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Rich Get Richer in Hotel Loyalty Programs

As the hotel giant Marriott buys out the smaller Starwood hotel chain, the benefits of the Starwood Perferred Guest loyalty program will be shifted towards the top elite. As excess rooms are in limited supply, those who are most loyal get the rooms. This creates a competition between customers on how loyal they are to the brand. Marriott is much larger and consists mainly of cheaper utilitarian hotels. On the other hand Starwood’s portfolio includes fancy hotels at destination locations. Thus, as the two loyalty programs merge, it seems more members of the Marriott loyalty program will use Starwood hotels than vice versa. This pushes the limit at which you get certain benefits up. The very elite of the Starwood loyalty program will still be at the top of the line for goodies and even more hotels to pick from. However, all the ones in the middle class will see it harder to find these goodies.

This seems to reflect our rich get richer model. Those who come earlier will have a head start on their loyalty points, and as more goodies are offered, they are the ones most likely to get them and build up more loyalty points. After this merger, those in the middle and any new comers will have a much harder time reaching the elite level in which they get priority for picks.

 

http://www.vox.com/2015/11/19/9760798/spg-merger-marriott

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