#218: Anantara, Avani, Kempinski - Leveraging the GHA "Discovery" Program To Drive Customer Loyalty for Independent Hotel Brands

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for Loyalty Marketing Professionals.

PAULA: I’m your host, Paula Thomas, and if you work in Loyalty Marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

PAULA: Are you leading a loyalty program in the UK, and wondering what will be important in the future?

PAULA: Would you love to hear brand new research into loyalty trends, so that you can figure out how to future proof your program?

PAULA: Well, to launch Collinson’s new partnership with Salesforce, and Salesforce’s new loyalty management module, these two leaders in loyalty are hosting an exclusive event in London, all about future proofing loyalty.

PAULA: It’s being hosted at Salesforce Tower, right in the heart of the city of London, on Thursday the 12th of May.

PAULA: So to get your free invitation, simply register on invite.salesforce.com forward slash future proofing loyalty.

PAULA: It promises to be a wonderful afternoon, a chance to meet and mingle with other loyalty professionals, and to be inspired with some wonderful ideas for the future of your loyalty program.

PAULA: Hello and welcome to episode 218 of Let’s Talk Loyalty.

PAULA: An interview about the largest travel loyalty program that you might not have heard of.

PAULA: Because I certainly hadn’t.

PAULA: The Global Hotel Alliance owns and operates the GHA Discovery Program.

PAULA: The world’s largest loyalty program for independent hotel brands.

PAULA: It encompasses more than 500 hotels across 35 brands in 85 countries.

PAULA: In 2022, GHA Discovery expects to surpass 20 million members.

PAULA: So I was delighted to be joined today by Kristi Gole, VP and Head of Product at Global Hotel Alliance, to understand this loyalty program which just relaunched in late 2021.

PAULA: I hope you enjoy listening to her insights on the unique challenges and opportunities of building a loyalty program without points throughout the last two extraordinary years.

PAULA: You So, Kristi Gole, joining me today from The Global Hotel Alliance.

PAULA: Welcome to Let’s Talk Loyalty.

KRISTI: Thanks so much, Paula.

KRISTI: It’s a pleasure to be here.

PAULA: I have to confess, Kristi, I know, I suppose, probably the least about hotel loyalty as an overall sector, and my regular listeners will know I’m ex-airline, so definitely a passion for travel, but I actually randomly got into loyalty in the telecoms business.

PAULA: So a whole different experience to what you guys are doing.

PAULA: There you go.

PAULA: Yeah, yeah.

PAULA: So listen, and the reason I’m prefacing the conversation with that is that I wasn’t aware of the GHA Alliance.

PAULA: As much as I love all of the individual hotel brands, I hadn’t realized you have this incredible group behind it.

PAULA: So obviously doing great work now on the building of the brand and obviously the loyalty proposition, which we’re here to talk about.

PAULA: So listen, let me kick off with my usual opening question, Kristi.

PAULA: I think you know that I love to know what do loyalty professionals admire and respect and I guess feel loyal to, because I think you’re going to give us a slightly left of field answer to a standard loyalty program.

PAULA: So what are you going to tell us?

KRISTI: Well, thanks Paul.

KRISTI: And I’m just a touch on when you mentioned you haven’t heard of GHA and I hear that quite often and I’m smiling about it because we’re a challenger brand and absolutely.

KRISTI: There’s a couple of journalists who have been pegged it this way.

KRISTI: We’re the largest program you’ve never heard of.

KRISTI: So we are this kind of behind the scenes guy.

KRISTI: But now we’re getting more and more to the forefront in a big program that’s starting to gain a lot more attention.

KRISTI: So it’s exciting.

KRISTI: And that’s why I’m happy to speak more about that today with you.

KRISTI: But to your question of, you know, what are people loyal to?

KRISTI: And myself included, I would say even though I’m a loyalty, our business is loyalty.

KRISTI: We’re a loyalty program that connects all these brands and these hotels.

KRISTI: And so that’s our core product.

KRISTI: And I’m responsible for product.

KRISTI: But I don’t really think in terms of loyalty.

KRISTI: I don’t really separate it from just a customer experience.

KRISTI: And what are people loyal to?

KRISTI: It’s more of a psychological thing.

KRISTI: It’s not really there’s a program I check the boxes for.

KRISTI: So when I hear what am I loyal to, my first thought was just Google.

KRISTI: And it’s really even the Google search experience.

KRISTI: So that from a, and that’s been consistent for the last, you know, 10, 20 years that I’ve probably felt that way of, you know, if you think about user experience, you know, it’s such a clean UI.

KRISTI: They’re such a beautiful, it’s crisp, it’s clean.

KRISTI: There’s one call to action.

KRISTI: There’s no decision fatigue.

KRISTI: And the other part is user experience.

KRISTI: So there’s very fast speed.

KRISTI: It’s incredibly relevant for me.

KRISTI: If I go on any other search browser, the results are completely off the mark.

KRISTI: I can’t, it’s counterintuitive.

KRISTI: I go to Google, it tells me pretty much what I’m looking for.

KRISTI: And they’re constantly updating it and they’re not over-complicating.

KRISTI: Again, they’ve had the opportunity.

KRISTI: They have so many different products and services, but they don’t mess up that search experience.

KRISTI: And so I’m incredibly loyal to that.

KRISTI: And then there’s a whole suite of products I use after that.

KRISTI: But the other one actually is a loyalty program.

KRISTI: But again, I don’t think I’m loyal to Amazon Prime, per se.

KRISTI: I always think I’m loyal to Amazon.

KRISTI: Because the convenience, the speed.

KRISTI: Now Prime enables me to do that at a low cost.

KRISTI: But I’m not thinking about the program, per se.

