LOS ANGELES—One of the major advantages of having your hotel affiliated with a major brand has been the power of their loyalty programs and their ability to get guests to book direct. However, with the launch of Universal Points, an alternative loyalty program based here, independent hotels can now be armed with some of the same advantages.
Universal Points was launched with a soft opening in April, although it was only formally introduced to the industry last month. The program is designed to focus on the customer relationship with independent properties and drive direct bookings, according to James Gancos, CEO & founder, Universal Points.
“We’re set up to be a service for hotels to use. We’re not yet another booking engine or intermediary that’s trying to book reservations and send to the hotel. This is actually a tool hotels use to try to get direct bookings and repeat business,” he said.
Gancos cited his two primary motivations for creating the program, which has already signed 141 independent hotels. “I saw how effective loyalty programs were at chain hotels in contributing to positive aspects of the business. I noted consumer tastes and preferences starting to move more toward independent and boutique-style hotels, and they didn’t have that same benefit. The second thing is the growing share of the online travel agencies, which charges independent hotels 20%-30% for a booking and is taking a lot of revenue and profit out of the hotel. I saw that as an industry being a very dangerous ramp and I wanted to try to help combat it,” he said.
The program works by giving guests 5% of what they spend at a Universal Points hotel back as a reward through PayPal or Virtual Visa after their stay, provided they book direct with the hotel and not through an online travel agency (OTA). Gancos noted that Universal Points pays out the 5% reward to the guests and bills it back to the hotel, with the addition of a service fee that ranges from 0%-3%.
In addition, participating hotels do not pay Universal Points for existing loyal guests who sign up within the first three months, and early adopter hotels only pay 2%-3% for guests who sign up after the first three months or guests who are signed up by Universal Points along with the 5% reward.
“The basis of our platform from the guest perspective is instant gratification, and from the hotel perspective, it’s simplicity of use and the no-risk agreement,” said Gancos.
Gancos talked about what types of properties have been tapping into the system thus far. “It does run the gamut. For the most part, it’s more city-center hotels, but we do have a number of resorts as well. They’ve primarily been in major markets, but we do have about 15% in secondary or tertiary markets,” he said.
For example, some of the U.S. properties that have signed on with Universal Points include the Park Central Hotel and The OUT, both in New York City; Chamberlain West Hollywood in Los Angeles; Colony Palms in Palm Springs, CA; the Sirtaj Hotel in Beverly Hills, CA; the Sofia Hotel in San Diego; and the Leslie Hotel in South Beach.
Gancos was asked if he was surprised by the more than 140 properties that have signed with Universal Points so far. He commented, “When you do an initial business projection you kind of just assume it’s a set amount signing up per month, but in reality there’s an acceleration going on. The first few hotels were harder to close than the last few, so we’re seeing accelerated growth. I think overall we’re on track with what we originally projected to do,” he said.
He also outlined some specifics targets in terms of numbers: “We quantify the worldwide market of target hotels at 275,000. We’d like to get 10% of that market, because they don’t have viable options right now.”
Gancos touted one of the biggest benefits of Universal Points, which he noted can be turned on for hotels within a day of signing the agreement. “Most loyalty programs out in the market for independent hotels take two to three months to set up. Most of these independent hotels don’t have the time to do that, so our solution being turn-key, no systems integration and on in one day is really a great advantage,” he said.
In terms of marketing efforts, Gancos noted in addition to the company’s own promotional efforts, the first exposure a guest would have about the program would be through a newsletter or email blast from the hotel. Universal Points also has placement on the website of participating hotels, in addition to cards, front desk plaques and other collateral encouraging guests to sign up.
There is also a charitable component as elite thresholds are recognized by giving the guests $10 or $25 to designate to a local charity of their choice through Universal Points’ partner, Global Giving.
Gancos cited what he sees as one of the key aspects of the program. “There’s a big difference between rewarding a guest and giving a guest a discount. I think that’s a very significant differentiation. There’s something about a reward where you get it after the fact and it comes to you on top of whatever deal you booked. That’s a real memory in someone’s head and it’s a great way to say thank you to a guest,” he said.