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Priority Club Rewards –

25 Years Young

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Customer Insights ……

LoyaltyI want to be rewarded and recognized for my loyalty.

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1983 ….. A Star is Born

• Priority Club becomes the first points-based hotel loyalty pgm in the world– Initially set up as a promotion: 1Jan83 to 31May84

• The results were off the charts:– Inbound res volume was more than equipment could handle– Largest y/y occupancy increase since 1974; competitors occupancy fell – Average rate nearly 2X industry average

…. but the finances didn’t look so great

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Customer Insights ……

ChoiceI want as much choice

as I can handle.

LoyaltyI want to be rewarded and recognized for my loyalty.

Travel GuiltI want to ease the guilt I feel for being away from

my significant others.

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More Choice: Hotel brands for nearly every type of traveler and overnight stay occasion.

Nearly 4,000 hotels in 100 countries

1998

1983

2004

1991

1997

2003

• Luxury

• Upper Upscale

• Upscale

• Midscale Full Service

• Midscale Limited Service

• Extended Stay Upscale

• Extended Stay Midscale

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Gifts for Guilt: The 1st and largest rewards catalog in the industry.

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Customer Insights ……

ChoiceI want as much choice

as I can handle.

LoyaltyI want to be rewarded and recognized for my loyalty.

UtilityI want my rewards

currency to be as flexible as cash

Travel GuiltI want to ease the guilt I feel for being away from

my significant others.

ControlI want it how I want it,

when I want it, the way I want it. (the iPod effect)

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PCR Personal Shopper Rewards

The 1st (and only) hotel loyalty pgm to allow mbrs to redeem “off the menu” for anything they want.

P E R S O N A L S H O P P E R

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More Control and Utility

The 1st Hotel Loyalty program to offer ….

• No Point Expiration

• Real-Time, Paperless Redemption (no certs) via phone or web

Point Expiration

Reward Certs

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PCR Any Hotel, Anywhere Rewards

The 1st (and only) hotel loyalty pgm to allow mbrs to redeem their points for any hotel in the world

….. even our competitors’.

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Customer Insights ……

ChoiceI want as much choice

as I can handle.

LoyaltyI want to be rewarded and recognized for my loyalty.

UtilityI want my rewards

currency to be as flexible as cash

Travel GuiltI want to ease the guilt I feel for being away from

my significant others.

ControlI want it how I want it,

when I want it, the way I want it. (the iPod effect)

Social Currency and Self-FulfillmentI want experiences that expand my world and give me social status / position.

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Social Currency

Social currency is the “reputation score” an

individual acquires in a particular social network

that credibly reflects their value in that network.

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PCR Experiential Rewards

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PCR Experiential Rewards

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PCR Experiential Rewards

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PCR Experiential Rewards

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Rewards currency trends

Rebate Currency

Monetary Currency

Social Currency

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A History of Firsts ….

• 1983 1st points-based hotel loyalty program in the world

• 1983: 1st hotel loyalty program to provide a global earn / redeem offer

• 1986 1st hotel loyalty program to offer no point expiration

• 1993 1st to offer point redemption opportunities with airlines

• 1996 1st to launch Personal Shopper rewards

• 2000 1st Online rewards redemption catalog

• 2001 1st to offer instant rewards - real-time redemption via phone / internet

• 2002 Re-launches as Priority Club Rewards; double-digit growth for 19 qtrs

• 2004 the world’s largest hotel loyalty program

• 2005 1st to launch Any Hotel, Anywhere reward

• 2005 1st Freddie Award for “Program of the Year”

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Today, things are pretty darn good ….

Program of the Year – Americas 2005, 2006

Best Hotel Rewards Pgm in the World 2005, 2006, 2007

Best Hotel Rewards Program – US 2007

BUSINESSTRAVELER

BEST HOTEL REWARDS PROGAM - US

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So, where to next ??

• DEEPER CUSTOMER RELATIONSHIPSGreater focus on customer intimacy

– Segmentation / mktg automation / CRM– Social Marketing

• ALLIANCESMore / Stronger partnerships to interact with customers on activities that are important to them

• MONETIZING TOUCHPOINTSCreating value from every customer interaction

• IN-HOTEL DELIVERYCreating a better experience on-property

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Multi-Brand & Relationship Marketing

Multi-Brand and Relationship Mktg

Loyalty PgmsCRM &

Multi-Brand MktgAlliances

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Here’s to 25 years of success …..

….. And 25 more ……

Al Groves

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Time for a break …