KRISTI: I’m just saying I’m loyal to Amazon and Prime is just kind of a mechanism that makes me experience it the way I want to.

KRISTI: So I still just think loyalty, people aren’t really loyal to a program, per se.

KRISTI: They’re loyal to the products it offers.

KRISTI: So for GHA, we have these 30, well, soon to be 40 hotel brands as of the summer.

PAULA: Yeah.

KRISTI: And we have 800 hotels, 100 countries.

KRISTI: People care about the hotel.

KRISTI: They don’t care about our GHA Discovery program, but they love that the program is helping them experience those hotels better.

KRISTI: And that’s what we’re meant to do.

PAULA: Yes.

PAULA: Yeah.

PAULA: Lovely answer.

PAULA: Very comprehensive, Kristi.

PAULA: Thank you for that.

PAULA: I would definitely agree with you that, you know, the world’s discovered Google and even through its journey of commercializing its offering, it has managed to stay true to its core purpose.

PAULA: So I think you’re very clear there and spot on in terms of why would I be loyal to anything else?

PAULA: Actually, Google delivers on every single criteria that I want as a browser.

PAULA: So, you know, regardless of my search criteria, I think you’re absolutely right.

PAULA: So and I will say that one of the reasons I called this podcast, Let’s Talk Loyalty, rather than Let’s Talk Loyalty Programs, was to have those kind of conversations, because at the end of the day, it is a feeling, you know, and it’s the feeling that drives the behavior.

PAULA: And we all know we’re here to drive profitable behavior.

PAULA: But if at the end of the day, that means, you know, I strip everything out of my product, except the one thing people want, then why not?

PAULA: You know, it’s a super nice proposition.

KRISTI: Yeah, no, I completely agree.

KRISTI: Loyalty, I mean, it spans, you know, the branding and positioning, the emotional connection, and then the operations is, did you have a connection to that customer service and operations enable that?

KRISTI: So loyalty is yes, I completely agree.

KRISTI: It’s how you feel about something.

KRISTI: And so it spans all different departments.

PAULA: Yes, yes.

PAULA: And I’m glad to hear as well that I’m not the only one that didn’t know the GHA or GHA Discovery brand.

KRISTI: So no worries whatsoever.

PAULA: Oh dear, sometimes I feel like, you know, I’m supposed to be the expert at everything, but it’s hard to be perfect, as I’ve often said.

PAULA: So anyway, we’re here to discover.

PAULA: So as a starting point, maybe would you give us the background to the context for just the Global Hotel Alliance?

PAULA: Because, you know, I know some of your brands, as I’ve said, like Anantara, for example, is an absolute favorite.

PAULA: And so, yes, I have some wonderful memories going back immediately now when I think about Anantara.

PAULA: So where did the concept come from in terms of was it purely a loyalty play that the GHA was created for?

PAULA: Or was it also for things like, I don’t know, buying and procurement or, you know, other hotel requirements?

PAULA: I’d just love to know the full purpose of the GHA.

KRISTI: Absolutely.

KRISTI: Well, actually, it was founded in 2004.

KRISTI: It was a startup back then, started up in Geneva, and it was a handful of brands and Oracle used to be Micro’s, who’s now been acquired by Oracle.

KRISTI: And it was simply founded on a B2B concept of, you know, there’s all these very strong regional luxury hotel brands and you mentioned Anantara, Kempinski is in many regions now, but very strong in Europe and now Asia and Africa is spreading around.

KRISTI: But there’s these regional brands that were extremely relevant and strong in their own domain, but they weren’t really able to compete on a global scale with the likes of the big pro or the big, you know, the Marriott Hilton.

KRISTI: And so what they did is they came together and we created this alliance.

KRISTI: I say we, it was five years prior to me joining, but they created this alliance just to help them compete.

KRISTI: So in terms of being able to negotiate partnerships, a little bit of procurement, sales, sales contracts, discounts on technology.

KRISTI: So kind of just basic operational and business aspects.

KRISTI: But it came to be by 2009, very much we realized all of our brands and hotels were on the same system.

KRISTI: They were all on offer systems.

KRISTI: And so we realized there was definitely the opportunity to bring in a direct to consumer component and loyalty program just made the most sense, because most of our brands didn’t have it or what they had wasn’t sufficient.

KRISTI: It wasn’t on a larger scale.

KRISTI: So I entered and we developed the program in 2009.

KRISTI: We launched in 2010.

KRISTI: And that was our first iteration.

KRISTI: That was back when we had only 12 hotel brands, 320 hotels.

KRISTI: In our first year, we got a million members.

KRISTI: And so that was fun.

KRISTI: We started building it from scratch.

KRISTI: And we went through all the different turns of, you know, direct mail fulfillment and the cost that went through that.

KRISTI: We had production facilities in all different regions.

KRISTI: And so a lot of interesting learnings on that.

KRISTI: And then email marketing was extremely cost effective for us.

KRISTI: So very much all of our marketing efforts, since we had, you know, we’re running on a purse string, we had, we charged very low fees to our brands because that was just kind of where we got our fit.

KRISTI: And so we had to be very, very, very mindful and creative and frugal with our cost spend.

KRISTI: So direct marketing was perfect.

KRISTI: As soon as members came in, in addition to lifecycle communications, all of our promotional messaging, everything became email marketing.

KRISTI: And then we developed an app and so it became some push notifications as well.

KRISTI: But everything became kind of direct to marketing consumers to try to engage our members once they were in the program.

KRISTI: But so my role largely, as you can tell, if I focus on that for the last decade, was largely just marketing aspects of continuing to optimize our approach.

KRISTI: We have since brought in a lot more brands.

KRISTI: Loyalty became kind of the business model.

