Hilton Inks Exclusive Deal with Small Luxury Hotels of the World – a Loss for Hyatt
Skift Take
Key Points
- Hilton signs exclusive deal with Small Luxury Hotels of the World, ending SLH's partnership with Hyatt.
- Hilton's loyalty program members will soon be able to earn and redeem points at SLH properties.
- The deal underscores the challenges faced by independent hotels when competing with major hotel groups.
Summary
Hilton has signed an exclusive licensing deal with Small Luxury Hotels of the World (SLH), allowing Hilton customers to book stays at SLH's 560 boutique hotels through Hilton's platforms. This deal marks the end of SLH's partnership with Hyatt, affecting Hyatt's loyalty program members who previously could use their points for SLH stays. The deal highlights the ongoing struggle of independent hotels to compete with large hotel groups in terms of customer acquisition and marketing costs. Hilton's loyalty program has seen significant growth, outpacing rivals like Marriott, IHG, Accor, and Wyndham.
Hilton revealed Wednesday that it had signed an exclusive licensing deal with Small Luxury Hotels of the World (SLH), a group of 560 boutique hotels unaffiliated with the major hotel groups.
The deal will let Hilton’s customers book stays at these Small Luxury Hotel properties through Hilton's site and app. The 180 million members of Hilton's loyalty program will soon be able to earn and redeem points for stays at these properties, too. The companies didn't provide a timeline for the integration.
Hyatt is a loser here. Small Luxury Hotels is ending its multi-year partnership with the smaller hotel group. World of Hyatt loyalty members could use their reward points to book stays at the group of boutique hotels. Last year, Hyatt lost a loyalty licensing deal with MGM Resorts to Marriott.
The Hilton deal's commercial value wasn't revealed.
The partnership comes at a time when independent hotels increasingly struggle to compete to keep their costs of acquiring customers and marketing costs with distribution players in line with the volume discounts and scale efficiencies that the giant hotel groups enjoy.
As Skift has noted, independent hoteliers have an uneven playing field when competing against the big hotel groups for direct bookings, which tend to be more cost-effective.
The move comes after InterContinental Hotels Group (IHG) said in November 2022 that it had added Iberostar Hotels & Resorts as a new brand through a comparable licensing deal that let IHG market that group of about 70 all-inclusive hotels and resorts.
It also comes as Hilton has had larger growth in its loyalty program over five years than rivals Marriott, IHG, Accor, and Wyndham.
Photo Credit: A view of a terrace at Château Le Nessay, on the Emerald Coast of Brittany, France, which is one of the hotels that’s a part of the Small Luxury Hotels Private Collection. Source: Small Luxury Hotels of the World. Small Luxury Hotels of the World
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