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Hilton Honors Worldwide Loyalty Wars

Divya IyerPGP15/140

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Hilton Honors Worldwide -not as a profit center but as a

service to HHC and HIC

Required to measure the effectiveness through set of metrics.

Membership was provided free of cost.

Members earned points during their stay at HHC or HIC

Hotels

4 tiers of membershipBlue, Silver, Gold and Diamond

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Yield Management increased revenue by 20% - Loyalty Program increased it by 23%

Higher Revenue

Keeps costs downprovides more rewards to customers

Collaborating with Partners

Franchisees see loyalty program as business driverhence attracted to invest

Working with franchisees

Know customer betterbetter service offering

Guest relationship

Portfolio of offerings to make the traveller use Hilton as preferred vendor

Helping travel managers gain compliance

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Hilton lready runs above breakeven point at70% occupancy ( Breakeven 68%

occupancy) The revenue obtained from the program is

hence profit generating revenue

VALUE OF THE PROGRAM Mn $

Cost of Program 17.55575342

Revenue 1349.9204

Gross profit 1332.364647

Nights paid (members) 7015000

Nights paid (non members) 1708800

Claimed nights 180000

Net nights 8543800

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Do we have to compete point by point?

Do we have to take a different positioning and

differentiate HHonors from Starwood?

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Annual Spend 2000 (assumption)

MEDIUM Stays needed Nights needed Points per dollar Bonus Points Points/NightStarwood 4 10 3 6000 600Hhonors 10 25 10 15% 23000 920Marriot 0 15 10 20% 24000 1600Hyatt 5 15 5 15% 11500 766.6667

PREMIUM Stays needed Nights needed Points per dollar Bonus Points Points/NightStarwood 25 50 3 6000 120Hhonors 28 60 10 25% 25000 416.6667Marriot 0 50 10 25% 25000 500Hyatt 25 50 5 30% 13000 260

Competitive point scheme Games Player would choose Hilton over Hyatt and Starwood in Medium and PremiumSegmentThus, the service oriented members need to be targeted

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Competing by loyalty programs increases reward value while they can

not charge higher prices. As a result, their profit margins will decrease.

Hilton, therefore, shouldnt play a point to point game.

Maintain current rewards levels and further customize redemption

choices and increase convenience of program useeliminating use of

certificates etc

Invest in expanding the distribution and making Hilton available at

various locations

Concentrate on the high-touch and feel guest experience

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THANK YOU