Hilton Honors Program

Case 1: Hilton HHonors Worldwide: Loyalty Wars

Elizabeth Wright

Problem:

Because customer loyalty is driven primarily by “game playing,” does the Hilton HHonors program need to match the Starwood Preferred Guest Program in order to continue to be competitive?

Solution:

While it is not advised that the Hilton HHonors Program should match all components of the Starwood Preferred Guest program, it is recommended that they make modifications to their existing program to continue to bring customers back to their hotels and entice new customers without diluting the Hilton brand. A loyalty program is based on rewarding the customer that continuously returns to your hotel. In order for a customer to reap the full benefits and achieve incremental “perks”, they must actively seek out your hotel. It degrades the value of the program, if the quality of the “perks”, are not allocated appropriately amongst the frequent customers. It is also important that new members have the opportunity to benefit quickly from the relationship. If it takes too long and too many visits to accumulate enough points to really see a benefit from the relationship, then the customer will seek a new loyalty program.

In order to address these issues, the Hilton HHonors Program should reduce the volume of Blue and Silver members by working to shift those customers to Gold and Diamond status. In order to accomplish this, it must be easier and faster to move up the loyalty chain. Instead of requiring that customers stay ten nights to achieve silver status, Hilton should require that they only stay five. Achieving Gold Status would only require 25 night stays as opposed to the current 36. I also recommend keeping the required 60 nights stay to achieve Diamond status. Current rewards should stay intact and additional rewards should be added when customers achieve Gold status. At this point, customers should be rewarded with no blackout dates in both air travel and hotel visits. If a...