The hotel industry is in crisis, and for most travel businesses the crisis playbook is the same: shed costs, and fast without long term strategic vision. For Marriott Bonvoy, the world’s largest hotel portfolio, that means cuts to the Marriott Ambassador program, a seemingly successful rollover from the Starwood Hotels merger.
The Ambassador Program was designed to build relationships, which saw individual points of contact assigned to high value guests via a 24/7 “ambassador”, ready and able to assist with any needs.
Before Marriott, the Starwood Hotels Ambassador Program was created to enhance relationships with top tier members of the Starwood Preferred Guest (SPG) Loyalty Program. The program was run by a specialized team of 150 people around the world, working in harmony to create meaningful connections and assistance for guests that moved the needle.
Surprising to some now, and even more in the industry at the at the time, the SPG Ambassador Program, now Marriott Ambassador, was actually born during a travel downturn, following the global economic collapse of 08′, and ensuing global recession. People thought it was nuts to invest in relationships during times of collapsing travel.
After the last good days of summer, Starwood launched the ambassador program in September 2009, during the worst of the travel crisis to protect or gain share of a small wallet, in hopes of being rewarded on the flip side. It paid off.
Now, Marriott’s Ambassador Program is offered exclusively to guests who stay 100+ nights per year, who also meet a minimum spending threshold of $20,000 per year with the hotel group.
It’s precisely why the Marriott move to eliminate, or greatly devalue the Ambassador Program makes immediate financial sense today, but arguably lacks foresight for the travel recovery. Marriott is reported to be initiating mass layoffs against Ambassador agents, and Ambassador members are told to use shared contact info, rather than individual points of contact.
As travel receeded, Frits van Paasschen, Starwood CEO during the creation of the Ambassador program tasked his senior team, including Daniel Kerzner, a leader in Customer Experience at the time to enhance SPG’s personal connections with guests, beyond what any traditional loyalty program offered.
The thinking was simple: double down on relationships when times were tough, to build stronger connections on the rebound.
Speaking to GSTP, Daniel Kerzner, the Director of Customer Experience for Starwood, at the time of the Ambassador launch noted that these are in fact the precise times an Ambassador Program can make all the difference.
When times were tough and the economy was suffering and travel was down… those were the times to double down on relationships. Not to walk away. We (Starwood) identified people who had traveled before, who were profitable before, who had certain behaviours, patterns and characteristics.
Although they were travelling less when we launched, we wanted to build trusted and meaningful relationships with them, because we knew that travel would come back and when it did people would naturally go where they had a relationship, trust and comfort.Daniel Kerzner, former VP Marketing, Starwood Hotel Group
According to people who worked on the program, even people who “mattered to the people who mattered” were treated with the same level of personalization, particularly during the worst of the crisis. It was authentic loyalty, and when it mattered. In other words, if an ambassador guest had a best friend staying somewhere, that best friend was treated as if they were an ambassador. It felt like family.
In times like the present, when each hotel chain is offering aggressive status matches to poach guests of competing chains, top tier guests who are treated like family, and whose friends and family are treated like family are far more difficult prey, which was exactly the idea. It makes Marriott’s handling of the present harder to understand.
“It was loyalty when it mattered and when everyone thought we were crazy for investing when the world was shrinking. We did things when they mattered most. Birthdays. Anniversaries. Not just when they travelled. We were there for people when they needed us. And when they didn’t expect anything. Sometimes that included when they stayed at competing hotels.”Daniel Kerzner, Former VP Marketing, Director of Customer at Starwood Hotels
Kerzner also notes that the most requested items on property from high value Ambassador guests was simply diet coke, and personal recognition, so it’s not as if complimentary magnums of Krug were expected with each stay. It was all about elevating the travel journey, and whatever could be influenced in between.
When travel rebounded, Starwood estimated that the Ambassador Program resulted in well over 100,000 incremental (extra) room nights per year.
Marriott may be shoring up cost issues today, but as travel recovers, those who invested heavily in the brand, with more than $20,000 per year in spending are now at risk of feeling disenfranchised. A guest who previously enjoyed an individual point of contact with someone who took pride in ensuring every stay was perfect, and creating special moments, it’s hard to go back to a “please hold” phone number.
In an increasingly metric driven, spreadsheet fueled world of travel brand finance, accountants often fail to realize why times are good when they are, and why things which may send a red flag on the spreadsheet one month, may actually be the reason for the green lights just a month later.
For Marriott, only time will tell. It’s just odd to kill a program which was designed specifically to fight through the difficult times.