Skift Take

Hotel chains and tours and activities are converging again as Shangri-La Hotels & Resorts and Klook strike a partnership. The deal, following Marriott International’s stake in PlacePass last year, has its potential pitfalls but the upside could be huge for both parties if they can make it go smoothly.

One is exclusive, the other inclusive. Jet set versus young set, legacy versus cutting edge. Shangri-La and Klook may seem to be strange bedfellows but their partnership of a hotel company and a tours booking outfit announced Wednesday shows their objectives are not incompatible.

Both want to reach out to new customers, Shangri-La the younger affluent clientele, Klook the luxury market. Shangri-La wants its Golden Circle members to earn and burn more points and, after adding merchandise from bathrobes to iPhones to the redemption list, sees tours and activities as the next big thing, which it is.

Klook constantly wants to expand not just its user base but the number and quality of offerings, which Shangri-La hotels, with its CHI, The Spa network, over 500 restaurants and other attractions, provide, said its chief revenue officer Anita Ngai.

The partnership also creates new revenue streams for both parties,

How does it work

Shangri-La guests can book Klook experiences throughout their stay, even at the last minute, at the concierge desk via a tablet uploaded with a Klook app that has been tailored for the chain. The booking is redeemed via a QR code or an e-voucher. Now available at Shangri-La hotels in Singapore, Bangkok and Hong Kong, the Klook Concierge will be rolled out to the chain’s over 100 Shangri-La, Kerry, Jen and Traders hotels in 76 destinations globally next year.

The bill for the tour or activity will be included in the guest’s total check upon checkout. Golden Circle members will earn points for each booking made through the Klook Concierge.

Shangri-La is effectively selling Klook’s tours and activities and earns a cut. But the chain’s vice president of loyalty partner and marketing, Wee Kee Ng, told Skift this revenue is “secondary” to his chief goal of increasing the share of redemption, even if it’s by just 5 percent. Members typically redeem free nights, upgrades, dining at Shangri-La hotels but increasingly want “personal experiences beyond the hotel product,” Ng said. And a loyalty program that isn’t engaging for them is one that isn’t working, he added.

Ng isn’t worried if a Shangri-La guest ends up booking a cooking class at a competitor hotel at the Klook Concierge instead of at a Shangri-La, saying “we are now focusing on the customer, not on what we have,” emphasizing a shift within the group towards being customer-centric than chain-centric.

The collaboration also sees Shangri-La hotels going beyond selling rooms to curating new experiences to be offered on the Klook platform for anyone to buy. Thus, a customer can buy a Dine Like A Royal experience at Shangri-La Kowloon, comprising dinner in the presidential suite featuring the hotel’s specialty cuisines, or enjoy a champagne sunset on the balcony of a suite at Shangri-La Dubai which overlooks the Burj Khalifa, the world’s tallest building, without staying at the hotel.

It’s a way for the chain to gain new Golden Circle customers, as each booking earns points, and to showcase a Shangri-La hotel to new clients, Ng said. The potential revenue is not bad either. The dining package, for instance, costs $602 for two persons and is for a minimum of four persons maximum eight.

These unique experiences aren’t available for Golden Circle members to redeem. However, Golden Circle members can redeem points for Klook experiences across Asia, and worldwide by Q3 2019, which will include over 60,000 tours, must-eats and attractions.

Let them eat cake

Klook’s Ngai said Shangri-La and Klook are “totally aligned on one thing — serving customers,” with their discussions in the past six months focusing on areas such as “what kind of activities should we show, what’s the user flow, are there customer service issues?”, rather than on the commercial aspects of the deal.

This reflects the issues that may arise when the partnership kicks in. What if the wrong experience is served up to a Shangri-La or a Klook guest? Will concierges be co-operative if the tips for making restaurant or attraction reservations — or indeed their role — are diminished? Can Shangri-La get the buy-in from not just concierges but the hotels to join the program?

Ngai said: “Apart from our customer focus alignment, another reason we teamed up with Shangri-La is that they own and operate most of their hotels, unlike other chains that have become asset light. This makes the execution a lot easier.”

According to Ngai, Klook visited each of the three pilot hotels in Singapore, Bangkok and Hong Kong to do direct training for concierges and hold sessions with the management of each property.

“The concierges are consumer-facing, so we need to train and get them familiar with us and our flow. As well, in the past, the concierge may have 30 to 40 activities, suddenly the portfolio they offer is much richer.

“The management also needs to understand how many activities are booked per day, how the staff are running them, since the hotel is making income from this. The hotels are keen to make sure the best service is provided to the customer, and are thinking how to incentivize the concierge staff to book more tours. So this will be win-win for all,” said Ngai.

Asked if Klook will also work with other chains, Ngai said it is “almost impossible” to replicate the partnership with another chain given its wide scope.

The Shangri-La and Klook partnership isn’t the first attempt by hotel chains to incorporate tours and activities into their fold. Last year, Marriott International took a stake in tours-and-activities metasearch platform, PlacePass.

The difference is that Shangri-La, with over 100 hotels compared with the thousands that Marriott has, may be able to drive a deeper partnership with Klook, given also that it owns and controls most of its hotels. Both companies are based in Hong Kong.

Klook on the other hand is “the young, agile startup,” said Ngai, and is keen to clear any lingering perception that it serves only millennials.

“On a strategic level, we want to demonstrate that we can serve luxury travelers and partner a company as established as Shangri-La,” said Ngai.

They may end up great bedfellows after all.

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Tags: Klook, loyalty, marriott bonvoy, shangri-la

Photo credit: Shangri-La guests can book experiences at the concierge desk

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