What is the value of loyalty?

On August 18, 2018, Marriott merged its loyalty programs. With all the news around the merger, we at UNITE HERE felt it was a good time to analyze the rewards program overall. Our latest report takes a look at the program and its recent changes. One key roadblock to this analysis is that Marriott’s rewards program lacks transparency for franchisees, making it difficult to weigh the costs of the program against its purported benefits. Considering the size of the program, franchisees should demand more specific data to determine how well the program is working for them.

As far as the merger of the SPG and Marriott Rewards programs, several factors could impact its value to franchisees, including:

  1. Marriott’s market concentration in many areas has increased. Customers may be more likely to choose Marriott-branded hotels by default. If true, that could reduce the differential benefit of the rewards programs.
  2. The loyalty program’s extension to all Marriott brands (except Bulgari) raises the question of whether customers can be loyal to (or even keep track of) 30 brands.
  3. The new schedule of redemption costs for room-nights came out in early August; it resulted in a net decrease in points costs. As a result, franchisees may be liable for subsidizing an increasing number of rewards stays.
  4. The added complexity of “peak” and “off-peak” pricing for each hotel could result in customer confusion.

Check out our latest guide for more info and further suggestions about things current and potential franchisees may want to do to protect their interests.

Please feel free to get in touch with thoughts or questions.