Bidroom organizes I Meet Hotel, a global conference connecting hoteliers to the future of hospitality. Since the COVID-19 outbreak, we have to take our conferences online. I Meet Hotel conducted a survey with 1000s of hotels to design a webinar more suited for hoteliers. One of the subjects that were highlighted were Loyalty and Subscription in Travel & Hospitality; In this session, we will cover Loyalty and subscription in Travel & Hospitality. This webinar will feature; Mark Ross-Smith, CEO @ Loyalty Data Co Claudia Scharf, Director of Customer Success @ Loyalty Prime Ltd. Amy Konary, VP and Chair, The Subscribed Institute @ Zuora The webinar is being moderated by CEO and Co-Founder Michael Ros.

1. Mark Ross-Smith
CEO @ Loyalty Data Co
Episode 7
Loyalty and Subscription
in Travel & Hospitality
17th June 2020
Amy Konary
VP and Chair, The
Subscribed Institute @
Zuora
Speakers Moderator
Claudia Scharf
Director of Customer
Success @ Loyalty Prime
Ltd.
Michael Ros
CEO & Co-founder @
Bidroom

2. 1Loyalty Prime
Travel & Hospitality
June 2020
Claudia Scharf, Director Customer Success
LOYALTY &
SUBSCRIPTION

3. 2Loyalty Prime
A WALK DOWN LOYALTY LANE
Pre 1980 20201980 1990 2000 2010
1981
▪ American Airlines
▪ United Airlines
1988
▪ Air Miles UK
1983
▪ Holiday Inn
▪ Marriott
1986
▪ Continental
1987
▪ Hilton
1896
▪ Sperry & Hutchinson
Green Stamps
1992
▪ Air Miles Canada
1994
▪ Flybuys
1997
▪ Boots
2000
▪ British Airways
2010
▪ Ritz Carlton
1999
▪ Starwood
TRAVEL & HOSPITALITY PIONEERING LOYALTY
2018
▪ Lyft

4. 3Loyalty Prime
TRADITIONAL LOYALTY LANDSCAPE TRAVEL & HOSPITALITY
Loyalty Programs
Program
Type
Points
Points & Tiers
Subscription
Cash-Back
…

5. 4Loyalty Prime
SUBSCRIPTION – IT STARTED AS A BUSINESS MODEL AND
FOUND ITS WAY INTO LOYALTY MARKETING
Telecommunications
Media & Entertainment
Fitness, Newspaper, Pay TV, Music, Gaming, Education
SUBSCRIPTION-BASED BUSINESS MODEL
since 17th Century
Bookselling in the 17th century
…

6. 5Loyalty Prime
SUBSCRIPTION – IT STARTED AS A BUSINESS MODEL AND
FOUND ITS WAY INTO LOYALTY MARKETING
Retail (Fashion, FMCG)
Travel & Hospitality
Telecommunications
Media & Entertainment
Fitness, Newspaper, Pay TV, Music, Gaming, Education
SUBSCRIPTION-BASED BUSINESS MODEL
since 17th Century
SUBSCRIPTION-BASED LOYALTY
since 2005
Bookselling in the 17th century
…

7. 6Loyalty Prime
HOW TO APPLY SUBSCRIPTION-BASED LOYALTY TO TRAVEL &
HOSPITALITY?
2. SERVICES 4. BUNDLE
1. USAGE 5. CO-EXISTENCE
Source: pngmart Image 162319
3. EXCLUSIVITY

8. 7Loyalty Prime
HOW TO APPLY SUBSCRIPTION-BASED LOYALTY TO TRAVEL &
HOSPITALITY?
2. SERVICES 4. BUNDLE
1. USAGE 5. CO-EXISTENCE
Source: pngmart Image 162319
3. EXCLUSIVITY
Discount on each booking or
discounted rate for x
nights/flights

9. 8Loyalty Prime
HOW TO APPLY SUBSCRIPTION-BASED LOYALTY TO TRAVEL &
HOSPITALITY?
2. SERVICES 4. BUNDLE
1. USAGE 5. CO-EXISTENCE
Source: pngmart Image 162319
3. EXCLUSIVITY
Discount on each booking or
discounted rate for x
nights/flights
Package services into
products to be sold upfront

