Hospitality loyalty programs tend to fall into two broad categories:
Points-based frequency programs where the guest earns points based on spend or stays than can be exchanged for rooms or other benefits
Recognition programs where guest preferences are captured, retained and communicated throughout the brand and utilized to enhance future visits
The intent of both types of programs is drive customer loyalty and to make the guest want to continue to choose to stay at that brand’s hotels again and again. Many observers eloquently argue that points-based programs have become a commodity and are merely a cost of doing business now, since all large chains have them. Not having one becomes a negative attribute, but having one is simply the price of entry.
In this article, we assert that both varieties of programs have their place, including points-based, and that different organizations establish different programs according to their size, competitive posture and other attributes. These choices lead to other decisions about what technology to deploy and how to administer it.