LAS VEGAS—While many hotel companies spent 2016 setting up member-only rates that gave loyalty members discounts on room rates if they booked direct, Red Lion Hotels Corporation (RLHC) went in a different direction. Instead, the company partnered with Expedia Inc. to offer RLHC’s exclusive Hello Rewards member-only rates on Expedia.com and Hotels.com (U.S.), and provide direct member sign-up for Hello Rewards from these sites.
But it may not necessarily be a matter of who is right and who is wrong. “You have to remember, 54% of the rooms in the U.S. are booked at an online travel agency. That’s a pretty big marketplace and for us to ignore it would be silly,” said Greg Mount, president and CEO, likening it to designers who own their own stores but also sell their lines in department stores. “Unless you’re Marriott or Hilton, you didn’t have the ubiquity to say you can ignore that marketplace.”
Acknowledging that RLHC doesn’t have the same scale as those companies, Mount said, “We need to compete in this marketplace, we need to win digitally and the best way to do that is to work with companies like Expedia. One of the things that’s so brilliant about it is for Expedia to sell our loyalty rates online, those eyeballs they’ve spent billions of dollars to get to their website have to go and sign up as a Hello Rewards member. That gives us the ability to market to them one to one. No longer are you just paying a big fee for that reservation. You are now gaining a customer and the ability to market to them one to one. You’re starting to see the industry looking at us and going, ‘That was brilliant. How do we do it?’ We are going to win through innovation and technology, and that’s one way to do it.”
Roger Bloss, EVP/president of global development, added, “One thing I liked about the program is about 75% of those people who originally booked through Expedia have become direct bookers to the brand. If you start thinking about the cost savings, it’s pretty exciting. I like that it changed the playing field.”
Turning to how the RLHC and Vantage legacy brands will integrate when it comes to loyalty, Bernie Moyle, EVP/COO, said, “The end game is there has to be consolidation, but that’s in name not necessarily offer…Over time, they’ll have to evolve and join together. I don’t think we’ve figured out all of the mathematics behind that yet.”
And, Bloss noted, “If we’re going to be competitive in the loyalty programs, we need to have the technology to support that.”