Leaders in Customer Loyalty, Powered by Loyalty360
Leaders in Customer Loyalty, Powered by Loyalty360
Luxury Stays: A Q&A with Preferred Hotels on Customer Loyalty and Forming Strategic Partnerships in the Travel Industry
Preferred Hotels & Resorts is a portfolio of independent hotels worldwide that offers travelers a wide selection of luxury stays with a focus on leisure. Guests can choose from a handful of distinctive collections to create the aspirational trip of their dreams, including locations that focus on sustainability or even deliver a touch of history.
Preferred Hotel Group, the parent company of Preferred Hotels & Resorts, rebranded in early 2023 to Preferred Travel Group. Today, the I Prefer Hotel Rewards loyalty program counts over 4.5 million enrolled travelers globally.
Mark Johnson, CEO of Loyalty360, spoke with Lori Strasberg, Senior Vice President of Marketing for Preferred Hotels & Resorts, about its loyalty program, strategic partnerships, and how AI might drive changes in how people research and plan travel.
Good afternoon, good morning. This is Mark Johnson from Loyalty 360. I hope everyone is happy, safe and well. I wanted to welcome you back to another edition of our Leaders in Customer Loyalty series. In this series, we talk to the brand leaders about what they are seeing on the front lines of the customer channel and brand loyalty. Today, we have the pleasure of speaking with Lori Strasberg. She's a Senior Vice President of Marketing for Preferred Hotels and Resorts. Thank you very much for taking the time to talk to us today, Lori. How are you?
Lori Strasberg:I'm well and happy to be here, so thanks for inviting me to participate.
Mark Johnson:Absolutely. Thank you very much for taking the time to speak and first off, we love to start these on a more personal level, get to know the individual we're speaking with. So we'd love to know a little bit more about you, your current role and maybe some previous positions you've held that kind of shaped your path, and also maybe a fun fact or passion you may have outside of work.
Lori Strasberg:Okay sounds good. So I got into the hospitality space in early 2002 and joined Starwood Hotels not long after 9-11. Our CEO, Barry Sternlich ever the contrarian invested in building a travel company just when everyone else was cutting back. After travel really receded post 9-11. I was at Starwood for quite some time and did a number of roles, including running brand management for Sheraton Hotels and Tribute Hotels and building the field marketing team, which was like an internal digital agency serving our hotels that we launched in the very, very early days of the internet.
Lori Strasberg:Not long after Marriott acquired Starwood, I joined Marriott as part of the launch team for Marriott Bonvoy, and that was a really exciting experience. It was the first time it really went deep into the loyalty space and, of course, there was so much passion, both from Starwood preferred guest members as well as Marriott rewards members regarding where the program was going to go. So we had a lot of fun launching that. It was an exciting time. And then COVID hit, so things really slowed down in the travel business and then I joined preferred hotels about a year ago. So currently I lead marketing, which includes digital partnerships, portfolio marketing and, of course, loyalty. So in terms of my passions, of course, travel is one of them. Not surprisingly, some of my others are my family and my habit of shopping online endlessly for furniture that I never buy.
Mark Johnson:That's good. I have passions like those, for sure.
Lori Strasberg:What a waste of time, but I have fun with it.
Mark Johnson:It's always good to look and not to buy. Yes, see what's out there. So when you look at Preferred Hotels and Resorts a very unique organization, upscale hotel offering. For those who may not be familiar with Preferred Hotels and Resorts, can you give us a brief overview of what you guys do, how you do it and who you do it with?
Lori Strasberg:Sure. So actually we expanded the company and we're now called Preferred Travel Group, which includes Preferred Hotels as well as a sustainable brand called Beyond Green. We also own historic hotels of America and historic hotels worldwide and have really expanded in consulting services. We really function in the luxury space. The company was founded in 1968, so we've been around for quite some time and it really began with 12 independent luxury hotels as a cross-referral organization. Over the decades the company evolved and created a new organization, adding representation in sales, marketing and technology resources, and continue to add hotels as the value of that offering really became apparent and the need for scale also became apparent to these independent luxury hotels. In 2004, the company became owned and operated by the Uberock family, who have a really deep history in the travel business and have really built incredible relationships both with all of our hotels as well as outside our company but throughout the travel business.
Mark Johnson:Okay, your customer loyalty program I Prefer is a very significant program. Can you do us an overview of how the program works, how members engage with it and what are the benefits?
