Loyalty rewards programs - an evolving privilege

Many raised eyebrows a few weeks ago when Israel’s Tel Aviv-based hospitality group Brown Hotels signed a collaboration agreement with hospitality giant Hilton Hotels. Brown, known for its diverse portfolio of design-led boutique hotels - mainly in Israel - is franchising two of its hotels in Greece to be part of the Curio Collection by Hilton soft-brand.

What are the advantages of this collaboration in the world of online travel agencies?

“These two resorts, Chania and Corinthia, will offer an unparalleled hospitality experience to guests starting in the summer of 2024. The collaboration will include these hotels under the Curio collection umbrella and the Hilton Honors loyalty program, which numbers around 180 million members and offers important privileges to guests,” says Brown Hotels founder and CEO Leon Avigad.

Global hotel brands possess numerous marketing-magic strengths. All are focused on loyalty programs. With evolving technology, marketing campaigns are launched by the hotels to promote the benefits of direct booking and hotel loyalty programs and have stopped awarding points and perks for bookings that are not made directly. By cutting out the middleman, guests enjoy a more straightforward and tailored interaction.

Joining loyalty programs also provides surprising rewards. Membership is usually complementary, and guests often enjoy better rooms and exclusive perks for being loyal and not booking via a third party. Most hotels offer a complimentary breakfast and specialty rewards for direct bookers.

Staying more often will grant guests elite status with a variety of benefits (reward points for complimentary future stays; early check-in, late check-out; food and beverage credits; lounge access; free wireless Internet, enrollment for the complimentary Elite status; bonus points and even free nights). Travelers on the road can join multiple hotel loyalty programs and enjoy the opportunity to expand their choices.

Is this policy a success?

Max Starkov, an American travel and hospitality tech consultant and adjunct professor of hospitality technology at New York University explains: “There is a need to differentiate between the major global hotel brands and independent hotels. While for the brands the ratio is 4 to 1 in favor of direct booking, with independent hotels it is the complete opposite,  1 to 4 in the US and 1 to 5 in Europe,” he says.

“The Marriott Bonvoy loyalty program is marking significant growth. Its membership increased to 196 million in 2023. Bonvoy members accounted for 62% of the brand’s global occupancy in the last quarter. Marriott views its brand loyalty platform expansion as a testament to its current tech transformation and growing engagement with its members.’’

No wonder the prestigious Jaffa hotel in Tel Aviv, part of the Luxury Collection – Marriott, is considered a hotel that enjoys one of the highest direct bookings in Israel.  Brown’s interest in enjoying Hilton’s loyalty program with the Curio collection in Greece is also understandable. 

Why doesn’t it happen in Israel?

According to Israeli hospitality and tourism expert, Joseph Fischer “The Brown group is only collaborating with a global brand overseas because it is a locally based Israeli brand that is successful at its core. In Israel, Brown has a business base and a large domestic tourism market. It does not need an international brand.

“In Greece, it’s a different story: The Brown brand has no marketing value of its own and is almost completely dependent on international tourism. In order not to be ‘captured’ by online travel agencies and big tourism wholesalers, [the Brown group] needs an international brand flair to give them exposure,” he explains.

However, a new Curio Collection by Hilton property, located close to Tel Aviv’s Independence Park, is already under construction. It will be one of the largest, with 401 stylish guest rooms. An additional 176 rooms will be managed under LXR, another Hilton soft brand. Both will enjoy the Honors Mega Loyalty platform like the Brown hotels in Greece.

Lately, various businessmen behind the boutique hotels are collaborating with Accor’s Collection brand Mgallery to attract members of its ALL customer brand program. Examples are the Elkonin Tel Aviv MGallery and the Theatron Jerusalem Hotel & Spa MGallery Collection. A trendy growing phenomenon (defined as umbrella branding and established by recognized global brands) collection hotels, backed by mega loyalty mechanisms, are meeting the increasing demand for travel experiences.

As the hospitality industry fosters individuality, it is especially appealing to hotel owners in Israel who do not wish to lose control and seek franchise deals. Maintaining their freedom, while enjoying the mega capabilities of global platforms to retain customers is a dream come true. All that is left is for inbound tourism to prosper again in Israel.

The writer is the Travel Flash Tips publisher.