The fast-growing hotelier has launched a loyalty program called "Business Pass" with a focus on micro-events. The sticking point is only about a fifth of Sonesta's portfolio is onboard.
Sonesta International Hotels is hoping to give its corporate bookings a boost with the launch of a community-focused membership scheme.
The Boston-based hotel group grappled with how best to use a loyalty program to maintain momentum in March last year after rapidly expanding through the pandemic, going from fewer than 100 hotels to 1,300 today.
On the corporate side, that’s culminated in a new program called Business Pass, which it launched at the end of September, designed to capture more group bookings from smaller companies.
Its group sales are back to 2019 levels, and represent between 25 and 28 percent of its overall business, with corporate travel at less than 10 percent. But Sonesta aims to reach up to 45 percent for the two segments combined, and corporate travel is only 80-85 percent recovered, according to chief commercial officer Garine Ferejian-Mayo.
“That’s where we have a huge opportunity as business travel returns,” she said.
A Micro Focus
Business Pass perks include discounts of up to 12 percent off best available rates, and 12 percent off group blocks of 10-20 rooms. This means even organizers won’t have to negotiate rates for last-minute meetings.
There’s also on-demand meeting rooms, food and beverage credit, early check-in and late check-out, and an automatic upgrade to Elite Status in its Sonesta Travel Pass loyalty program (which usually requires at least 12 nights a year) on offer.
The program was piloted in the second quarter among 50 of its Select branded hotels located in suburban and urban markets. But based on feedback, Sonesta has expanded it to its entire managed estate.
“We offer rates to small groups the other brands do not,” Ferejian-Mayo claimed. “Compare us to IHG, Marriott, and Hyatt, the differentiating point is we offer special business rates to small group blocks … there was an opportunity to work with small to mid-size companies that do not work with the larger chains, or even travel management companies.”
Where’s the Scale?
As a free program, there’s no doubt Business Pass will appeal to many of its customers. And Sonesta is on trend with its focus on smaller companies.
“Everyone in the business travel industry has been talking about managed travel for small and medium-sized enterprises forever. It’s never worked,” Ben Alderman, head of financial, travel and accounting partnerships at credit card firm Ramp, told Skift recently. “No one has had any success, because it just doesn’t matter enough to (travel agencies) if they’re spending $50,000 or $100,000 a year on travel for them to manage that.”
Sonesta obviously thinks the segment does matter, and Ferejian-Mayo said she’d seen a decline in business from larger clients that still want to Zoom with customers (despite Sonesta’s sales from the global distribution systems rising fivefold in the past six months, up to 5 percent of total sales.)
Where Sonesta may struggle is that the new pass doesn’t yet apply to its franchised properties — of which there are 1,100 hotels, thanks to its acquisition of Red Lion Hotels.
“We hope to expand to our franchised locations in the future,” the company said in a statement.
The rewards structure is also very different to brands like IHG, which recently revamped its loyalty program to include more options to pick bonuses, rather than receive standard ones.
Speakers at Skift Loyalty Summit this year argued that post-pandemic travelers wanted more freedom and flexibility when choosing rewards, considering they were deprived of having the luxury of making choices for the best part of two years.
But Ferejian-Mayo thinks road warriors will now be able to feel part of a community, “if they’re traveling from Chicago to New York, from New York to Philadelphia, or Philadelphia to Los Angeles, they’ll feel they’re part of a program where they can gain the same benefits, regardless of which Sonesta managed hotel they’re staying in.”
“By creating a unique business travel community, it also allows us to give them preferred access across the portfolio on potential leisure offers, and potential exclusive offers. The trend of bleisure is definitely here,” she said, adding there’d been an uptick in Thursday, Friday and Sunday stays.
On top of a partnership with American Express, it’s also exploring perks with ride-hailing app Lyft and other brands. “The opportunity is endless as we build this community of business travelers from small to mid-size companies,” she added.
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Photo credit: The Shelburne Sonesta New York. Sonesta