Case
Brief Case Report # 2 – Hilton HHonors
Starwoods introducing frequest guest program, and $50million ad campaign. Problem: raising costs for all hotels as they need to keep pace with competition. 1. How does Hilton HHonors program deliver value to its two parents, Hilton Hotels and Hilton International?
Cooperate on sales and marketing, standardized operations, and run the Hilton HHonors loyalty program. (HHW) Not as a profit center but service 2. More specifically, can you quantify this in terms of Hilton hotel revenue/profit that can solely be attributed to the HHonors program?
Members stayed avg 30 stays in all hotel chains, 4.2 nights per stay. 17.5% increase in member utilization of HHonors hotels globally. However, more than half of members went to competing chains, due to limited network size and distribution. Conjoint analysis said 1 in 5 members were solely attributable to their membership in the program
3. How does HHonors program provide value to its members (customers)?
Members collect points that they can redeem for rooms and room upgrades at Hilton hotels, products at partner companies or convert them to miles in airline frequent flyer.
4 tiers of membership: blue, silver, gold, diamond
Diamond members: under promise and over deliver
4. Of HHonors’ value propositions you discussed in question 3, what would be affected by the launch of the Starwood Preferred Guest program? What would not?
5. Can HHonors win a price war—i.e., by competing head-to-head on the rewards benefits—with the Starwood program?
Starwoods introducing frequest guest program, and $50million ad campaign. Problem: raising costs for all hotels as they need to keep pace with competition. 1. How does Hilton HHonors program deliver value to its two parents, Hilton Hotels and Hilton International?
Cooperate on sales and marketing, standardized operations, and run the Hilton HHonors loyalty program. (HHW) Not as a profit center but service 2. More specifically, can you quantify this in terms of Hilton hotel revenue/profit that can solely be attributed to the HHonors program?
Members stayed avg 30 stays in all hotel chains, 4.2 nights per stay. 17.5% increase in member utilization of HHonors hotels globally. However, more than half of members went to competing chains, due to limited network size and distribution. Conjoint analysis said 1 in 5 members were solely attributable to their membership in the program
3. How does HHonors program provide value to its members (customers)?
Members collect points that they can redeem for rooms and room upgrades at Hilton hotels, products at partner companies or convert them to miles in airline frequent flyer.
4 tiers of membership: blue, silver, gold, diamond
Diamond members: under promise and over deliver
4. Of HHonors’ value propositions you discussed in question 3, what would be affected by the launch of the Starwood Preferred Guest program? What would not?
5. Can HHonors win a price war—i.e., by competing head-to-head on the rewards benefits—with the Starwood program?