With frequent flyer programs losing some of their luster, hotel companies are seeking to fill the breach by focusing on the relatively high value of their loyalty schemes.

Prominent among them is Marriott, which has taken a new look at loyalty and developed a different approach to its Marriott Rewards. To put the spotlight on those changes, the company brought in the top experts on the subject—Randy Petersen and Tim Winship, who collaborated on Mileage Pro: The Insider’s Guide To Frequent Flyer Programs (published by OAG Worldwide)—to a press event in New York.

Both analysts were upbeat about both the lodging product itself and hotel loyalty programs—especially in comparison to their airline counterparts.

According to Petersen, “The hotel product is so much better these days and so hotel awards are more valuable; even the merchandise the chains offer is more valuable than it used to be.”

Similarly, Winship said, “The problem with loyalty has always been on the airline side. As far as hotels, with rates up, the value of awards is higher in absolute terms; in fact the value of hotel points is at an all-time high.”

Winship did add that airlines have one potential advantage in that an upgrade to Business or First Class is more coveted than an upgrade to a nicer room or a suite.

The two experts also discussed the problem—or perceived problem—of complexity in the programs. Ed French, Marriott’s senior vice president – customer relationship management, said, “If we make it less complicated, we will be taking something away from one group; we could average our seven levels of earnings into one but we think our method makes more sense.”

Winship agreed that “Complexity is a necessary evil”; he noted that JetBlue “has a simple program but the miles expire.”

And Petersen added, “Complexity is self-selective for members; if travelers want to stay at different brands and use partners, it can get complex.”

Because of the complexity and different methods of earning points, French himself conceded, “Even the experts can’t tell the programs apart.” As a result, Marriott has taken steps to distinguish Marriott Rewards from its competition.

It hired a trend-sniffing California consulting firm called IDEO to see what was going on in the “real world.” IDEO followed actual travelers in what they called an “ethnographic” study—spending a lot of time with individuals rather than surveying large groups. They followed travelers in all age, gender and income categories at a variety of locations.

What they found, according to IDEO executive Daniel Kushner, is that “loyalty is driven by positive experience.”

While that conclusion might not have seemed to require the cost of hiring a high-powered consultant, it does divert from the tradition of loyalty programs where the focus has been on points and earnings.

According to Kushner, “Our approach is human centered and what we found among frequent travelers were statements in the mode of: ‘I’ve met the general manager at every Marriott I’ve stayed in’; and ‘I want them to know me.’”

French said that Marriott saw in the IDEO research “new opportunities to connect the program with the guest experience” and set out to “emotionally enrich” that experience.

The result: Marriott, through marketing and innovation, is seeking to incorporate Marriott Rewards into the entire travel experience for loyal guests. That includes: personalizing stays through the use of guest histories; communicating before, during and after stays; implementing online tracking systems that make it easy to see how close a member is getting to a reward; and providing more opportunities for room upgrades.

It all comes under the new advertising tagline: “You’ve earned more than points.”

And, excuse the pun, but that’s exactly the point. Most frequent travelers are now members of multiple programs, carrying a half-dozen membership cards in their wallets. As French pointed out, “Points are merely the cost of entry. Our philosophy is making the life of the traveler better.”

Competitors interviewed following the Marriott event took note of Marriott’s polishing its pitch. In fact, Adam Burke, senior vice president of Hilton HHonors, says his company has been moving aggressively in a parallel direction.

“I’ve looked with interest at Marriott’s recent announcements,” Burke says, “and there is nothing new in them for us. We have been migrating our program toward personalization for two to three years. We have a technology system that allows us to personalize the experience; our front desk staff can recognize every member and instantly be aware of the kind of room they want, the kind of amenities and services they want—and that is being dramatically expanded where we will be able to offer even more robust guest recognition options.”

And communicating with the guest has become more personalized, Burke says, so HHonors members “completely customize their own communications as far as content, the channels through which they want to be reached, how they earn their currency and more.”

”It comes down to simplicity, choice and control. We need to simplify our communications, but not the program itself,” Burke states.

Burke is adamant in saying, “We have worked fastidiously to integrate what we do with the brand experience; technology enables us to do things for top customers and that includes customers beyond the transient business traveler—like meeting planners.”

At this point, Burke says, and he is probably speaking for other brands as well, “HHonors is a core brand attribute; take it away and Hilton is no longer the same brand.”

Richer Rewards

While hoteliers should look beyond points, they cannot neglect the power of the awards themselves. Starwood recently re-launched its co-branded credit card with American Express in the United States (Starwood Preferred Guest Credit Card) and launched a small business card (Starwood Preferred Guest Business Credit Card). The cards have added the benefits of double points (2 to the $1 spent) for spending on the cards in Starwood hotels and related retail worldwide; as well as the ability to earn Gold status by spending $30,000 a year on the cards.

