A new concept that took flight this year was the airline-hotel loyalty program partnership.
Hotel programs have long offered the ability to earn airline miles for stays. Hotel programs have also pitched airline elites with complimentary status in the hopes of luring business. There have been points transfer bonuses, and other tie-ups like even the ability to earn Delta elite qualifying miles through Hilton stays.
But what was new year this was the closer relationship — both points-earning and elite-recognizing — in exclusive one-on-one partnership between airlines and hotels.
Delta and Starwood introduced Crossover Rewards at the beginning of the year and then added it to in the late summer with complimentary upgrades at the gate on Delta for Starwood Platinums.
United and Marriott hooked up with RewardsPlus, Marriott Platinums getting United Silver and United Golds and above getting Marriott Gold.
Now the game changes to musical chairs. In an industry where one program tries to copycat the other, and quickly mimics the plays of any first-mover, the question becomes — which airline and hotel chain will hook up next? And which one will be left without a partner when the music stops?
They’re definitely thinking about it.
Russell D. passes along the following from a survey he took this week from IHG Rewards (formerly Priority Club).
IHG Rewards Club airline loyalty partnership
Elite members earn miles with airline partner when you stay at the hotel, in addition to earning hotel points
Elite members earn points with hotel partner when you fly, in addition to earning the airline miles
With elite status in the hotel program, earn higher status with the airline loyalty program
With elite status in the hotel program, get benefits with the airline, (e.g., priority check-in, early boarding, free checked bag), regardless of your airline program status
With elite status in the airline program, earn higher status with the hotel program
With elite status in the airline program, get benefits when staying in the hotel (e.g., priority check-in, late check out, free internet), regardless of your hotel program status
But whom could they partner with?
Since Starwood and Marriott, United and Delta, appear ‘off the board’ the possible partners are somewhat limited.
There’s been speculation about an American-Hilton tie-up. It hasn’t happened, and that could be telling, but it could also be one of the many things seemingly endlessly delayed by American’s bankruptcy and merger uncertainty. I’d expect to see plenty of activity over at American and AAdvantage in the coming months.
It’s hard to see where else American could go. For instance, Hyatt Gold Passport is a great program and might be my pick if I were running AAdvantage, but is the Hyatt footprint big enough for what’s becoming the world’s largest airline?
On the other hand, does a full service airline and a program concept linking up primarily at the elite levels make any sense with IHG? Their Platinum level really doesn’t come with meaningful benefits to offer. They’ve got a separate Ambassador program for their small subset of Intercontinental hotels, but for the larger worldwide portfolio there isn’t a ton on offer.
There aren’t enough full service Radissons to make Club Carlson a logical choice, either.
For IHG, with the number of mid-scale and limited-service properties they offer, a relationship with Southwest Rapid Rewards could make more sense… although obviously that’s limited in scope as Southwest doesn’t operate on the worldwide scale that IHG brands like Holiday Inn do.
If I had to guess – based on no inside knowledge of discussions – I’d predict IHG and Southwest best match to become partners.
There aren’t a ton of full service large-scale hotel options left now that Marriott and Starwood are out of play. And American is the lone big dish global US airline sans a partnership. It will be interesting to see who does a deal next.
And it will be similarly interesting to see whether these deals ultimately last for reasons other than inertia, and they are no doubt costly to offer — and are an open question as to whether or not they effectively sway high spending frequent traveler business.
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These are new programs, is there anything public yet about the internals of how they work, are payments made from one partner to the other, etc? What I’m wondering is, are the deals necessarily exclusive? Just because Delta partners with Starwood, does that prevent them from also partnering with IHG if they wanted to?
What’s more concerning from the survey is the idea that IHG is considering a system where there are no points and you earn nights just based on the number of nights you stay. That would mean no more Points Breaks, Flash Sales, or Big Wins.
@swag I’m sure exclusivity is built into the agreement.
This would be great since I just qualified for Hilton Diamond and am looking to put some flights on American Airlines in the next year.
I predict Frontier and Wyndham. 🙂
Gary – If I am not wrong United Gold and above get Marriott Gold and NOT Marriott Platinum
does anyone know if the Marriott United deal extends to Ritz Carlton members?
i could see IHG going with American, largest hotel group with what may well be the world’s largest airline, or a hybrid offering of American and BA
I have a tough time seeing American NOT partnering with Hilton. As stated above, American is too big to ally with Hyatt–just not enough Hyatt properties out there. Hilton offers tons of hotels to match American’s soon-to-be immense flight network. Hilton offers Waldorf and Conrad as top property options, along with plenty of full-service and more budget options for its frequent flyers. With Starwood inked with Delta and Marriott inked with United, Hilton must be interested in partnering with American now, even more than American might be interested in doing.
The real question is what can Hyatt do if Hilton does partner with American. Hyatt could try to partner with one of the big airlines, but I doubt the hotel partner already inked would agree. Hyatt is more likely to partner with Alaska in my opinion, and perhaps JetBlue, as well–giving it multiple options that no other hotel chain can match in that regard. Or Hyatt can try to increase its points rewards for that particular airline to make it more valuable than the other partnerships.
I also agree that the most likely option is a Hilton American partnership. One thing that Startwood and Delta have in common is Amex. Same thing with Marriott and United having Chase as a common credit card partner. Hilton (partially) and American have Citi in common. I’m not sure if this is coincidence or not, but credit card partners are certainly a large part of loyalty programs.
Remember, these are marketing agreements, essentially. So guarantees don’t matter as much as shiny titles and substance; many travelers don’t even know what’s guaranteed with their elite status and what’s not. Furthermore, I think you sell IHG short in the actual substantive benefits dept. I almost always get excellent, excellent service as a Plat at CPs and HIs. Just last night got upgraded to Executive Suite with Jacuzzi at the Holiday Inn Effingham, IL. Also, a HI let me cancel my res with no penalty at about 2 am when I was too tired to drive all the way, because I was a Platinum. I had one IHG agent tell me the other day, “Wow! I’ve never talked to a Platinum before!”
IHG + BA makes a lot of sense to me.
But I would prefer IHG + Southwest, especially if there was some linkage between the IHG world and the SW companion pass
I had posted a few days ago that I think American would partner with IHG after seeing that survey. With the other companies doing well in their partnerships, I think this is just a matter of time.
@avinash – typo on my part, fixed
I’m pretty certain I heard that United was dropping Marriott and picking up Motel 6. Smisek said it’s a change we’ll like.
IHG and Panam were once deeply in bed together in some way. Who would be the US successor to Panam?
Pan Am founded InterContinental Hotels (largely to provide high-end lodging across their route network).
The Pan Am network is split between United (Pacific Routes) and Delta (Atlantic Routes).
Historical ties don’t dictate these partnerships of course — United used to own Westin hotels, yet Starwood partnered with Delta..
I agree with the BA + IHG partnership. I could see Delta and Marriott together for some odd reason.
How about Motel 6 + Spirit
or Days Inn + Spirit
or….wait for it…Amtrak + Travelodge