By Rick Ferguson
My wife and I were married at the 21c Museum Hotel in Cincinnati, OH. As this wasn’t the first rodeo for either of us, we were both set on an untraditional wedding. The 21c offered the perfect venue for the untraditional: A boutique hotel in a great downtown space filled with an eclectic selection of carefully curated modern and folk art. The venue was magical, the catered food and drink were on point, the staff were exceptional, and our guests had a great time.
From that moment, we were 21c fans. We’ve stayed at 21c hotels in Nashville (recently sold to Hilton), Louisville, and Lexington. We plan to hit the others as well, because we love the experience, the food, the art, and the opportunity to explore the new in a familiar environment.
That’s why we’d seem to be perfect candidates to join 21c’s new “Dis-Loyalty” subscription program, launched just last month. 21c and the Dis-Loyalty program are part of the Ennismore portfolio of boutique hotel brands, which is in turn owned by the Accor Group. Dis-Loyalty is offered as a membership option throughout the Ennismore portfolio, which includes over 75 hotels in more than 50 destinations around the world under an array of lux brands including 21c, the Hoxton, SO/ Hotels, SLS, and Mama Shelter.
Dis-Loyalty membership runs $18 per month and offers a host of discounts and soft benefits including:
- 50% off new hotel openings within the first three months
- 20% off the first stay at any hotel and 10% off return visits
- 10% off food and beverage purchases
- Free daily tea or coffee
Ennismore hopes that Dis-loyalty will attract Millennial and Gen-Z fans bored with traditional points-based loyalty programs and willing to try as many new experiences as possible within the brand’s portfolio. The program will be particularly appealing to young urban professionals who live within walking distance of an Ennismore hotel and who might quickly recoup that $18 a month in daily free lattes.
Of course, Ennismore’s program isn’t really a “disloyalty” program; the concept is just a marketing hook. Dis-Loyalty is, in the classical sense, a paid loyalty program offering discount-based rewards. It’s also a classic subscription play, a concept that has spread beyond “box of stuff” monthly programs—first to retailers and now to travel and hospitality brands.
There is wisdom behind the strategy; members required to put some skin in the game are more likely to engage with the program. As Forbes recently reported, a 2021 Ebbo survey revealed that 95 percent of surveyed retailers were considering launching a subscription program. That’s because, as McKinsey reports, members of paid programs are 60 percent more likely to increase their spend versus only 30 percent of members in free programs.
Low-cost airlines have spearhead travel subscription models. As MasterCard reports, UAE carrier Emirates offers Skywards+, a three-tiered paid subscription offering a 20 percent mileage bonus, free lounge visits, and an increased baggage allowance. Alaska Airlines offers travelers who pay a monthly fee the ability to buy a set number of flights for as little as a penny (plus tax) each way.
In the hotel and hospitality space, subscription models have also taken root. A few examples:
- Intercontinental Hotel Group’s (IHG) Ambassador Program allows members to pay $200 annually to enjoy Platinum Elite status in IHG’s One Rewards program without meeting stay requirements. Ambassadors also enjoy room upgrades, food and beverage credits, and complimentary weekend stays.
- Vail Resorts’ Epic Pass program offers season pass holders 20 percent off lodging, food, and resort purchases at any of Vail’s 40+ resort properties—all for a tidy sum of $1,000 a season. Last winter, Vail sold a record 2.3 million passes.
- Hotel chain Citizen M launched a subscription service targeting remote workers. The program allows subscribers to stay at any Citizen M property for one full month at a flat rate of £50 per night with food and beverage discounts.
The pay-to-play model has become so ubiquitous that even behemoth brands are getting into the act—often by offering “loyalty accelerators” that allow program members to buy their way up to better perks. IHG’s Boost Your Points allows members to double, triple, or quadruple earned points for a price, while Choice Hotels offers bonus points packages at multiple levels.
Dis-Loyalty is part of a larger trend in travel loyalty geared towards evolving value props to appeal to younger Millennials and Gen-Zers. This demographic shift is no joke: The latest financial results from American Express revealed that more than 60 percent of new accounts were associated with Millennial and Gen Z consumers spending at a clip 20 percent higher than last year.
What does the TikTok Generation look for in a travel loyalty program? They want programs that are:
- INCLUSIVE: Unlike traditional points-and-status programs that separate the haves from the have-nots, subscription programs like Dis-Loyalty offer perks to any customers willing to cough up the monthly fee. This egalitarian approach appeals to younger consumers who view with envy the horded wealth and status of their Boomer and Gen-X elders.
- SIMPLE: Dis-Loyalty members receive four simple benefits with no blackout dates, elite tier qualifications, or complicated earning matrices to impede their participation. Older consumers are willing to do the work and horde the points and miles; Gen-Z want their rewards now.
- EXPERIENTIAL: Ennismore will soon roll out Dis-Loyalty Drops: Unique and exclusive members-only experiences. Meanwhile, Marriott allows members to redeem points for experiences, IHG allows members to redeem for lounge access or suite upgrades, and Accor offers redemptions for concerts and sports tournaments. Expect this trend to continue.
Loyalty by another name
When Ennismore announced the Dis-Loyalty program, points junkies on Reddit and the travel forums were quick to label it a gimmick. Typical was this response from One Mile at a Time’s Ben Schlappig:
“Ultimately this branding seems like it came from a millennial who thinks they’re edgy. It’s clearly targeting a Soho House-style crowd, in the sense that it requires a membership, and it’s a bit bespoke, and it’s not a points program. But I also think the marketing makes more sense in a boardroom than among the general public.”
Even if Dis-Loyalty is just a loyalty program by another name, it should still attract subscribers from its target audience—and outside of it as well. My wife and I are Gen-Xers, after all, but we’d consider joining the program if we still lived in a city with an Ennismore hotel. We loved the Cincinnati 21c’s in-house restaurant Metropole, so the 10 percent off our meals there would suit us fine. And we love to travel, so enjoying 20 percent discounts in London, Paris, or Dubai would suit as well.
But would we still feel the same way a year after dropping two bills on Dis-Loyalty? Behavioral economists refer to a concept called “Transactional Utility Theory,” which holds that consumers evaluate purchases not only from the purchase’s intrinsic value, but also from their perceived quality of the deal—its transactional utility. If, a year later, all these new Dis-Loyalty members perceive that they passed the breakeven point in their program investment within a reasonable time frame, then they’ll re-up for another year. If not enough subscribers hit breakeven, then the program will churn.
Will Dis-Loyalty prove to be more than a marketing gimmick? If Vail Resorts offers a data point, then there’s reason to hope; the re-up rate for the company’s Epic Pass holders is double that of those who purchase day passes.
That’s the future of hotel loyalty programs: Inclusive, simple, and experiential. Now, if you’ll excuse me, the wife and I are off to Cincinnati to visit our wedding venue and enjoy a burger at the Metropole. It’s the best burger in town, in one man’s opinion.
To reimagine your own customer strategy, join us in London for the Loyalty Summit on 21 September. General Admission pricing ends soon, so visit our registration page to reserve your spot today!
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