10. 9Loyalty Prime
HOW TO APPLY SUBSCRIPTION-BASED LOYALTY TO TRAVEL &
HOSPITALITY?
2. SERVICES 4. BUNDLE
1. USAGE 5. CO-EXISTENCE
Source: pngmart Image 162319
3. EXCLUSIVITY
Discount on each booking or
discounted rate for x
nights/flights
Package services into
products to be sold upfront
Paid tiers - members
subscribe to certain tiers

11. 10Loyalty Prime
HOW TO APPLY SUBSCRIPTION-BASED LOYALTY TO TRAVEL &
HOSPITALITY?
2. SERVICES 4. BUNDLE
1. USAGE 5. CO-EXISTENCE
Source: pngmart Image 162319
3. EXCLUSIVITY
Discount on each booking or
discounted rate for x
nights/flights
Package services into
products to be sold upfront
Paid tiers - members
subscribe to certain tiers
Various combinations of
package 1, 2 and 3

12. 11Loyalty Prime
HOW TO APPLY SUBSCRIPTION-BASED LOYALTY TO TRAVEL &
HOSPITALITY?
2. SERVICES 4. BUNDLE
1. USAGE 5. CO-EXISTENCE
Source: pngmart Image 162319
3. EXCLUSIVITY
Discount on each booking or
discounted rate for x
nights/flights
Package services into
products to be sold upfront
Paid tiers - members
subscribe to certain tiers
Various combinations of
package 1, 2 and 3
Combination of free and paid
loyalty programs

13. 12Loyalty Prime
ARE THE CURRENT PROGRAMS FUTURE -PROOF OR DO WE
NEED TO CHANGE?
Meeting Shareholder Needs
▪ Financially viable
Meeting Customer Needs
▪ Attractive & relevant
ARE POINTS-AND TIER-BASED PROGRAMS FUTURE-PROOF?

14. 13Loyalty Prime
ARE THE CURRENT PROGRAMS FUTURE -PROOF OR DO WE
NEED TO CHANGE?
ARE POINTS-AND TIER-BASED PROGRAMS FUTURE-PROOF? The average consumer
belongs to 14.8 loyalty
programs, but is only
active in 6.7 of them*
*Bond, The Loyalty Report, 2019
*Capgemini, Loyalty Deciphered, 2017
54% of loyalty
membership are inactive*
Meeting Shareholder Needs
▪ Financially viable
Meeting Customer Needs
▪ Attractive & relevant

15. 14Loyalty Prime
ARE THE CURRENT PROGRAMS FUTURE -PROOF OR DO WE
NEED TO CHANGE?
ARE POINTS-AND TIER-BASED PROGRAMS FUTURE-PROOF?
Meeting Shareholder Needs
▪ Financially viable
Meeting Customer Needs
▪ Attractive & relevant

16. 15Loyalty Prime
ARE THE CURRENT PROGRAMS FUTURE -PROOF OR DO WE
NEED TO CHANGE?
ARE POINTS-AND TIER-BASED PROGRAMS FUTURE-PROOF?
*Kyros, 2019
Liabilities as of 12/2019*
▪ American Airlines: $8.6 billion
▪ Delta: $6.7 billion
▪ United: $5.3 billion
▪ Marriott: $5.7 billion
▪ Hilton: $1.9 billion
▪ Hyatt: $0.67 billion
Meeting Shareholder Needs
▪ Financially viable
Meeting Customer Needs
▪ Attractive & relevant

17. 16Loyalty Prime
ARE THE CURRENT PROGRAMS FUTURE -PROOF OR DO WE
NEED TO CHANGE?
ARE POINTS-AND TIER-BASED PROGRAMS FUTURE-PROOF?
Meeting Shareholder Needs
▪ Financially viable
Meeting Customer Needs
▪ Attractive & relevant x
x

18. 17Loyalty Prime
WHY SUBSCRIPTION-BASED LOYALTY IS A WIN-WIN
SITUATION?
TRAVEL & HOSPITALITY
▪ Attract your best customers
▪ Create stickiness & retention
▪ Increased engagement
▪ Unique selling point
→ Increased revenue
→ Continuous income stream

19. 18Loyalty Prime
WHY SUBSCRIPTION-BASED LOYALTY IS A WIN-WIN
SITUATION?
TRAVEL & HOSPITALITY
▪ Attract your best customers
▪ Create stickiness & retention
▪ Increased engagement
▪ Unique selling point
→ Increased revenue
→ Continuous income stream
Amazon:
▪ 150 million subscribers
▪ Members spend 5x more than non-members
▪ Subscription revenues accounted for 6.1% ($14
billion) of Amazon’s revenue in 2018*
*DigitalCommerce, 2020
*Clarus Commerce, 2018
Restoration Hardware:
▪ 95% of business driven by 400,000 subscribers*