KRISTI: It was a big shift for us.

KRISTI: It became our core product.

KRISTI: All of a sudden, the other kind of B2B services are just nice to have.

KRISTI: Most of our brands were taking them, but really they’re joining and they’re staying within our alliance because of what this loyalty program is bringing them.

KRISTI: Very much it’s allowing them to compete on the global front and have the global reach and to have a very low-cost alternative to running their program.

KRISTI: They can all do it in their own way and maintain their individuality.

KRISTI: We’re trying to educate our members that you can really indulge in these properties.

KRISTI: You say Anantara, the way that you just described that.

KRISTI: A lot of our brands are really having that same connection.

KRISTI: We have, on Condé Nast and Travel Leisure, we have the top hotels.

KRISTI: And they’re in our program.

KRISTI: And it’s so exciting because we have all these, and you can still get the benefits of recognition and rewards across all these different brands even though they’re not connected.

KRISTI: They’re not one program.

KRISTI: It’s independently owned.

KRISTI: A lot of them are privately owned.

KRISTI: And we’re bringing them all together so that you truly are getting your earn and burn and to your recognition and everything across all of those.

PAULA: So with that, obviously brings, dare I say it, complexity.

PAULA: And my own, again, interest has always peaked with, how much convincing have you had to do maybe along the last, I think you said 2010, so nearly 12 years now of your program.

PAULA: Like how convinced are the individual owners and brands about the power of loyalty?

PAULA: And the reason I ask that, Kristi, is we have people listening across all sectors.

PAULA: And sometimes it’s retail or even convenience retail, where there’s tiny margins or telcos, as I referred to.

PAULA: And most of the time, what we, well, certainly what I had to do was defend the investment in loyalty programs and prove the return on investment.

PAULA: And that can be very challenging for loyalty practitioners.

PAULA: So I think it’s sounding like you have, you know, that role to make sure that your brands are getting that return on investment.

PAULA: So I would just love to know, you know, how do they experience it?

PAULA: Given that it’s obviously part of, you know, being part of your alliance.

KRISTI: Yeah, no, very fair question.

KRISTI: And it’s slightly different from our perspective in that we’ve shifted.

KRISTI: We used to have fixed fees and variable fees.

KRISTI: And I will tell you what we’ve done now, because we’ve been able to see that it’s more effective this way.

KRISTI: And it’s also easier to answer that question of, is this working?

KRISTI: It’s paid for performance.

KRISTI: So if a loyalty member is staying, and let’s put it that way, if they’re staying, they’re paying us a fee.

KRISTI: If they’re not staying, we get no fees.

KRISTI: So if you run your own program, you do have to have the infrastructure and then the maintenance and the ongoing fixed fees.

KRISTI: So you’re spending essentially a couple million dollars a year minimum.

KRISTI: Now, if you’re just doing it with us, we already are doing that.

KRISTI: We’re doing that for other 40 brands.

KRISTI: So we’re paying all the fixed fees ourselves.

KRISTI: It’s just a matter of if we’re driving incremental stays to your property.

KRISTI: I say incremental because there is the way we approach it.

KRISTI: We don’t charge for enrollment stays.

KRISTI: It’s on repeat stays of which we’re driving that through our marketing channels.

KRISTI: They’re booking direct.

KRISTI: You have no other company on top of that.

KRISTI: That saves a lot of fees for brands and hotels.

KRISTI: And then there’s different ways of seeing it.

KRISTI: If it was the same hotel, so the customer’s loyal to that customer experience and they’re loyal to that hotel, potentially that brand as well, that’s a very, very, very tiny fee.

KRISTI: If it’s in the same brand, so let’s say Kempinski enrolled hotel and they stay in a different Kempinski hotel, same brand.

KRISTI: Again, there’s brand marketing that they’re doing that contributes.

KRISTI: Again, it’s a very low fee that we would just be doing for the infrastructure, the privacy, all the different stuff we’re doing on our end.

KRISTI: The part that we really focus the most of our efforts on and what a lot of our brands and hotels expect the most of and attribute very much to us is what we call cross brand.

KRISTI: This is where you enroll at a Kempinski and then you go stay at an Anantara.

KRISTI: Well, very likely, a customer didn’t know to do that without our program.

KRISTI: And our program really helped them do that through the different methods, the value proposition, our marketing.

KRISTI: And so by doing that, we have the higher fee for that.

KRISTI: And so that’s it.

KRISTI: But it’s still very low compared to an OTA or any of the other channels out there.

KRISTI: So that said, that’s kind of how we’re set up.

KRISTI: That’s our model.

KRISTI: And very much, brands are able to see because it is just for performance, they can see what that return is.

KRISTI: And our existing brands have all seen that very much it’s very profitable for them.

KRISTI: And that said, they’ve resigned their contracts.

KRISTI: We have a brand new program as well.

KRISTI: And I’m saying that because in December, we launched what we call 2.0 is the working name, but it’s just a new iteration of our J2 Discovery program.

KRISTI: And prior to that, our loyalty, our program was largely recognition.

KRISTI: It was you’re getting these hotel benefits throughout your stays, but at the higher tiers, you got what we’re called local experiences.

KRISTI: And this was saying, you know what?

KRISTI: Our brands and our hotels are so different.

KRISTI: They’re not points.

KRISTI: We hate points.

KRISTI: We still have the Challenger brand.

KRISTI: We’re not points.

KRISTI: But that said, we had to offer something different because we’re not trying to be like for like with these other programs.

KRISTI: Those other programs are very, you know, they’re doing what they’re doing well.

KRISTI: And if you like that hotel, we call them the cookie cutter hotels.

KRISTI: They’re diversifying a bit as well.

KRISTI: But if you like that, that exists.

