Skift Take

Does this mean that Wyndham's experiment in creating a simple, straightforward loyalty program for the everyday traveler failed? Maybe, but not necessarily. It just means that there are some laws in travel loyalty programs that are there for a reason.

In 2015, Wyndham retooled its loyalty program to be simpler and more straightforward and to appeal to what the company often referred to as “the everyday traveler.” The highlight of this new program would be a radical departure from what every other hotel loyalty program did (and still does): Instead of having multiple redemption tiers or categories for certain hotel brands, there would be a single 15,000-point redemption to stay at any hotel within the Wyndham portfolio of brands.

This meant that 15,000 points earned by staying at a Days Inn or Super 8 could be used toward a free night at a Wyndham Grand or a Howard Johnson — and vice versa. It meant that the most expensive hotels in the program were cheaper to earn free nights for, and the least expensive hotels were now more expensive.

In short, it was an easy-to-understand, flat-rate redemption model that didn’t require a masters’ degree in loyalty points strategy, and it was designed to appeal to the non-Starwood Preferred Guest (SPG) or Marriott Rewards or Hilton Honors elites — even if, at one point, Wyndham tried to woo those SPG members, if unsuccessfully.

Today, however, it appears that Wyndham has realized that its flat redemption rate model isn’t necessarily what the everyday traveler wants.

On April 3, the company is reverting to a tiered redemption model similar to the one it previously had prior to 2015, the company announced Tuesday morning. So now you can stay for free in some hotels for as little as 7,500 points, others for 15,000 points, and others for 30,000 points. There’s also the option to combine points and cash for free night stay redemptions, similar to how Hilton offers with its Hilton Honors program.

“Seventy percent of members and prospective members we surveyed said they preferred multiple redemption tiers,” Eliot Hamlisch, senior vice president of global loyalty and partnerships at Wyndham Hotels & Resorts.

In July 2018, Wyndham conducted 2,000 online surveys among its own active Wyndham Rewards members (approximately 1,200, with 240 having elite status) and active La Quinta Returns members (approximately 400, with 40 of them having elite status) to learn more about their loyalty program preferences.

And the reason why these respondents wanted more redemption tiers, Hamlisch said, was for “attainability.” “They wanted more flexibility and attainability. While having a single redemption tier is very simple and easy to understand, 15,000 points isn’t always attainable for all of our members. With that in mind, many of these changes are premised on our ability to offer attainability for members. It’s about making sure we do our part to keep our member base engaged, especially those with a lower point balance.”

But if it’s now easier for members with lower point balances to earn free nights at some Wyndham hotels, what is Wyndham Rewards doing to ensure that its members on the other end of the points spectrum don’t feel left out? Hamlisch said that the program is also introducing “accelerated earn” for its elite members to replace its previous annual point bonuses for Platinum and Diamond members.

Gold members will now earn 10 percent more in base points, while Platinum members earn 15 percent more and Diamond members earn 20 percent more. The math, Hamlisch said, will more or less work out in such a way that Platinum and Diamond members “will end up roughly in the same spot” and “those who stay more will get that much more rewarded as a result.”

Moreover, even if it’s theoretically easier to get a free night at, say a Days Inn or Super 8 now, that means it now takes twice as many points to get a free night at a Wyndham Grand.

Hamlisch said that of the 9,000 or so hotel properties that fall under the Wyndham umbrella, including La Quinta, a third of them, or about 3,000, will offer free nights starting at 7,500 points. Only 200, or less than 2 percent of the total portfolio, will move to that 30,000-point tier.

Additionally, beginning on April 3, La Quinta Returns, the loyalty program for La Quinta hotels, which Wyndham bought last year for $1.95 billion, will officially be integrated into Wyndham Rewards.

So far, Hamlisch said the La Quinta integration is proceeding as planned, and Wyndham is planning to incorporate some features of La Quinta Returns into the newly revamped Wyndham Rewards, including special perks and discounts for active U.S. military members and their spouses.

Hamlisch also noted that, in addition to the 9,000 hotels offered via Wyndham Hotels, there are collectively a total of 30,000 different accommodation options for members to choose from that include club resorts and vacation rentals from Wyndham Destinations.

And to encourage more flexibility and ways to earn and redeem points, Wyndham, like its other hotel peers, is also adding new or expanding existing loyalty partnerships beginning in April. They include one with Door Dash for food delivery, Marathon for gas stations, and Viator for tours and activities.

More Complicated (Or Less)?

However you view these new changes to the Wyndham Rewards program, it’s clear that there is some level of complexity that’s being added, and it’s a complexity we’ve seen in other travel loyalty programs.

Still, Hamlisch reiterated, it’s not as complicated as some of the other hotel loyalty programs out there. “Other competitors have six to seven or eight tiers,” he said. “There are on-peak and off-peak rates based off of seasons.”

And what of the payback value that Wyndham touted these past few years? Or the fact that it now costs twice as many points to stay at certain hotels and half the number of points to stay at others?

Hamlisch said that in creating the three different tiers, Wyndham was careful about making sure the loyalty program still offered “the most generous and lowest point redemption amount for those hotels against their comp sets in that city. I won’t mention specific competitors by name, but if you look at the hotels in these cities, you might need 50,000 to 100,000 points in those other programs. While jumping from 15,000 to 30,000 points, we still wanted to be competitive.”

When asked if Wyndham was prompted to make these changes to the tier model because the lowest-tier hotels weren’t getting their fair share of redemptions or revenue, Hamlisch said that wasn’t necessarily the case.

“It is fair to say that it’s a relatively even split,” he said, of the number of redemptions Wyndham Rewards saw for its economy and midscale brands versus its more upscale ones.

Whatever Wyndham Rewards members — and Wyndham Hotels franchise owners — make of the new changes, Hamlisch said they were driven by a desire to “better serve our everyday traveler and to offer more ways to earn and redeem.” He added, “We’re staying true to our core tenets, and the generosity of our program. All of this is being done with an eye toward driving incremental value for our hotel owners as well.”

Skift Editor’s Note: This article was updated to include more information about Wyndham’s survey research about loyalty member preferences.

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Tags: la quinta, loyalty, wyndham, wyndham rewards

Photo credit: Regardless of these new program changes, the bigger question remains: Will the Wyndham Wyzard remain as spokesperson? Wyndham

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