20. 19Loyalty Prime
WHY SUBSCRIPTION-BASED LOYALTY IS A WIN-WIN
SITUATION?
TRAVEL & HOSPITALITY
▪ Attract your best customers
▪ Create stickiness & retention
▪ Increased engagement
▪ Unique selling point
→ Increased revenue
→ Continuous income stream
MEMBERS
▪ Instant benefits
▪ Instant gratification
▪ Benefits 24/7
▪ Exclusivity
→ More attractive and
generous rewards

21. 20Loyalty Prime
WHY SUBSCRIPTION-BASED LOYALTY IS A WIN-WIN
SITUATION?
TRAVEL & HOSPITALITY
▪ Attract your best customers
▪ Create stickiness & retention
▪ Increased engagement
▪ Unique selling point
→ Increased revenue
→ Continuous income stream
MEMBERS
▪ Instant benefits
▪ Instant gratification
▪ Benefits 24/7
▪ Exclusivity
→ More attractive and
generous rewards
62% of respondents would sign
up to a fee based program
- among millennials this figure
jumps to 75%*
*LoyaltyOne

22. 21Loyalty Prime
GETTING THE FLEXIBILITY YOU NEED – LOYALTY PRIME
FEATURE-RICH AND FLEXIBLE
QUICK TO LAUNCH
SCALABLE FOR ANY SIZE AND SECTOR

23. Claudia Scharf
Director Customer Success
hello@loyaltyprime.com
Loyalty Prime GmbH
Landsberger Str. 110 | 80339 Munich | Germany
WE WOULD LOVE TO HELP YOUR
LOYALTY PROGRAM TO BECOME WORLD -CLASS!

25. What can hotels learn from airline loyalty programs?

26. My mission is to help Hotels and Airline Loyalty Programs
help their members to experience more moments of joy.
About Mark Ross-Smith:
▪ CEO, Loyalty Data Co
▪ International Speaker on Loyalty, 9 countries in 2019
▪ 50+ Publications on Loyalty & Data
▪ Editor at Travel Data Daily
▪ Partner at New World Loyalty
▪ Formerly Head of Loyalty, Malaysia Airlines
➢ Add me to Linkedin
Industry Expertise

27. Airline Loyalty in the Media - 2020
▪ United Airlines MileagePlus, US $20B+ valuation
▪ American Airlines AAdvantage, US $19.5 - $31B valuation
▪ United Airlines market cap: US $11B
▪ American Airlines market cap: US $7B
The Loyalty Program is worth more than the Airline
> What can hotels learn from Airline Loyalty?
Loyalty Program Valuations

28. 1. Price is mostly irrelevant
Frequent travelers want value more than the lowest price
If your brand isn’t the lowest cost option in town, chances
are, frequent travelers to your hotel don’t care about price
as much as you think.
▪ What do they value more than price?
▪ What product can you deliver that aligns with that?

29. 2. Real Upgrades Are Essential
Fake upgrades disengage frequent travelers
▪ Hotels tend to do single room-type upgrades
▪ Imagine if airlines upgraded passengers like hotels
upgrade guests
▪ How do other brands your guests engage with treat
them?
▪ Will pay for suites, but not at crazy rates

30. 3. Maximum Revenue Per Segment
Not all guests are the same. Don’t’ treat them as such.
▪ Leisure economy class flyers with families won’t pay for
business class upgrades. Focus on what is right for
them.
▪ Family check into a hotel? Adjoining rooms at
massively discounted rate… that room otherwise empty
and the family won’t pay even 50% of the room rate for
the second room.
▪ Create offers by segment type to maximize revenue per
traveler type

31. 4. Don’t give out elite status for free
Elite status tiers drive incremental business
▪ Hilton & Accor elite status – is it about driving room
nights or about making hotels buy more points?
▪ Commercial dynamics of most hotel elite status
operates differently to airlines.
▪ Airlines are protective of elite status.
▪ Retain value. Positive discrimination.
▪ Status Matches can be valuable if executed correctly.

32. 5. Cultivate brand loyalty
Create partnerships, leverage other brands equity
▪ #1 benefit of cobrand cards, aside from selling points to
banks, is these people then start flying with the airline.
▪ In one research study by NWL, 40% of all new credit
card signups through the airline brand were new to the
airline.
▪ For smaller hotels… think about how else you might
capture customers into a brand, then use that brand as
a backdoor customer acquisition channel.