KRISTI: You’re going to find that you’re going to be happy there.

KRISTI: We’re the ones who offer you something different.

KRISTI: We offer you something unique in terms of the hotel product.

KRISTI: But also our program had to be unique as well, so that they felt that that represented them best.

KRISTI: And it would appeal to the customer who would be staying there.

KRISTI: So that’s where we said, you don’t need to worry about points.

KRISTI: We’re going to give you a way to experience your surroundings more.

KRISTI: It’s an authentic experience, the hotel curated, and it varies by hotel.

KRISTI: So you couldn’t really explain it, but once you experience it, like, wow, this is amazing.

KRISTI: It was really high value because you couldn’t put a price to all these things.

KRISTI: But that said, it just touched about, in reality, it was only 4% of our active stayers were eligible and partaked in them.

KRISTI: So it was like, OK, well, we have something really cool, and it won, you know, dozens of awards for innovation and whatnot, but it wasn’t really the behavior shift that we needed, but to a large enough extent.

KRISTI: So that’s where we changed the value proposition in terms of making sure that we were able to reward through our program all of our members.

KRISTI: So then we said, OK, as of day one, our members have to be earning something, not points, we still don’t like points, but they have to earn something that helps enhance their experience.

KRISTI: And this whole pandemic thing is going on, and everyone’s needs are changing slightly.

KRISTI: So we just said, you know, if people want to experience more at our hotel, our hotels are amazing and they have all these different outlets.

KRISTI: They have all these spas and golf and the restaurants are Michelin star restaurants.

KRISTI: And so how do you make sure that’s part of the loyalty program?

KRISTI: Before it was only based on your stays and your rooms.

KRISTI: And now we said, you know what, everything across the hotel is included.

KRISTI: So you can earn and burn and it goes toward your tier status.

KRISTI: You’re earning these rewards that in the systems, the mechanism, it’s like points, but they’re not points.

KRISTI: It’s more like cash.

KRISTI: You call them discovery dollars.

KRISTI: So now we’re saying you’re earning discovery dollars.

KRISTI: And guess what?

KRISTI: You can use it to enhance your experience, however you choose.

KRISTI: So this is if you truly want those local experiences that we used to have, you can do that.

KRISTI: But it’s all members are now able to purchase those.

KRISTI: You don’t have to wait till these upper tiers.

KRISTI: But you purchase them with either cash, like actual normal payment tender, or with our reward currency, Discovery Dollars.

KRISTI: Or you can put it toward your room if you just want it to tour your actual room.

KRISTI: But we market it more of like, do you want to put it toward an upgrade?

KRISTI: Go ahead and get that suite.

KRISTI: Or if you’re going to dinner, go ahead and get that nice bottle of wine.

KRISTI: Go step up because the loyalty program is making sure that you’re getting rewarded for it.

KRISTI: Or you can even use your redemption on that.

KRISTI: So and all you do is just apply this at a time of checkout.

KRISTI: So it’s unlike points where there’s no matrix, there’s no time and blackout date.

KRISTI: It’s very much if you’re going to pay for something, here’s your reward currency for that.

KRISTI: That’s Discovery Dollars.

KRISTI: So I’m saying all of that because this now gave our brands and hotels a way to really compete.

KRISTI: Before we competed in a very kind of, you know, hard to define way.

KRISTI: And you have to explain what local experiences were.

KRISTI: But it was such a small subset of people it affected.

KRISTI: Now it’s saying, hey, I don’t want a points program, but JHA Discovery offers an equivalent of that.

KRISTI: That’s even easier for customers to understand, easier for them to redeem, more inclusive around the entire hotel and the entire network.

KRISTI: And now they feel we’ve only had three and a half months of operation.

KRISTI: But they feel it’s more competitive.

KRISTI: So there’s also this whole hypothesis, which we’ve had all the business modeling and actuaries are constantly re-forecasting for us.

KRISTI: We’re making sure the numbers align with what our expectations are.

KRISTI: But everyone, in addition to having a positive ROI historically, and now we’re seeing some really good numbers come in for the first part of operations of this new program, there’s a lot more belief in it.

KRISTI: There’s a lot more, okay, we finally can compete.

KRISTI: I don’t, they still don’t want points because points seem very commoditized.

KRISTI: It seems there’s a negative connotation to it.

KRISTI: There’s a lot of pain points, unintended points.

KRISTI: So it’s like, okay, we had to create something similar but better.

KRISTI: We still need the flexibility, transparency, one to $3 equals one US dollar.

KRISTI: So that’s pretty straightforward.

PAULA: Okay, yeah.

KRISTI: Not translated for or converted for local currency.

KRISTI: And so that said, we tried to make it better and make it more competitive.

KRISTI: And that’s also going to help in our story that you still have.

KRISTI: If you want points, a lot of our operators, our general managers and the hotel teams, they came from, well, it used to be Marriott or they came from a core.

KRISTI: And you’re used to points in these other programs.

KRISTI: You’re used to the flexibility that comes with that.

KRISTI: And so now that we have a program that offers the same, it really does help us compete, but in a slightly, again, in our own way.

PAULA: Yeah, I like the solution you came up with, Kristi, because I think we all do struggle with this, you know, points, good or bad, you know, because there is a level of jadedness about them.

PAULA: And yet they are a very well understood mechanic.

PAULA: And I don’t need to tell you that, you know, educating customers about a proposition is a huge requirement.

PAULA: Like, you know, back to your point about Google, it’s the fact that we don’t have to explain anything.

PAULA: So I think you’ve managed to find a really happy medium in that it has all of those characteristics without being labeled in a way that has the negative connotation.

PAULA: It’s actually very clever.

