TakeAway: Responding to the sharp decline in rates consumers will pay for luxury hotels during economic hard times, Ritz-Carlton will join airlines, credit-card companies, and many other hotel chains in offering a loyalty program to its customers.
“Ritz-Carlton Rewards” will let guests earn free nights at other hotels.
The high-end chain had long held that its customers weren’t interested in anything as pedestrian as “points,” but the recession has hit luxury hotels even harder than the rest of the industry.
The new points program is one of a number of actions taken at Ritz hotels to try to attract more business and leisure travelers.
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Excerpted from the Wall Street Journal, “Ritz Carlton Bows to Recession, Adds Rewards” By Alexandra Berzon,September 14, 2010
“We always said in the early days, we’re not going to give you a toaster, we’re going to give you service,” said Ritz President and Chief Operating Officer Herve Humler. “That was part of the philosophy.”
The occupancy problems for luxury hotels have been compounded by what is known within the hotel industry as the “AIG effect“: Corporations that were the beneficiaries of taxpayer dollars or were laying off workers were criticized by politicians for booking expensive conferences in luxury resorts, and so they started to pull back. Recently, that problem has begun to ease slightly.
Even before the recession, the Ritz found it necessary to make changes in its high-class veneer, becoming more relevant for younger generations that were put off by the traditionally stiff service at many of its hotels.
That led to such changes as making the greetings from staff members less scripted, adding more technology to the rooms and removing the traditional piano and harp players from the lobbies in favor of, in some cases, pop music.
After spending years studying whether to include Ritz in its loyalty program, Marriott executives said that focus groups in the last year and a half began to show that customers were demanding enticements, particularly in Asia where Ritz is expanding.
The company designed the new loyalty program to keep it separately branded from the general Marriott points program, Marriott Rewards, which has more than 30 million members who can earn points, which can be redeemed at any Marriott hotel as well as several airline partners.
Ritz’s top competitor, Four Seasons, has no plans to implement a loyalty program.
Edit by AMW
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Full Article:
http://online.wsj.com/article/SB10001424052748704190704575490113861298350.html
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The Homa Files 
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