Lori Strasberg:Sure. So I prefer our loyalty program, where members can enjoy benefits from really the minute they join. So, unlike a lot of other loyalty programs, of course you earn points beginning with your very first day, but you also get free Wi-Fi and you're eligible for upgraded rooms when they're available, again from your very first day. So that is a little bit different. We do award points that can be redeemed for room nights or that you can combine with cash. We also offer reward certificates that can be redeemed during your stay. So if somebody has a lower points balance, maybe not enough for a room, they can redeem those for credit for a future stay on anything really on their folio. We also recently added a super interesting benefit called key access. It's for members only and it offers really incredible deals. It requires a pretty small points balance and you add cash to that, but even with one stay, a member should have enough points to take advantage of that program.
Mark Johnson:Okay, and key access. Can you give us a little more detail on that? Is it product, is it services that they can engage with?
Lori Strasberg:Yeah, so key access is for rooms. So again, we're a luxury portfolio. We do lean toward leisure. So, unlike a lot of programs that are really focused on the road warrior who's logging 20, 30, 40 stays a year, our program is really targeted toward high end leisure and, by definition, they don't take tons of trips, so they earn points but they're not necessarily generating that frequency. So we want to make sure that for people who are spending a thousand $2,000 to stay with us, that there is something valuable for them that they can redeem for. So, with key access, it's a host of hotels in our portfolio. Again, you don't need a ton of points to be able to redeem there. It's a cash and points offering, but the cash that's required does make it a really amazing deal, unlike a lot of publicly available rates.
Mark Johnson:That's awesome and I think that's a great realization that you have that your customers are different, so the road warrior is going to have significantly different needs and interests. Right, maybe wanting an upgrade, maybe wanting some offers at check-in or some recognition, but personalization is a big piece and it sounds like you have a great understanding, and in-depth understanding, of your customers.
Lori Strasberg:Yeah, it's a different need. Again, these are high end hotels, so members are spending a lot of money on a single stay and we want to make sure they get rewarded for that.
Mark Johnson:Excellent. Partnerships are an significant area of interest for our members of WLT360. We actually have a partnership committee that meets and discusses best practices. So when you look at partnerships, what do they mean to preferred hotels and resorts and how do you approach them traditionally?
Lori Strasberg:So partnerships are immensely important to us. They're really a way that we can help our brand and our hotels be exposed to a wider qualified audience. So we work closely with American Express, mastercard, visa. We also work with some luxury lifestyle partners and we do have a few on the horizon, but I can't talk about them yet. But we are excited for what's coming in 2024 and how we'll round out the partners that we're working with.
Mark Johnson:Okay Again with some of the things that we see from a partnership perspective, is there's a kind of a clarion call right now to simplify partnerships within the travel Hospitality Arena in general as well. When you look at your approach, how are you looking to potentially simplify or more align the partnerships with your customers?
Lori Strasberg:Well, the way that we work with partners. It really depends on the partner and the market and what the opportunity looks like on both sides. But to your point, everything has to make sense to the consumer, especially with the loyalty space being as saturated as it is. Everything has to resonate for them on an intuitive level. So one of the things that we're doing. At the time we introduced our tier names Insider, explorer and Elite. They really fit the brand very well, but we came to realize that consumers don't really understand that naming. So we are renaming our tiers to more of an industry standard maybe not as sexy, but again makes the program a lot easier for our hotels to deliver as well as for our members to understand. We're always looking at ways to simplify at the same time that we add more and more value to the program.
Mark Johnson:Excellent. When you look at travel very emotive and personal you know how does the employee loyalty approach, or what does employee loyalty mean, into, how does it factor in the customer loyalty efforts of the program?
Lori Strasberg:Yeah. So Preferred is a really interesting and different company in that way and our brand is truly about emotion, so not just the emotion of the traveler and how special they want that stay to be, particularly in a high service luxury hotel. But the company is owned by a family and treats our associates like family. They, the Uber oth family, has a deep and personal connection to travel and many of our hotels around the world choose to be part of Preferred because of the personal connection that is such a focus for us. Our hotels are really the opposite of the big box hotels. So many of them are family owned and run their coveted destinations in and of themselves. They all love what they do. They put the heart and hospitality and they love the personal connection and the personal touch of being part of Preferred.
Mark Johnson:Excellent. There was a great deal of discussion with regard to customers, customers changing, evolving, changing, going into COVID now changing going out of COVID and travel was significantly impacted during COVID.
Mark Johnson:Hyour customers changing coming out of COVID. What are you saying?
Lori Strasberg:Well, it was certainly an interesting time, and I think there were impacts of COVID that were temporary in nature and impacts that we believe will be permanent in nature. And one of those changes that we believe will be permanent is the shift to how consumers prioritize travel. We all saw a huge bump in you know what's known as revenge travel. So everybody came out of COVID and they were going to travel come hell or high water. But what we're seeing longer term is that people are not willing to give up travel ever again. They'll give up almost anything else before their special trip or their opportunity to see another part of the world or be with friends and family. So I think we really will see an ongoing prioritization of cutting almost any other kind of discretionary spend before you skip your trip.
