An analysis of the impact of the Priority Club Rewards programme on the Crowne Plaza Auckland Hotel's revenue development performance
Gualberto, Renato H
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In 2004, 6% of the Crowne Plaza Auckland Hotel's guests were Priority Club members. Two years later, this number has more than doubled to 13%. Are the Priority Club guests contributing to leverage the hotel's profitability? This research is aimed at answering the question if the continuous increase in the number of Priority Club guests staying at the Crowne Plaza Auckland Hotel is an opportunity for the property to effectively optimise its revenue generation performance. The study is essentially focused on assessing the ability of the loyalty programme to generate revenue to the hotel. The Priority Club Rewards is a demand-based, revenue-orientated marketing strategy which is predominantly aimed at 1) promoting and attracting its 30 million members worldwide to stay at the company's extensive portfolio of hotels as well as 2) to entice the club members to spend money on the hotels' services and facilities. In return for their loyalty, these customers are entitled to receive benefits that correspond to their membership level. From a revenue management perspective, the programme exists to strategically help hoteliers not only to achieve higher occupancy levels through repeat visits from the club members but to also leverage the hotel's revenue generating performance through encouraging its members to not only stay in suites and club rooms but also to use the property's services and facilities more regularly. In other words, the objective of the Priority Club Rewards is to help hoteliers attract customers to their properties and at the same time encourage them to spend money whilst onsite. It was found that the Priority Club programme is fulfilling its first core objective, which is to bring more customers to the Crowne Plaza Auckland property. Hence, this research is predominantly focused on assessing the rewards programme's ability to also assist the Auckland hotel to increase profitability. The objective of this project is to analyse whether or not the increasing growth in the number of club members staying at the property can also be interpreted as a growth in the hotel's revenue generation performance. Firstly, a thorough review of the literature was conducted in order to identify any previous academic work that specifically analysed the relationship between the areas of revenue management and loyalty marketing. However, no extensive previous research was found that effectively analysed how these two fields interact with each other, particularly in the hotel industry. Nevertheless, research from Internet articles and other web-based media resources was highly beneficial to the success of this research. There were two data collection processes employed in this research: a Priority Club Survey identified the needs and preferences of the club members when staying at the Auckland hotel and, secondly, a Spending Pattern Analysis was conducted based on the hotel guests' account statements. The results from these two research methods were then carefully analysed and interpreted in order to achieve an accurate set of resourceful conclusions and recommendations.