 1990s, though not for the redemption of loyalty programs. Wyndham believes it is the first travel brand to bring auctions to a hotel reward program.
Wyndham faces risks at two extremes with its auctions: Will its marketing team be able to inspire the necessary participation that ensures that an auction is fun?
On the other hand, will they avoid drawing too many users? The company has to strike the right balance to make sure its most valuable customers — its repeat guests — aren’t spending time “playing” its new system and then getting frustrated because they never “win” anything.
Regardless of the outcome, the effort will be watched closely by the industry, given that Wyndham is the country’s largest hotel company, with 8,200 properties worldwide, not counting its acquisition of the AmericInn brand (announced this month but yet to close).
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Photo Credit: Wyndham Rewards is debuting auctions in which members of the loyalty program can bid on stays at places like the Wyndham Grand Clearwater Beach or for experiences like Jennifer Lopez's running show at Planet Hollywood in Las Vegas. Wyndham Hotel Group