33. 6. Partner with Airline Loyalty Programs
Partner with Airline Loyalty, use their brand
▪ Promote the partnership for amplified effects
▪ 1 +1 = 3
▪ Attract new customers that otherwise unreachable

34. 7. Create your own mini loyalty proposition
Forget about points and expensive loyalty platforms
Leverage from travellers pre-qualified activity with other
airlines and hotels.
▪ Flash your Hilton Gold or Diamond card at check-in
and we’ll give you xxxx
▪ If you have an existing tier program, run a status match
from other hotel chains or airline brands
▪ Points promotions 5x less effective than elite tier
promotions with high-value segment

35. 8. The #1 Airline Loyalty Metric
Can that guest really do a 2nd stay in the next 12 months?
▪ Airlines track share of wallet. It’s the % of business your
brand can capture from that customer.
▪ If you can only capture 1 stay from a customer – make
it amazing for them because it’s likely a destination
where they’ll tell others about it.
▪ If you’re in a repeat business location, focus on offers to
get back a 2nd and 3rd time… keeping in mind price may
not be the primary motivating factor. Use
segmentation propensity scoring.

36. 9. Small Moments of Joy
Subconscious memory reprogramming
▪ Segment high-value customers by their emotional drivers.
▪ Align new marketing communications by emotional type.
▪ Airlines have carefully designed boarding music and aircraft
scents.
▪ Repeat over and over and over these small moments of joy
with guests. Lock in an association of your brand with joy
in their minds.

37. 10. Revenue Management + Loyalty
Existing RM models are useless
▪ Demand forecast without history, predicting demand for
fleet optimization, pilots, staff etc..
▪ Critical to get right price + right benefits = Best revenue
outcome
▪ Previous guest mix come from?
▪ Mostly out of town? Do you know when airlines are adding
capacity from those cities? Quarantine and immigration
status? What other types of guests can you get to stay with
you / lookalike guests, and how do you capture them, and
then charge them the right amount?
▪ With the right data, you can target the right set of potential
guests.
$25,000
$27,000
$29,000
$31,000
$33,000
$35,000
$37,000
$39,000
$41,000
$43,000
$45,000
0 10 20 30 40 50 60
REVENUE RESULTS FROM 50 SIMULATIONS

38. ▪ Acquire high value customers
▪ Loyalty status match platform
▪ mark@loyaltydata.co

40. THE SUBSCRIPTION
ECONOMY:
POWERING LOYALTY
Amy Konary
VP & Chair
The Subscribed Institute at Zuora

41. CUSTOMERS TODAY HAVE NEW
EXPECTATIONS
personal real-time
immediate
fulfillment
on-going
value
memorable
experiences

43. PAVING THE PATH IN TRAVEL & HOSPITALITY
Zuora Proprietary & Confidential Information. Not to be distributed, forwarded or reproduced © 2020 Zuora, Inc. Zuora is the registered trademark of Zuora, Inc. All Rights Reserved.
customer
product
channels
quote order
channels
recognize
collectinvoice
fulfill
experience
service
subscriber
3. XaaS Model:
TRANSFORM
THE CORE
1. Connected &
Adjacent Services
ENHANCE THE CORE
2. REPACKAGE CORE
To Recurring
ToplineTransformation
Technology Transformation
SUBSCRIPTIONS DRIVE LOYALTY

44. Technology
Media &
Information
Automotive
Manufacturing
Packaged software
Information & Data
Car ownership
Devices / machines
Software-as-a-service
Content-as-a-Service
Mobility-as-a-Service
Uptime-as-a-Service
CPG/Retail Physical products Convenience-as-a-Service
Travel &
Hospitality
Transactional products
and programs
Experience--as-a-Service
Utilities Commodity Home-as-a-Service
EVERY INDUSTRY IS SHIFTING TO SUBSCRIPTION
70% of organizations have deployed or are considering subscription services
— Gartner

45. SUBSCRIPTIONS DRIVE GROWTH

46. 350%growth / last 7.5 years
For the Subscription Economy companies
-- Subscription Economy Index, 2019
SUBSCRIPTIONS CREATE VALUE
Zuora Proprietary & Confidential Information. Not to be distributed, forwarded or reproduced © 2020 Zuora, Inc. Zuora is the registered trademark of Zuora, Inc. All Rights Reserved.
±26% growth / 2017>>2018
For the Manufacturing/IoT subindices
outperforming the average index!
-- Subscription Economy Index, 2019

