Leading Hotels is taking a traditional, yet also somewhat contrarian approach to hotel loyalty — but will it pay off for its independent hotel members?
Luxury independent hotel collection, Leading Hotels of the World, is the latest hospitality brand to revamp its loyalty program for guests.
Leading Hotels, which includes more than 400 hotels in more than 80 countries worldwide, on Wednesday debuted a newly revamped Leaders Club. The new program is now points-based, and has more redemption flexibility in terms of availability and room categories than its previous iteration. It also includes upgrade priority upon arrival, and will retain the program’s perks of daily continental breakfast for two, early check-in, late check-out, free Wi-Fi, and members-only sales and rates. One confirmed pre-arrival upgrade is included after the first paid stay. “Insider experiences” offered by the individual hotels are also available.
Unlike most hotel loyalty programs which are generally free to join, the new Leaders Club program charges an annual fee of $175. It also has two tiers: Leaders Club and Leaders Club Sterling. After joining and paying the membership fee, a member earns 1 Leaders Club point per dollar spent, and free nights start at 4,000 points.
“We see Leaders Club as more of a membership program,” said Shannon Knapp, vice president and chief marketing officer for Leading Hotels of the World. The annual fee, Knapp explained, “reduces churn” and ensures a “highly engaged base.”
The membership fee also helps to fund the program so that hotel members of Leading Hotels don’t have to pay 5 percent of their folio to fund loyalty.
After a member spends $5,000 on qualifying stays, she is invited to join Leaders Club Sterling. Membership in this tier includes five pre-arrival upgrades per year, and a one-time 5 percent annual renewal points bonus on her qualifying annual spend in the previous membership year.
At the time of launch, there is no co-branded credit card for the Leaders Club program, but Knapp didn’t rule out the potential possibility of adding one later down the line.
A Competitive Edge?
The new Leading Hotels loyalty program is debuting nearly two months after rival independent hotel collection, Small Luxury Hotels of the World (SLH), announced its new loyalty alliance with Hyatt Hotels & Resorts.
When asked If Leading Hotels would consider forming a similar partnership to that between Hyatt and Small Luxury Hotels of the World, Knapp said, ““At this point, no. We have committed to a different approach to acquisition [of loyalty members] which focuses on finding the right guests for our uncommon collection of hotels.”
The partnership between Hyatt and Small Luxury Hotels of the World raises questions about how much SLH member hotels will have to give up for the loyalty connection to Hyatt and the potential to drive more bookings for its member hotels. It also highlights the increasing competition that collections like SLH and Leading Hotels face — not only from one another, but from the larger hotel management companies like Hyatt and others, which compete for independent hoteliers with their own “soft brand” collections, such as the Unbound Collection by Hyatt, or the Autograph Collection from Marriott.
For Leading Hotels, Knapp said the primary motivation behind launching a new version of the Leaders Club program was driven by the accumulation of better customer data and insights, but also making sure that the new program would take into account what members actually want. Even if the new program doesn’t necessarily increase the club’s membership numbers, she hopes that the improved benefits result in better experiences for guests and the creation of genuine loyalty between guests and Leading Hotels.
Knapp said that Leading Hotels recently invested in and built its own proprietary data and marketing technology infrastructure to gather and use data about its guests to better understand its guests and their preferences.
“For us, it’s more of a club than a frequent guest program and or hoteliers know our members well,” Knapp said. “Our focus isn’t on having a huge amount of scale, or building the biggest data base that we can. It’s more focused on the customer and what the Leading Hotels of the World offers. It’s not for everybody, but that’s OK.”
However, at a time when major brands continue to get larger, and the luxury hospitality landscape, in particular, becomes even more crowded, it’s worth wondering if a more exclusive membership club model that prefers quality over quantity, like Leaders Club, will be successful.
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Photo credit: Royal Mansour Marrakech is a member of Leading Hotels of the World, which has just revamped its loyalty program. Leading Hotels of the World