IHG revamped its loyalty program and travelers noticed; 11 million new members signed up
The refreshed and renamed loyalty program at IHG Hotels & Resorts attracted tons of new members in the first few weeks following its debut.
IHG first announced changes to its elite status tiers in early 2022, but the launch of the program — IHG One Rewards — and the official rollout of its new perks didn't arrive until late spring. The new program isn't as perfect as IHG leaders would have you believe (hotel lounge access is no longer included in club-level room and suite upgrades), but it certainly appears there is traveler curiosity about what IHG can bring to the loyalty race.
The program, which has more than 100 million members overall, added 11 million new members in its first nearly two months of operation (a 30% jump in enrollments), IHG CEO Keith Barr said on an investor call Tuesday.
"The loyalty contribution is a complex issue because it's not just about the program," he later added. "It's about the brand portfolio. It's about the overall quality of your assets. It's about the geographic mix, [and] I think we've been addressing all those things."
You can read all about the new benefits included in IHG One Rewards here. Some of the biggest changes include improved perks such as free breakfast as a welcome amenity for Diamond Elite (IHG's highest loyalty tier) members, exclusive reward night discount promotions for Diamond Elite and Platinum Elite members, and complimentary upgrades for both of these tiers.
The new iteration of IHG's loyalty program also includes milestone rewards every 10 nights, beginning with the 20th night stayed in a calendar year.
Barr indicated there already have been 14% more points redeemed in IHG One Rewards and 18% more reward nights booked.
"Our loyalty members are our most valuable guests," he added. "They account for half our room nights, spend 20% more than nonmembers and are nine times more likely to book direct, which is the most profitable channel for our owners."
Brand buildout
As Barr mentioned, a key component of wooing new members to the loyalty program is featuring brands they actually want to stay at. IHG's best-known brand family, Holiday Inn, is certainly popular but doesn't exactly elicit the same kind of points redemption excitement as, say, a St. Regis in the Maldives.
Sure, the company also boasts the luxury InterContinental brand, but Barr highlighted how IHG leaders have worked to fill in the gaps when it comes to brand offerings.
"Back in 2017, we identified white spaces in our portfolio where we could see a clear path to address long-term consumer trends and capitalize on notable sustainable growth opportunities," he said.
The company added Avid, Voco, Atwell Suites and the Vignette Collection in recent years. IHG also acquired luxury brands Regent and Six Senses. This comes on top of ongoing growth initiatives at brands such as Hotel Indigo and Kimpton.
"Having a complete brand portfolio from luxury and lifestyle, from Six Senses to InterContinental through mainstream and premium makes you more compelling from a loyalty program perspective," Barr said. "So, if you've got big gaps in your portfolio, then you're less appealing to certain segments of customers, too."
A US business traveler rebound
One of the strongest talking points IHG leaders discussed on their investor call was the revival of business travel in the U.S. Room rates for business travel exceeded 2019 levels every month since March while demand also steadily increased, Paul Edgecliffe-Johnson, IHG's chief financial officer, said.
IHG can, in part, chalk this up to its mix of roadside hotels — Holiday Inn Express is particularly a massive revenue driver for the company — which appeals to business travelers who have to be on the road and don't have the luxury of working remotely from home.
Either way, a win is a win.
"There remains further potential for business travel recovery, especially within the meetings, incentives, conferences and exhibitions segment," Edgecliffe-Johnson said. "And as with leisure demand, we see no indicators that the recovery trajectory is abating."
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