KRISTI: Yes, it opens up so many doors.

KRISTI: It really does.

KRISTI: Because when we didn’t have it for a decade, there was all these hurdles we kept hitting.

KRISTI: We kept saying, but we’re still different.

KRISTI: We’re different.

KRISTI: But at some point you realize, OK, it only goes so far.

KRISTI: And it made us step back and really reevaluate.

KRISTI: And it took customer research.

KRISTI: We did these focus groups in all these different regions.

KRISTI: And we had to hear from them kind of what they needed, which was generally they needed simplicity and transparency and value and equity, the fairness of all these things.

KRISTI: And we just thought about, we’re like, you know, our current proposition is not really touching on these.

KRISTI: And so how do we, you know, refocus and reshape?

KRISTI: And we did.

KRISTI: But I mean, from our roadmap perspective, the other thing we need to do and what every other program has done in some extent is to expand beyond your own offering.

KRISTI: So partnerships, right?

KRISTI: Partnerships has so much opportunity.

KRISTI: And when I say direct marketing is so cost effective, partnerships can be very cost effective.

KRISTI: And so that’s where, again, if you have an ability to do currency exchange, that’s where you open the door.

KRISTI: We’ve been doing tier matching for all this time, and it only goes so far.

KRISTI: And our previous board couldn’t have been exchanged because it was extremely, the value was very, you know, worry.

KRISTI: It was just such a high value.

KRISTI: You know, if something’s 500, the equivalent of 500 US dollars, that’s hard to exchange for a large subset of people.

KRISTI: So that’s where, again, currency exchange really opens up a lot of doors for program growth, ability to expand our offering to our members.

PAULA: Yeah.

PAULA: And I was reading as well that it is digital only.

PAULA: Am I right?

PAULA: You haven’t, for example, issued plastic cards like, you know, I still have.

KRISTI: No, we can’t now.

KRISTI: We wasted millions of dollars back in the day.

KRISTI: And 30 percent in China or Russia, you never got your card.

KRISTI: And yeah, yeah, we think that anymore.

KRISTI: For us, it wasn’t necessary.

KRISTI: And we have our our website and our app.

KRISTI: And at hotel level, they can look up anything on the front desk.

KRISTI: It can look up in the system.

KRISTI: So everything is OK.

KRISTI: Much handled.

KRISTI: Working best for us.

PAULA: And I’m just curious, Kristi, about the the role of the pandemic.

PAULA: You know, would you say that that was instrumental in, you know, driving change, for example?

PAULA: I mean, this is a huge project to take something that’s, you know, known and loved and trusted, albeit with limitations.

PAULA: As you said, it was so exclusive at the high end.

PAULA: And I think transformation is something we’ve all been talking about for such a long time.

PAULA: And, you know, we’ve all had those roadmaps and still do, of course.

PAULA: But this particular innovation in terms of scaling to, I guess, 100 percent of your members, do you think this was driven by changing consumer behavior through the pandemic?

PAULA: Or was it something you think would have happened anyway?

KRISTI: Yeah, I mean, you know, very convenient for us.

KRISTI: We started this project.

KRISTI: We started an exploratory in February 2019.

KRISTI: This was a year prior to the pandemic.

KRISTI: We were starting it because we saw, I mean, it was kind of the trifecta of, you know, in our reporting, we could see in the customer metrics that things were starting to, the numbers were starting to take a, were plateauing.

KRISTI: It was still a positive story, but if you looked at it, you know, one example, like, you know, the repeat stays, the numbers going up and up.

KRISTI: If you look at it that way, it looked very positive.

KRISTI: If you looked at repeat stayers, the people who were doing it, that was, the growth was either diminishing or it was going down.

KRISTI: So all of a sudden, that was a negative.

KRISTI: We had kind of a new lens on the reporting, and it allowed us to see that, you know what, we’re not looking as good as we thought we looked, or it was that as well as we were truly maturing.

KRISTI: It was a decade old in our program growth that used to be, you know, 50% year-over-year growth and 35 and 25 and 20.

KRISTI: And we can see that this was plateauing, and our shareholders, you know, we want, and we’re also like a startup.

KRISTI: We like to act like a startup.

KRISTI: We want to see the big growth every year.

KRISTI: So we had that.

PAULA: Yeah.

KRISTI: And then additively, we saw everyone else kind of entering our space.

KRISTI: Well, two ways.

KRISTI: One, there was the consolidation.

KRISTI: That’s where Bonvoy was going all in, and then Accor was going all in with Accor Live One List.

KRISTI: But they were all just getting big.

KRISTI: So the consolidation was making it more and more that we were competing with these global programs.

KRISTI: And they were so loud with their spend.

KRISTI: And OTAs were spending billions of dollars of spend.

KRISTI: And so customers were seeing more and more of those at the forefront.

KRISTI: So we knew we still had to continue to innovate, to stand out, to be different in our own smaller way.

KRISTI: And then the third one was truly that we had people entering experiences space.

KRISTI: We said we were always unique because we had these local experiences.

KRISTI: We had all those other programs, including the OTA, Online Travel Agents, who were coming and offering experiences.

KRISTI: Now, they weren’t doing what we were doing.

KRISTI: They were doing something, though, and they were doing it much louder.

KRISTI: So people just used them.

KRISTI: And all of a sudden, everyone was on our side.

KRISTI: And the fourth thing, actually, was that we had new shareholders coming in who believed in what we were doing and the trajectory.

KRISTI: And they gave us an influx of capital to go invest in the program, larger than we usually would.

KRISTI: Our OPEX was very relatively small.

KRISTI: And this is all of a sudden a great opportunity to do something big.

KRISTI: So we all agreed on the shareholders’ approval to do an exploratory with customer research, just have an understanding of what people wanted back then.