47. SUBSCRIPTION IMPACT REPORT: COVID-19
April, 2020
"[The] ability to envision new ways of operating will
be crucial to weathering the crisis. Those that
succeed will set the tone for the next normal that
will follow and define the subsequent generation of
paradigms for consumer and corporate behavior.”
– McKinsey & Company
“The long-term transformation agenda for a
company does not go away during a crisis, but
attention can easily be drawn away from it. In fact,
the long-term agenda likely requires renewal, since
the end state may have shifted. Our research
suggests that companies that flourish during a crisis
are those using it as an opportunity to double
down on their long-term transformation plans.”
– Boston Consulting Group

48. SUBSCRIPTIONS INTRODUCE A NEW POINT OF VIEW
FROM TO
MARKETING Branding Experience
SALES MODEL One-Time Transactions Deep Ongoing Relationships
SALES Selling Products Selling Outcomes
PRICING ‘Cost Plus’ Value-Based Pricing
PROFITABILITY Unit Margins Customer Lifetime Value
PLANNING Backward-looking Statements Forward-looking Metrics

49. MVPs SHOULD BE RUN BY A
“SWAT” CROSS-FUNCTIONAL
TEAM WITH HIGH-LEVEL
SPONSORING
HAVE SCALE IN MIND…
YET AND DON’T TRY TO
TRANSFORM OVERNIGHT - IT’S A
JOURNEY!
LAUNCH 1 TO 3 MINIMUM
VIABLE PRODUCTS (MVPs)
THOSE MVPs SHOULD BE
FOCUSED ON CX
● “You don’t know what you
don’t know” => First nail it,
then scale it
● Use the MVPs to test &
learn the E2E process and
rationales to be ready toa
accelerate...
● … so make it “meaningful”
enough to get learnings…
● … yet add “thresholds” /
“guardrails” to keep the
scope under control (e.g.:
max # of subscribers, etc.)
● Define a “Glo-cal” model
● Deliver “something
tangible” in 3 months
● Focus on quick & early wins
● Keep things simple at the
start: Logistics, Finance,...
● Identify relevant scopes
(untapped opportunity,
urgent defensive move…)
● Can start with 1 MVP but
ideally 2 or 3 to make sure
that you’ll learn enough
● Objective is to test, learn
and iterate - so agility is key
● Focus initial investments on
what’s critical for customer
experience
● Use the MVPs as a “in
real-life” customer survey
● Don't assume >> try, gather
feedback, iterate
● Accept “short-cuts” for
back-office operations and
IT architecture
● Define success criteria for
each MVP - which shouldn’t
be only revenue-based
● Subscription MVPs are
REAL projects - cannot only
be led by IT or Product only
● Requires also talents/skills
from Marketing, Finance...
● It requires a dedicated
“SWAT” team > not a hobby
● C-Suite + Market MD
Sponsorship is key to
shorten decision-making >>
hurdles are often internal
● Don’t try to convince or
please everyone - focus on
early “wins” with champions
1 2 3 4
HOW CAN YOU JUMPSTART IN THE SUBSCRIPTION ECONOMY?
KEY LESSONS LEARNED FROM OUR CASE STUDIES: MVPs-ORIENTED APPROACH

50. ZUORA CONFIDENTIAL - APPROVED USE ONLY. DO NOT DISTRIBUTE.
ZUORA – POWERING THE SUBSCRIPTION ECONOMY
Started
Operations
2007
1,200+
Employees
Worldwide
1,000+
Customers
Worldwide
27% spent on
R&D
FY20 Revenue
$276M
FY20 Revenue
$13.1B
Quarterly Invoice
Transaction
Volume (Q4 FY20)
19 of the
Fortune 100
Powered by Zuora
Fiscal Year
February 1 to
January 31

51. Applications
A set of applications that enables
companies to price, package, bill,
collect, and recognize revenue for
subscriptions
● Zuora Billing
● Zuora CPQ
● Zuora Commerce
● Zuora Collect
● Zuora Revenue
Platform
A central platform that extends, integrates,
and orchestrates subscriptions across the
broader ecosystem
● Workflow Builder
● Events
● Notifications
● Custom Data Model
● Data Search & Query
● High-scale Processing
● Microservices Architecture
THE PLATFORM FOR ORDER TO REVENUE

52. Thank You!