The article I have picked this week is about IHG targetting Hilton loyalty programme members, who were recently disappointed by Hilton's change in policy.
Hilton annouced changes in the number of loyalty points needed to redeem a free stay in Hilton hotels, thus devaluing members accounts by 20%!
IHG which is a direct competitor for Hilton and whose loyal clientele overlaps with that of the latter, sensed the anger of Hilton Honors members and grabbed the opportunity to gain more market share.
IHG now offers highly attractive promotion points to HHonors members who have the highest amount of points, as well as the hotel managers who also suffered losses under the Hilton programme.
In my opinion, Hilton made a serious mistake by devaluing its members redeeming power. In this difficult period for the hotel industry, and as previously seen in my articles as well as on the web in general, it is loyal customers who are at the centre of all attentions, because they are the core of the hotel chains clientele.
This is why this situation is an excellent example of how quickly hotel chains need to react when their competitors make errors or bad judgements.
IHG appears to consider its loyal members more respectfully but it also takes this opportunity to reinforce its own loyal clientele. I think this will definitely make a difference in the short-term.
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I totally agree with you and I am quite amazed by Hilton changes. Indeed, as you said, loyal customers are a really important segment for hoteliers as we saw in class that it is less expensive for an hotel to develop its customers' loyalty than to attract new customers. I hope Hilton will realize its mistake and put it right.
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