KRISTI: We called it Discovery 2025 because we were saying, what do you want now, but what do you think you want in five years?

KRISTI: And so that said, we were trying to look for it.

KRISTI: No one knows what they need in five years, but we were just saying, try really hard.

KRISTI: And we were trying to understand it was cross industry.

KRISTI: It was not about hospitality.

KRISTI: We wanted to just understand the trends that are there.

KRISTI: The themes that were emerging across regions and see if there was a red thread across them.

PAULA: Yeah.

KRISTI: And we did that.

KRISTI: We crafted the program, all that.

KRISTI: Well, then we are meant to be signing.

KRISTI: We started, we did the business requirements.

KRISTI: We did the project plan.

KRISTI: We hired some team members.

KRISTI: We had everything laid out.

KRISTI: We were going to launch this program in a year.

KRISTI: And that was already extremely ambitious.

KRISTI: And then all of a sudden in January of that year, 2020, was when it started hitting China.

KRISTI: And we have a very big presence in China.

KRISTI: We have, I mean, a million members there.

KRISTI: So that was starting to hit us.

KRISTI: And then we watched it little by little by March.

KRISTI: It affected everyone.

KRISTI: So that’s where it was like, okay, guys, go ahead and keep doing what you’re doing, but don’t sign any vendors.

KRISTI: Don’t spend any money, but go ahead and launch a program.

KRISTI: It’s like, okay, hang on.

KRISTI: How are we going to do this?

KRISTI: And then we also kept, you know, in hindsight, you know how long it took.

KRISTI: But at the time we’re like, oh, well, this will pass in a month or two months.

KRISTI: So let’s see what we can do.

KRISTI: Let’s put it on hold for a little bit.

KRISTI: It was a day by day kind of pivot or shift and trying to understand what do we do, but everyone still believed in it.

KRISTI: And so a lot of it was just keeping the momentum going.

KRISTI: And it became more and more relevant.

KRISTI: What we were doing, a lot of our program, I was talking about the reward currency, but that also gives you flexibility.

KRISTI: And so for our members, they want more and more flexibility.

KRISTI: That’s becoming more relevant.

KRISTI: But the other thing that was really cool that was emerging was a concept that we had deemed back in 2019, we crafted it, Live Local.

KRISTI: And this is the whole thing of, you know, at our hotels, you’re welcome with or without a stay.

KRISTI: If you’re just a local member and you’re around our hotels, go in for a drink at the bar, you should be awarded for that.

KRISTI: We should be bringing you in to come into our restaurant, to come into our business center, come into our lounge, use the pool, use the gym, use the beach access.

KRISTI: All of this previously was limited to people who stayed at the hotel, because that’s how the business works.

KRISTI: But then it became a matter of, well, why don’t we open up to locals?

KRISTI: And then during the pandemic, that’s 100% what you had to do, because no one was traveling.

KRISTI: And it became, hey, please come take advantage of our hotels.

KRISTI: And as a member, you’re getting these, you know, offers or free drinks for the first hour or whatever it is.

KRISTI: And then our hotels really needed to rely on that.

KRISTI: And then more and more that was, that became much more relevant.

KRISTI: And so that was interesting of how do we, you know, get more involved with that.

KRISTI: Again, from a marketing angle, there are a ton of markets.

KRISTI: We have 800 hotels soon to be, there’s about 500 locations to have marketing for.

KRISTI: If you used to do something sitting in Dubai, which is our headquarters, I know you’re there as well.

KRISTI: But if you’re doing that from one location, you know, you can do things at scale, and it might not be as relevant, but you got away with it a little bit.

KRISTI: Well, now you can’t.

KRISTI: If it’s local marketing, it’s really hard to market locally.

KRISTI: If you don’t have someone sitting there doing it, making sure the content’s extremely on it, timely, it has to be done the same day.

KRISTI: You can’t say, I need this three weeks in advance, or we’re still trying to figure out that whole aspect.

KRISTI: But I feel all of the proposition we designed became more and more relevant in recent years.

KRISTI: And it’s still very much as needed.

KRISTI: The hard part for us was we had this one final product we want to deliver.

KRISTI: And because of the pandemic and how we had to space things out and how things materialized, we’ve had to break it into phases.

KRISTI: So then it became a roadmap and it became what is critical for recovery now.

KRISTI: As our hotels need people coming in, we need the Discovery Dollar currency first.

KRISTI: There’s a few other components coming that we haven’t been able to launch yet because it just takes a lot of focus and investment.

KRISTI: And we had to phase it out to make sure we could still deliver the first part in the timing that we did.

KRISTI: It did take longer than we wanted again, because there were so many factors.

KRISTI: There was people not working, the hotels were closed.

KRISTI: There was no one to train on the new program.

KRISTI: You can’t launch a program if no one’s there.

KRISTI: So you can’t launch a program if no one’s trained on it.

KRISTI: Like there was just simple things like that.

KRISTI: So I feel like we all were in it together for the two years and keeping the momentum going, keeping our vendors on board, even though we had no cash to pay them for a while, they were very, they worked with us.

KRISTI: We were all in it together.

KRISTI: And so I feel like we did design something great.

KRISTI: We didn’t have to change it too much.

KRISTI: We just had to space it out and really have to figure out the cash flow of what we were doing and kind of resource management all throughout.

KRISTI: But that was really tricky.

KRISTI: I don’t recommend having another pandemic because we’re launching a program during it.

KRISTI: That was tricky.

KRISTI: So I’m glad that it’s behind us now.

KRISTI: And now, I mean, well, hopefully behind us, a lot of it’s behind us.

KRISTI: And so we’ve been able to deliver, though.

