Loyalty Program
Excerpt from remarks to Boston College Chief Executives Club
January 17, 2018
TAKEAWAY: LOYALTY PROGRAM
KAPLAN:
What's going to happen with the loyalty program?
SORENSON:
It's going to get better and better. It is one of the best things we acquired with Starwoods. Marriott Rewards was a bigger program with about the same penetration rate. So we talk about SPG [Starwood Preferred Guest] mix or Marriott Rewards mix when we're touring hotels, and around the world, about 55% of all of our business comes from our loyalty program members, which is a pretty high piece. But we obviously want to grow that, and the SPG folks were rabid loyalists, in part because the regular travelers particularly, the elite travelers, were given tremendous benefits. So we want to make sure that we're staying true to that kind of—that doesn't mean there won't be some changes. But we want to make sure we continue to motivate people to be tied to us.
The other thing that Starwood had which was really useful is for a regular business traveler, of which probably virtually everybody in this room is, one of the reasons you like these programs is because you want to redeem at a place which turns you on—which you aspire to go to. Starwood had this collection of hotels in the Maldives and in Venice—lifestyle hotels in all these places where people were really interested in going. And you knew that that had to be the case, because they might be staying every week at a 35-year-old Sheraton which was not necessarily the greatest experience in the world, but they were doing that because they could look forward to a vacation which was a really special one.
And to be able to pull that all together, we think we can—we do have to deliver value. Loyalty doesn't come for free. It never has. There was never a great day in loyalty where you could just have people's loyalty for asking it. You've always had to earn it. But to deliver the value, to deliver the experiences, to deliver the aspirational destinations that people want for their vacations—I think these are all things that should protect us, hopefully, in the future.