The Importance of Loyalty Management Programs in the Travel & Hospitality Industries
According to data provided by Research and Markets, the Loyalty Management Market is expected to attain a value of $6.2 billion by 2023 and growing at a CAGR of 18.6% during the forecast period. Loyalty Management is relevant in many industries including BFSI, Travel & Hospitality, Media & Entertainment, Healthcare, Retail, Telecom & IT, Manufacturing, and Others. A report by Deloitte explains the importance of loyalty programs in the Travel & Hospitality industry, as many high-frequency travelers have carried their relationship with a particular brand loyalty program past a tipping point. The report claims that two-thirds of high frequency travelers stay at the same hotel brand for more than half their travel days, regardless of location. Snipp Interactive Inc. (OTC: SNIPF), Marriott International, Inc. (NASDAQ: MAR), Hilton Worldwide Holdings Inc. (NYSE: HLT), Hyatt Hotels Corporation (NYSE: H), InterContinental Hotels Group (NYSE: IHG)
"The loyalty game is a race. Many brands vie for the loyalty of the early-stage, dispassionate customer, but the ultimate prize is typically reserved for one brand alone. Once the customer reaches the tipping point and becomes actively loyal, there is no second place. Consumers who have a conscious favorite among hotel brands will spend extra money and drive extra miles to patronize that brand-even if they don't have rewards to use at the moment… Hotel loyalty programs are not only ubiquitous, but they've also become hard for consumers to distinguish from one another. To hotels, they bring both significant cost and significant potential value," Deloitte explained.
Snipp Interactive Inc. (OTCQB: SNIPF) is also listed on the TSX Venture Exchange under the ticker (TSX-V: SPN). Yesterday the company announced breaking news that, "that it has entered into a 5-year loyalty services agreement with a hospitality company based on a variable pricing model with a guaranteed floor.
Apart from gaining traction in the well-established hospitality space, this Agreement marks Snipp's first foray into a five-year long-term agreement based on a variable pricing model, with a guaranteed floor. This allows the company to enjoy the upside associated with programs that grow their membership over time versus taking fixed fees.
"With the popularity of this particular loyalty program, which is projected to rapidly grow and based on conservative projections provided by our Client, we are optimistic that this agreement will result in a consistent recurring revenue stream for the company estimated to be anywhere between $500,000 and $1,000,000. Given that this is our first entry into a variable pricing model, we have protected ourselves against any possible downside with a guaranteed floor of $400,000," said Atul Sabharwal, Chief Executive Officer at Snipp. "This year we are extremely focused on exploiting opportunities in new industries such as Hospitality and Cannabis, as previously discussed. There is a clear market need in both of these industries for software solutions such as ours that are cost effective, scalable and based on flexible business models."
Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of more than 6,500 properties in 30 leading hotel brands spanning 127 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company also operates award-winning loyalty programs: Marriott Rewards®, which includes The Ritz-Carlton Rewards®, and Starwood Preferred Guest®. Recently, the company announced that it expects to open more than 50 new hotels in India and raise inventory to more than 30,000 rooms over the next few years, thanks to demand for mid-market hotels. Demand is also growing for Marriott's upscale and luxury brands; the company, for instance, currently has three Ritz-Carlton projects under development in Pune, Mumbai and New Delhi.
Hilton Worldwide Holdings Inc. (NYSE: HLT) is a leading global hospitality company, with a portfolio of 14 world-class brands comprising more than 5,200 properties with more than 856,000 rooms in 105 countries and territories. In 2017, Hilton achieved record-setting growth, unveiled industry-leading innovations, and introduced new benefits for guests and Team Members. 2017 was a year of industry firsts, including the launch of Five Feet to Fitness, Hilton Honors loyalty program partnership with Amazon, Tapestry Collection by Hilton, and workplace innovations that received international recognition. It was also the year that Hilton introduced a ground-breaking concept - Connected Room - the first truly mobile-centric hotel room that will let guests personalize and control their stays from the award-winning Hilton Honors smartphone app.
Hyatt Hotels Corporation (NYSE: H), headquartered in Chicago, is a leading global hospitality company with a portfolio of 14 premier brands. Last month, Hyatt and Hui Xian Real Estate Investment Trust jointly announced today an agreement for Hyatt to manage a hotel owned by Hui Xian REIT. Located in Jiefangbei, Chongqing's Central Business District in western China, the hotel is currently under renovation and is expected to be rebranded as a Hyatt hotel in the first quarter of 2019. "We are excited to further expand Hyatt's brand footprint in Chongqing, a city with abundant tourism and economic growth," said Mr. Christopher Koehler, Hyatt's vice president of operations and managing director for China. "The hotel is expected to join the World of Hyatt loyalty program on July 1, 2018 and participate in our extensive network of hotels in more than 50 countries. We are very pleased to collaborate with Hui Xian REIT again, and we look forward to welcoming guests in the heart of Chongqing."
InterContinental Hotels Group (NYSE: IHG) last month announced that it has agreed to acquire a 51% stake in Regent Hotels & Resorts (Regent) for $39 million in cash. IHG will have the right to acquire the remaining 49% interest in a phased manner from 2026. IHG will bring Regent into its brand portfolio at the top end of the luxury segment and will accelerate its growth globally, supported by IHG's powerful enterprise. IHG's intention is to grow the brand from six hotels today to over 40 hotels in key global gateway city and resort locations over the long term. IHG is already a global leader in the luxury segment with the world's largest luxury brand, InterContinental® Hotels & Resorts. The acquisition of Regent is part of one of IHG's new strategic initiatives focused on continuing to expand its footprint in the fast-growing $60 billion luxury segment. This initiative is supported by the creation of a new dedicated division to further enhance our capabilities in this area and will be funded by IHG's efficiency programme, as outlined at our Full Year Results on 20 February.
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