PAULA: It really is extraordinary.

PAULA: As I said, I haven’t worked in Hotel Loyalty and none of us have been through a pandemic.

PAULA: So it’s extraordinary to hear how things get impacted.

PAULA: And I’m thrilled that you are getting to deliver the proposition of Discovery Dollars that you wanted, even if it is spaced out.

PAULA: And I was looking at your numbers there as well, Kristi, just before we came on.

PAULA: So it says, soon to be 20 million members driving over $2 billion in revenue and 85 industry awards for marketing and program innovations.

PAULA: That’s all amazing.

KRISTI: Thank you so much.

KRISTI: Yeah, I keep saying soon to be.

KRISTI: We have NHL hotel group is coming.

KRISTI: They’re going live in June.

KRISTI: So soon to be.

KRISTI: They’ll bring in three brands.

KRISTI: They bring in a large group of members.

KRISTI: So you’ll see some numbers right now that are a little like, hang on, why are these numbers not adding up?

KRISTI: It’s generally today in operation, there’s one set of numbers by June, which is only two months away.

KRISTI: We’re going to have that set.

KRISTI: But we’ve been, they’re huge.

KRISTI: There are 360 hotels.

PAULA: It’s huge.

KRISTI: They’re almost as big as we were.

KRISTI: And so if you come to come in, that’s a lot.

KRISTI: That’s been years in the making of planning out all of their systems integration, all their marketing integration.

KRISTI: They have a very successful program called NH Rewards.

KRISTI: It wins the number one hotel program in many different categories as well.

KRISTI: And we had to make sure that what we were doing was adding value to their program, to their members.

KRISTI: We did not want to dilute it.

KRISTI: They were not going to let us dilute it as well.

KRISTI: And we had to make sure that we were really thinking through everything and being methodical in our approach.

KRISTI: And they’ve been they’re coming on in a couple of months.

KRISTI: And so they’re going to help make those numbers look a lot better.

KRISTI: But it used to be $2 billion top line.

KRISTI: By the way, it’s still $2 billion because of the pandemic.

KRISTI: It hasn’t gone up much.

KRISTI: We’re really starting to see a lot more pick up to 2019 numbers.

KRISTI: But yeah, it used to be at this point, we should have been at $3 or $4 billion.

KRISTI: But yeah, we took a little pause there, but we’ll get there.

PAULA: Yes.

PAULA: And tell me then, when should we expect to hear news?

PAULA: I’m sure I won’t be the one doing the breaking news for you.

PAULA: But given your your phased rollout, what kind of timeframes, let’s say, are we looking for for the next phase of your evolution?

KRISTI: Yeah, I think the biggest one that we’re working toward and we have different ways to get there, we’re trying to essentially we’re trying to roll out, truly earn and burn without a stay.

KRISTI: So right now we have a lot of different.

KRISTI: Yes, a lot of different aspects to this live local thing I mentioned to you, where you can still today in this year, go to our hotels and get discounts on your on your dining.

KRISTI: You can get spa treatments.

KRISTI: There’s things called local offers where they package it a certain way.

KRISTI: Right now, if you’re not staying at the hotel, you’re not earning that discovery dollar reward currency.

KRISTI: You can still have the experience as an access to stuff.

KRISTI: You get offers and promotions, but you’re not earning and burning our reward currency on those things, because that’s 10,000 POS systems to try to integrate.

PAULA: Totally.

KRISTI: We want to consume the lead on an app or phone, but again, you still need to have aspects of either training for 150,000 waiters that were hired yesterday.

KRISTI: Or there’s different aspects.

KRISTI: There’s a few ways to approach it, and we keep looking and talking to so many startups, and hey, can you get us there?

KRISTI: And no one’s figured it out.

KRISTI: All the other programs have things that’s only in the US, or it’s only in this one tiny market.

KRISTI: We need something global.

PAULA: Yeah.

PAULA: Yeah.

KRISTI: And so we’ve been extremely curious and trying to find better alternatives, but it’s such an undertaking just because of the scale.

KRISTI: I mean, we have these hotels, just getting their PMS, the front desk systems integrated for this first stage, was a huge undertaking.

KRISTI: And so to do this times all of the outlets, they have all of these different systems, and they’re truly on different systems, different.

KRISTI: Every single one has its own, you know, something might be Opera, might be Infor, might be GuestCentrics.

KRISTI: There’s all these different ones, and they have different versions and blah, blah, blah.

KRISTI: That said, the complexity there is on steroids, and we’re aware of that, and that’s why no one else has really done this.

KRISTI: We still, we’re the challenger, we’re happy to do it.

KRISTI: We just have to make sure we’re aware of the resources needed for that.

KRISTI: So bringing in NH Hotels has been our focus this year.

KRISTI: We want to make sure they’re up and running, that they’re successful, and that we have a successful operation of them for the first few months over the summer.

KRISTI: And then our efforts are very much going to be making sure we get this next stage right.

KRISTI: And so hopefully early next year is when we’re going to be rolling out the ability to have our Discovery Rewards currency at our hotels without a stay.

KRISTI: And then the world is our oyster after that, expanding on to partnerships and everything else.

KRISTI: And so, so yeah, a lot.

KRISTI: And everyone’s excited for that.

KRISTI: We wanted that as part of our original go.

KRISTI: And it’s just going to take some time.

PAULA: I totally get it, Kristi.

PAULA: And I have put a note in my diary to follow up and reschedule with you.

PAULA: So I’ll be holding you accountable if nothing else, which I know you’ll be doing yourself anyway.

PAULA: But it is a wonderful story.

PAULA: As I said, I’m delighted to have discovered the sheer scale of what you’re doing globally.

PAULA: It’s truly an inspiring story.