Mark Johnson:Excellent. What's the future for hospitality and travel? Are you seeing trends that could be potential game changers?
Lori Strasberg:Well, this probably won't be a big surprise, but I think we're all assuming that AI will drive huge changes in how people research and plan travel. Of course, all of our companies in the space are working out the kinks. The tools aren't quite perfect, but I think ultimately, the expectation is that an AI program should really be able to assist travelers in planning a trip under their parameters and have that platform do a pretty decent job in planning. I think we're all expecting AI to enable predictive personalization, end-to-end, among other things, and that is really going to up the expectation for travel companies to know who you are and provide a customer experience that's personalized to you. It's been discussed for years, but it does seem that the technology is finally almost here, but it's something I think everybody in the space is keeping their eye on.
Lori Strasberg:Sorry, I was going to keep going. So the other thing that is increasingly front and center of sustainability, another thing that's been discussed for a long time, but with all the crises around climate that we've experienced, particularly this summer, we're going to see more and more environmental consciousness as well as interest in destinations that are not as subject to climate change. So I think we'll see a lot more people choosing Norway instead of Greece in the summer. Those kinds of choices will be impacted by climate change.
Mark Johnson:Excellent. And when you look at those changes, if someone has so much threshold capacity at Greece and all of a sudden they're going to Norway, that's going to take some planning on your part as well to be able to price and offer and make sure you have the right products there as well, correct?
Lori Strasberg:Yeah, well, fortunately for us we do have pretty good penetration in Scandinavia. But yeah, it affects how we market and, again, with understanding the customer, which hotels and which destinations we should put in front of them across the channels where they interact with us.
Mark Johnson:Yeah, it's interesting. We just had a discussion with one of our cruise members and they seem the same thing. Right, because they're pushed back right now in the Caribbean, the Bahamas, they don't want the bigger ships. They're starting to restrict them, which will have impacts, obviously, on those who offer the services or the extras on the island. But you also see a lot of cruise lines now by buying islands right to do their own. Yeah, some of those restrictions. It's very interesting, I'm sure.
Lori Strasberg:Yeah, it's a really transformational time in travel, no question about it.
Mark Johnson:Excellent. Are there other programs that you are personally loyal to, that you admire?
Lori Strasberg:So, in terms of programs I admire, one that was super interesting recently was Delta. So of course, everyone was crazy about Delta's program. They then made some changes that were fairly dramatic, so they had really differentiated themselves and provided a true human touch to help members and offered members a ton of value, which is we all know. They then announced they were changing. One thing that I really admire was that they recognized how unhappy their members were with those changes and rolled them back, and that's really what a loyalty program should do is be responsive to their members and move away from transactional loyalty into a real commitment to those members.
Lori Strasberg:I'm also a big fan of Amazon Prime. At the time they introduced Prime Video, honestly, to me it seemed like a real disconnect. Yet in making it a core part of their value proposition, it's really a benefit that scales like crazy, so you can add more and more members without adding more cost, and when you can do that in loyalty, it just really increases the value proposition. So I think they've been incredibly smart about what they've done with Amazon Prime.
Mark Johnson:And, it's interesting you mentioned Delta and kind of the extreme blowback they got around customer loyalty. There is a big push to revalue programs right now. Brands are looking at their consumer value propositions to make sure they're aligned. But I think there's a disconnect sometimes and dissonance in what the brand wants and what the consumer wants and radical changes like that can have. You know, the tier is the impact, the impact. So the brand I know JetBlue and others jumped on the chance to kind of market against that. But you mentioned Amazon as well. They did the same thing. They made some changes into their seller program, how they were charging fees for some of their kind of you know the people that provide them a product and they had to change that a couple of weeks back as well. So extreme blowback and it's great to hear that voice of the customer can have that impact because that's what customer loyalty should be focused on.
Lori Strasberg:Yeah, I mean emotional connection is a really huge part of loyalty. And the other thing of course that we've seen a ton of is points devaluation. So I'm proud to say that preferred has not done that. So our points are, you know, especially with rising ADRs, our points are worth more than ever and we have no plans to devalue our points. So I know other loyalty programs have been trying to increase their profitability by doing that. We have no plans to take that approach.
Mark Johnson:Well, again there, when you do devalue your points, I think you have to look at and be cognizant of the changes that could come forth right. So there's a big discussion right now with regard to getting people obviously to move up to here, to get more engaged with the brand, but the consumer value proposition is not aligned and you make draconian changes to it. It can have a pretty significant impact with the program and we see that time and time again in our membership. It's a big area of discussion, let's say.
Lori Strasberg:For sure.
Mark Johnson:Yeah, so when you look at your customer loyalty program, your team, your efforts, what can Loyalty 360 do to help you and your team?
