A study of hotel frequent-guest programs: Benefits and costs

Currently, frequent-guest programs have been widespread among most of the major hotel groups around the world. However, despite the fact that hotels annually spend millions of dollars to deliver free membership benefits as a means to acquire and retain hotel guests, a number of criticisms persist on too much sameness within these programs. Since it is expensive to maintain frequent-guest programs, the benefits should be carefully designed in order to control their relative costs. Thus, this study draws on in-depth interviews of 18 hotel professionals to investigate the benefit and cost structures of six mainstream frequent-guest programs worldwide. The key elements of membership benefits were structurally compared and developed into a benefit taxonomy with three levels: core benefits, partially common benefits, and individual benefits. The dichotomous analysis on program costs has found that major tangible and intangible costs exist at the property level. Findings have likewise revealed the current performance monitoring mechanisms and administrative logistics of frequent-guest programs, as well as their operational implications to hotel management.