New benefits on the cards include: 10,000 Starpoints with first purchase (enough for up to three nights); double Starpoints on stays at participating hotels; the business cards also add perks for small business owners including discounts on air travel.

For the truly award-obsessed, Starwood has also developed “once-in-a-lifetime” experience packages as ultimate rewards, including: tickets to Wimbledon finals; playing in a foursome with a golf pro; movie premieres; and BMW driving school; similarly Hyatt offers a Porsche for a year, and a fully equipped Hyatt room (42-inch flat-screen TV, etc.).

And loyalty programs at lower price-point hotels continue to grow. TripRewards, the program offered by Wyndham Hotel Group (formerly Cendant, representing Wyndham, Ramada, Days Inns, Howard Johnson and others), now has 5.2 million active members, who can earn points or miles; points can also be earned by booking Avis and Budget rental cars and making other purchases.

And Choice Hotels recently welcomed its 5 millionth member to its Choice Privileges, which extends to all these Choice brands: Comfort Suites, Quality, Sleep Inn, Clarion and MainStay Suites.

But even with enhanced and expanded reward opportunities, loyalty program managers keep coming back to the intangibles; as Korman says, “Among more frequent travelers, there is an increase in the desire for recognition and better treatment which may be partly fueled by the unpleasantness of the travel experience; the airport experience is a hassle and people want to be welcomed when they arrive at the hotel and to be treated well if they have shown loyalty.”

Toward that end, Hyatt has taken that “human-centered approach” to a new level. Loyalty members at the highest levels of point accumulation are eligible to receive pre-recorded wake-up calls from their friends and family.

And even as travelers fear contraction in airline programs, lodging loyalty options continue to expand, partly through acquisition. For instance, Starwood has now integrated Le Meridien into its SPG; and now Hyatt is adding Hyatt Place and Hyatt Summerfield Suites to Hyatt Gold Passport. They will be fully integrated as of the new year.

The bottom line: If airline loyalty programs are not looking up, look down and take a closer look at hotel programs.

On a Sidenote....Kiosks

Travelers who are loyal to Embassy Suites, the upscale all-suite brand, will now find EmbassyDirect Registration Kiosks at every single location; they not only allow for rapid check-in and checkout—but offer the capability of printing airline boarding passes.

Embassy Suites claims to be the first brand to install check-in kiosks at every hotel; it also became the first to provide airline boarding pass printing capabilities for 18 major airlines at kiosks in every hotel.

The machines dispense card keys (one or two, as selected); guests need only insert a credit card—just as with the airline kiosks. Guests may change rooms at the kiosks – just as they can change airplane seats—but there is limited information for now on rooms. “At some point, we will integrate virtual tours of rooms, John Lee, vice president-brand marketing, says.

According to Lee, usage of the kiosks is still under 10 percent at most properties (although some range into the high teens) but the point, he says, “is to offer guests choice, convenience and control.”

Every machine is the same, according to Lee, who adds, “It is a very intuitive system; and there will always be a front-desk team member nearby in case anybody needs help.”

To encourage use of the kiosks, Embassy Suites is running a sweepstakes through the end of the year—giving away a million HHonors points (Embassy Suites is a Hilton-operated brand) for those who register online and use the kiosk. There will also be a 100,000-point winner every other week.

The machines take travelers “right to the airline check-in page, so you see exactly what you would see at the airport,” Lee says, “and it’s then easy to bounce back to the hotel page.”

Also, “We are not calling them check-in kiosks because they have the potential of doing a lot more, in addition to the boarding passes. At some point they may be used for functions like dinner reservations, car rental and more,” Lee states.

But Embassy Suites will move cautiously in that direction; Lee explains: “We don’t want people spending a lot of time at the kiosk; we have to be mindful of that.”

“We’re bullish on usage,” Lee says, “if you look at the airline industry you see tremendous usage and we’re confident you will see usage go up every month.”

While Embassy Suites is a step ahead, competitors are not standing still. Chains are now moving to implement check-in kiosks, as well as the boarding pass option. For instance, guests staying at the Hyatt Regency Cambridge in Massachusetts can now use Hyatt Fast Board to print out boarding passes for 16 domestic carriers.

The service is available at the front desk and is not connected to the check-in kiosk. Debbie Smith, a spokeswoman for the Hyatt Regency Cambridge, in Massachusetts, one of the first hotels to offer Fast Board, says check-in and boarding pass printing are considered “two different services.” She says in the few months since Fast Board was installed, it has seen “substantial usage.”