PAULA: And I think I’ve asked all of my questions from my side, Kristi.

PAULA: Were there any other kind of key points you wanted to mention for our listeners around the world before we wrap up?

KRISTI: I mean, not key points.

KRISTI: I just think one thing in the in a discussion we had a couple weeks ago, there was something that was in DRIF.

KRISTI: I think about loyalty, I think a fun stat there.

KRISTI: At one point, you guys were saying, hey, what’s your favorite loyalty statistic?

KRISTI: And something I find, I love things that are surprising.

KRISTI: And so with loyalty, you know, what’s interesting, especially in hospitality, we give something called member rates.

KRISTI: And that started back in the day with, it was a channel shift.

KRISTI: We wanted people to book direct.

KRISTI: If you’re booking an online travel agent, you know, a hotel might be spending 20% commission on that.

KRISTI: And the guest has no idea.

KRISTI: And that’s a bad experience when you book at the hotel.

KRISTI: But that said, like, there’s, everyone wants people to book direct.

KRISTI: And our program helps them do that, because then they get the recognition of the loyalty program.

KRISTI: What’s interesting is you’re giving members in hospitality, a member rate is usually 10% off.

KRISTI: On our channels, you get 10% off the best available rate.

KRISTI: And so your first hunch would be, okay, well, you’re cannibalizing a rate.

KRISTI: They were going to book the higher rate, and now they’re getting 10% off.

KRISTI: So you’re actually reducing your revenue by that much.

KRISTI: And the reality is, which is fascinating, our loyalty members who book member rates, which are 10% off, still spend 10% to 15% more than members or non-members who don’t book member rates.

KRISTI: And it’s like, okay, well, that is the fascinating thing about loyalty, is that we did change their behavior.

KRISTI: They’re booking direct, number one, and number two, they’re booking their room categories, or they’re booking a member rate instead of this kind of non-cancellable prepaid rate, which was even more discounted, or you still are doing something that’s counterintuitive.

KRISTI: You’re like, well, you’re just diminishing the rate.

KRISTI: It’s like, actually, we got a much higher rate.

KRISTI: You got a 20% delta here, and it’s a loyalty member who did this.

KRISTI: And so it just reminds me of loyalty members spend more, not just customer lifetime value, which is what people are focusing on, but even in the short term, even the simple interaction like transactions, that’s happening.

KRISTI: And so I think that’s pretty fascinating.

KRISTI: Again, if you don’t know enough about loyalty, if you don’t have enough metrics or experience to look at, that is pretty interesting.

KRISTI: We’re seeing that across our, we have 35 brands currently, 37 actually, but that’s it.

KRISTI: If you look at that, it is consistent.

KRISTI: We’re seeing that we try to do case studies by market, and it’s consistent.

KRISTI: These members are booking a lower rate, give them advanced access to flash sales and all that, and they still are spending more on that transaction and then overall on repeat.

KRISTI: So that’s pretty interesting.

KRISTI: But the more fun stuff, I mean, that’s just kind of behavior and spend, but I mean, as a marketer, the engagement metrics are really fun too, because if they’re loyalty, you have a lot more ability to capture them.

KRISTI: You get the consents early on.

KRISTI: You have a lot more excuses to talk to them, so you can tell them about an account summary, and then you can throw in some emotional, as long as the ratio is there.

KRISTI: And again, with the cookiness, like if you’re going from marketing ones, the cookie list future, it’s first party data.

KRISTI: And so you not only are collecting it, therefore you can use it.

KRISTI: You can also store it in a way that can be used for reporting.

KRISTI: You can use it for personalization of content.

KRISTI: You can use it for all these different things.

KRISTI: And so loyalty just makes everything so much easier.

KRISTI: So again, obviously I’m a fan, and that’s what our business is.

KRISTI: But I feel like when you say to some people, you don’t know about hospitality, but a lot of people maybe don’t know that much about all the different kind of legs of loyalty.

PAULA: Yeah, yeah.

PAULA: It’s wonderful, Kristi.

PAULA: I love talking to people like you, who clearly love what you do, and ask the right questions.

PAULA: Because to go back to my earlier point, a lot of the time we’re defending spend, or we’re really having to convince people that it’s a worthwhile investment.

PAULA: So with those kind of deltas that you talk about, there’s actually credibility there.

PAULA: You know, it is a business.

PAULA: This is not something we’re doing, you know, just to be fluffy or even to keep up with the competitors.

PAULA: There’s genuine, compelling, increased spend and how we attribute it and measure it and all of those things.

PAULA: I know they’re complex, but they have to be talked about.

PAULA: And we have to admit that we mightn’t have 100% clarity on how to achieve that.

PAULA: But if you don’t invest in taking care of your customers this way, you’ll definitely never get it.

PAULA: So it’s a great story.

PAULA: As I said, I’m definitely putting a note in the diary now so we can make sure to have you back on the show next year.

PAULA: So with that, I just want to say, Kristi Gole, Vice President and Head of Product for Global Hotel Alliance, thank you so much from Let’s Talk Loyalty.

PAULA: This show is sponsored by The Loyalty People, a global strategic consultancy with a laser focus on loyalty, CRM and customer engagement.

PAULA: The Loyalty People work with clients in lots of different ways, whether it’s the strategic design of your loyalty program or a full service, including loyalty project execution.

PAULA: And they can also advise you on choosing the right technology and service partners.

PAULA: On their website, The Loyalty People also runs a free global community for loyalty practitioners.

PAULA: And they also publish their own loyalty expert insights.

PAULA: So for more information and to subscribe, check out theloyaltypeople.global.

PAULA: Thank you so much for listening to this episode of Let’s Talk Loyalty.

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