If independent hotel collections like Small Luxury Hotels of the World and its peers want to thrive, pursuing more loyalty tie-ins seems likely, but they have to be careful to stress the additional value they can bring for independent hotels. Otherwise, what's stopping independents from flocking to the hotel soft brands?
Chicago-based Hyatt Hotels Corporation, which has a global portfolio of more than 700 hotels, announced Wednesday a new loyalty alliance with London-based Small Luxury Hotels of the World (SLH) — a collection of more than 500 independent luxury hotels from around the world.
By the end of this year, World of Hyatt loyalty members can earn and redeem points for stays at participating SLH hotels when they book those stays through Hyatt channels.
Whether there are similar benefits for SLH’s Invited loyalty program members is not yet confirmed, but details of the alliance are still being worked out, a Hyatt spokesperson told Skift. For now, however, the primary focus of the partnership is to allow World of Hyatt members to earn and redeem points when they stay at select SLH hotels.
An Industry First?
Independent hotel collections such as SLH and its peers — which include brands such as Preferred Hotels & Resorts, Leading Hotels of the World, and Relais & Châteaux — are increasingly facing more challenges.
More often than not, that competition comes directly from soft brands such as Autograph Collection by Marriott, Curio Collection by Hilton, and even Hyatt’s own Unbound Collection — all of whom similarly try to attract independent hotels to their collections with the promise of helping independent hotels with sales, marketing, distribution, and access to loyalty members.
Hyatt says this loyalty alliance is a first for the industry, and a quick survey of loyalty programs from SLH’s peers seems to suggest that.
For SLH, this partnership allows it to give its independent hotel members access to Hyatt’s loyalty members and increase their bookings. For Hyatt, which is relatively smaller in comparison to its peers such as Marriott and Hilton in terms of number of hotels, this alliance gives its own loyalty members access to more luxury hotels worldwide without having to add those hotels to one of its soft brands. Or without having to buy a hotel brand, as Hyatt contemplated doing so last week with NH Hotel Group.
“We are constantly looking for ways to add value for our many independently spirited hotels. This coming alliance with World of Hyatt does just that,” said Filip Boyen, CEO of Small Luxury Hotels of the World said in a statement. “Our work together will allow World of Hyatt members to enjoy loyalty benefits across a wider choice of small independent luxury hotels. For SLH, our hotels are our brand, and we look forward to expected increased occupancy with significant exposure to the World of Hyatt program’s more than 10 million members.”
“This is another example of how Hyatt continues to listen to the wants and needs of World of Hyatt members and take meaningful action,” Mark Hoplamazian, Hyatt president and CEO, said in the same statement. “SLH’s high-end collection of boutique hotel experiences means our members will soon be able to earn and redeem World of Hyatt points in more places, including many new locations in Europe and Asia.”
During a conference call with investors to discuss second quarter earnings for Hyatt, Hoplamazian said, “In fact, more than 87 percent of locations where SLH is represented are ones in which there are no Hyatt hotels today.”
He also added, “We believe this exclusive alliance will not only enhance the value to existing World of Hyatt members but will also attract new members over time. We are targeting a launch of the alliance by the end of this year. And although Hyatt is not making a financial investment in SLH, we are investing in the integration of our loyalty programs and believe this arrangement will get significant benefits for both companies and for all Hyatt and SLH hotels overtime.”
While details of the partnership continue to be ironed out — as well as the start date for the ability to earn and redeem points — it’ll be interesting to see if, in fact, a deeper integration between SLH’s own loyalty program, Invited, and World of Hyatt materializes.
A bigger question also looms: Does a partnership like this, as it is now, cannibalize SLH’s own loyalty program? Another item for SLH member hotels to consider is how much they have to give up in order to have this loyalty connection. Are the economics of this World of Hyatt partnership the same as those for SLH’s own loyalty program?
If the SLH-Hyatt partnership proves successful, however, it could serve as a model for more alliances between relatively larger hotel companies and independent hotel collectives. It’s a way for brands like Hyatt to extend their independent hotel reach and add scale to their portfolios, as well as make their loyalty programs more attractive. And for the collections, it’s a vehicle for driving more bookings for their members.
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Photo credit: The Aleenta Resort & Spa Phuket is one of many independent hotels that are a part of Small Luxury Hotels of the World. Small Luxury Hotels of the World