Lori Strasberg:Well, I always love hearing about and understanding what other loyalty players are doing and how they're thinking about differentiating and evolving what loyalty means. Everyone offers points we do as well but how do you build upon that to create, as we talked about, emotional connection and something that really does feel distinctive With preferred? Again, we're fortunate that we have such beautiful hotels and aspirational hotels, so it does make it easy when we can put a hotel in front of a member and they understand their ability to access that hotel as being part of our program. Other things, of course, as we talked about a little bit before this, call understanding privacy regulations and other restrictions. In a crowded space program, stickiness is really important and, as privacy regulations tighten up, owning your channels and owning your data is super important. So, understanding how other loyalty programs are approaching that and it's always fun to know what other programs are thinking about how to become truly special and memorable, particularly outside the travel space, because so much inspiration can really be found there and then applied in our space.
Mark Johnson:Absolutely, and I think that's one of the things we do. We try to do very well, as we do our research topic every month, but we bring brands together in a fairly regular cadence to talk about the challenges that they're having, whether it's privacy, emotional loyalty you know, next generation customer loyalty metrics and the interest in the community of sharing versus not sharing. The reticence that's kind of went away and brands are very interested in kind of elevating and discussing, because I think that helps others understand what's working, what's not working, versus viewing everything as secret sauce or proprietary, which is which is great to see for the industry.
Lori Strasberg:Yeah, I think that's right.
Mark Johnson:Excellent, and now we have our quick fire session. Looking forward to these, what is your favorite word?
Lori Strasberg:So I love these questions because they really make me think. So my favorite word, both in business and personally, is growth.
Mark Johnson:Excellent. What is your least favorite word?
Lori Strasberg:My least favorite word is can't.
Mark Johnson:Okay, there's an interesting book out right now, magic Words, by Jonah Berger. He's a professor at the Wharton School. He said you should never use can't should always. You just don't, because can't implies there's an element of blame. Right where don't is internal locus control. So completely sidebar. I had a random book and the book just came out two weeks ago Amazing book, probably the best book I've ever read in the business world, by far. Yeah.
Lori Strasberg:And I think you know, with the word can't, anything's possible. It's just a matter of time and resources. So prioritization is important, but you always can or I should say almost always can do something if you're willing to invest in it.
Mark Johnson:Interesting. What excites you?
Lori Strasberg:So I love trying new things and having new adventures, even when they're scary. I tried skydiving, canyoning, a few things like that, and often been terrified but always thankful in the end that I pushed myself outside my comfort zone.
Mark Johnson:What do you find tiresome?
Lori Strasberg:People complaining.
Mark Johnson:What is your favorite travel destination?
Lori Strasberg:So my favorite place that I've been is New Zealand. I went there on my honeymoon and I just found it so friendly and full of adventure and natural beauty. And of course, they did have a female prime minister with a baby, so maybe someday the US will do the same.
Mark Johnson:Excellent. So what profession, other than the one you're in currently, would you like to attempt?
Lori Strasberg:So I love what I'm doing now so I had to really think about this. I think it would be super fun to be a guide for international trips, just to have people experience the world and experience the wonder of new places and meeting new people. It's just such a special thing to experience and sharing that with others and guiding others to that I think would be a ton of fun.
Mark Johnson:Excellent. What profession would you avoid?
Lori Strasberg:Anything having to do with blood and guts.
Mark Johnson:Okay, who inspired you to become the person you are today?
Lori Strasberg:So this was a little bit later in life, I suppose, but my husband has had huge influence on me and he really prioritizes people family and friends above all else, and being with him has just shown me how meaningful that can be.
Mark Johnson:What do you typically think about at the end of the day?
Lori Strasberg:So I think about how quickly I can get outside, especially on the days that I'm on a million calls back to back. That's also when I walk the dog and she's very patient waiting for me all day, so I'm always happy to see her excitement to be able to get out with me.
Mark Johnson:Excellent. And what do you want to be remembered? How do you want to be remembered by your friends and family?
Lori Strasberg:So that's a really sad question in some way. So hopefully being remembered is still a long way away, but I'd love to be known as someone who really kept my fire and my passion throughout my old age.
Mark Johnson:Excellent. Well, thank you very much for taking the time to speak with us today, Lori. It was great giving to know you and also getting to know more about the I Prefer program. Look forward to hearing more from you and the team in the coming years.
Lori Strasberg:Of course. Thank you so much for having me, and here's looking forward to a lot of news coming your way from our program in 2024 and beyond.
Mark Johnson:Excellent, and thank you everyone for taking the time to listen today. Make sure you join us back for another edition of the Leaders in Customer Loyalty series and until then, have a wonderful day.