Hilton HHonor
Case Problem
The Sheraton and Westin hotel brands combined to form one company and instituted a $50 million ad campaign for a new “aggressive” loyalty program. The new merger solved many problems that the individual companies had faced and allowed Starwood to become a major competitor for Hilton Hotel Corporation and Hilton International. The increased spending by Starwood on its loyalty program reduced the cost-‐effectiveness of the Hilton HHonors program, and in an industry that rewards economies of scale, Starwood is forcing Hilton to decide how to contend with a new power in the industry and what competitive advantage the Hilton HHonors loyalty program can derive over its competitors.
Problem Solution
Loyalty programs are crucial to the hotel industry because they allow a hotel brand to build and maintain its customer base, which allows the hotel and the customer to benefit from their continued business. The loyalty program increases the hotels ability to operate above occupancy, increases cash flow, customizes the customer experience, and rewards profitable customers.
At the blue membership level of the HHonors program if a
The Sheraton and Westin hotel brands combined to form one company and instituted a $50 million ad campaign for a new “aggressive” loyalty program. The new merger solved many problems that the individual companies had faced and allowed Starwood to become a major competitor for Hilton Hotel Corporation and Hilton International. The increased spending by Starwood on its loyalty program reduced the cost-‐effectiveness of the Hilton HHonors program, and in an industry that rewards economies of scale, Starwood is forcing Hilton to decide how to contend with a new power in the industry and what competitive advantage the Hilton HHonors loyalty program can derive over its competitors.
Problem Solution
Loyalty programs are crucial to the hotel industry because they allow a hotel brand to build and maintain its customer base, which allows the hotel and the customer to benefit from their continued business. The loyalty program increases the hotels ability to operate above occupancy, increases cash flow, customizes the customer experience, and rewards profitable customers.
At the blue membership level of the HHonors program if a