New GHA DISCOVERY Loyalty Programme: Q&A with the CEO

Last week, GHA revealed the biggest shake up to its DISCOVERY Loyalty programme since its inception in 2010. 

Among the changes are revised tiers and benefits, new elite qualification criteria, and a completely revamped rewards scheme. Needless to say, there’ll be winners and losers, and I’ve analysed the changes in full detail over here.

Over the weekend, I had the opportunity to speak with GHA’s CEO Chris Hartley about the rationale behind the changes, and their expected impact on new and existing DISCOVERY members. 

Among the questions I had:

• How will DISCOVERY ensure consistent delivery of elite benefits, given the inevitable growth in the number of Titanium members?
• What kind of brand-specific benefits can Titanium members expect to receive?
• What’s the rationale for replacing Local Experiences with Discovery Dollars (D$)?
• Can D$ be earned and burned outside of stays?
• Will D$ be usable for prepaid bookings online?

Here’s Chris’ responses, and my thoughts. 

On the new elite qualification criteria and the “Titanium apocalypse”

One of the most remarkable things about the revised DISCOVERY is how easy it is to qualify for top-tier Titanium status.

In the old DISCOVERY, top-tier status required 30 nights. Now, it can be earned through 30 nights, US$15,000 or three brands.

Yes, three brands. This means you could requalify with as little as three nights, spread across different brands. 

Titanium members will also be able to share status with a nominated member, basically a “supplementary card” arrangement which doubles the number of Titaniums out there. As if that wasn’t enough, Mastercard recently extended its tie-up with DISCOVERY till November 2022, offering instant Titanium status to World Elite Mastercard cardholders- no stays required. 

All this means we can expect the ranks of Titanium members to grow considerably, and the concern is that this will lead to a massive devaluation of benefits, if not on paper then in practice.

After all, hotels only have so many rooms and suites. They can’t give everyone 11 a.m early check-in, or a two category upgrade, or 4 p.m check-out. What’s that old chestnut about “when everyone’s super, no one is?”

So I put this question to Chris: how will GHA hotels ensure consistent delivery of elite benefits with the influx of new Titanium members?

Chris responded first with the rationale behind the revised qualification thresholds: DISCOVERY isn’t one of the big boys, like Marriott Bonvoy or Hilton Honors. Consequently, the priority is to get their name out there, and this is one of the ways to do it.

With regards to the “too many Titaniums” concern:

• It’s true that some properties may get a surfeit of Titaniums, but if you look at the bigger picture, fewer than 1% of GHA members have Titanium status
• As for the three brands route, not everyone lives in a city with three brands easily accessible. They’ll need to travel internationally to do that, and not everyone is travelling yet
• The Mastercard partnership for instant Titanium status is a legacy thing, and going forward, he doesn’t expect GHA to offer instant top-tier status the way it did before

GHA Insider, GHA’s company representative on Flyertalk, added this:

I can’t share the inside data with you and the other thread participants directly but I can assure you that almost everyone qualifying for Titanium status in 2022 will be doing so because of their nights or their spending. Adding the 3 brands rule as another way of reaching that status is not likely to make a material difference to the numbers who will reach Titanium, based on historic stay behaviour patterns before the pandemic and over the last two years.

Also:

The majority of our members live in locations where there is only 1 brand or maybe 2 brands available, so they would need to travel internationally to qualify for Titanium under the brand criterion. That has been difficult for them, especially over the last couple of years. They can still earn elite status through nights or spend criteria under the new programme. This will be the main way that most members qualify for Titanium tier.

And:

Titanium will continue to be an exclusive tier for the top 1% (or fewer) of members.

So it seems like GHA does not expect the number of Titanium members to balloon overnight, even with the reduced qualification, status sharing, and Mastercard offer. 

Regardless of how that plays out, we need to remember that the most optimal situation for DISCOVERY may not be the most optimal situation for an individual member.

Would I love it if I were the only Titanium in the whole wide world? Sure. But from DISCOVERY’s point of view, their ideal scenario is to have more Titaniums, because if Titanium status is what tips the balance for someone on the fence between staying in a GHA property or somewhere else, it’s pure incremental revenue for them. 

Of course they can’t take that too far- if Titanium members consistently don’t receive their benefits, it’s only a matter of time before Titanium status ceases to be a meaningful determinant of whether or not a guest picks GHA. 

But to the extent that GHA can afford to have more Titanium members, it’s in their interest to do it. And it sounds like in the near term, their sums tell them they can. Chris took pains to emphasise that DISCOVERY isn’t undertaking to maintain qualification at the current thresholds forever; they just feel that it makes sense for the current place and time. 

The other thing I suppose I should consider is whether the “Titanium apocalypse” is a real thing, or just paranoia on my part. Talking to Chris made me wonder whether as a loyalty fanatic, I’d developed a kind of myopia that convinces me everyone’s going to be a Titanium soon, because it appears so darn easy. 

I mean, it’s child’s play for you and me to rack up three different brands because we’re aware of the criteria, we care about status, and we don’t mind going out of our way to achieve it. 

But the vast majority of people aren’t like that. You know it, I know it. Most people couldn’t give a toss about elite status, and of the remainder, a good number are clueless (if I had a penny for every email I get asking how to transfer Lifemiles to KrisFlyer…). 

So it could very well be the case that despite DISCOVERY lowering the threshold for Titanium and giving out status Oprah style, the elite ranks don’t swell at the rate we fear. I don’t know, but I have to at least acknowledge that possibility.

Per GHA Insider:

If member stay behaviour changes significantly, to the point where there are too many people reaching the top tier under any criteria, then it is possible that the rules would be tweaked to keep the numbers manageable and the tier status sufficiently exclusive. For the time being, we are encouraging members to benefit from the new qualification path and to experience staying with as many brands as they can across the alliance.

The jury’s still out on this, and the ultimate proof will come over the next 6-12 months. 

On new benefits for Titanium members

If you look at the benefits for Titaniums on the DISCOVERY website, you’ll notice something called “Brand Benefits”. 

These are additional perks that Titaniums can expect to receive when staying at specific brands. GHA has yet to provide further information, but:

• If you believe this post on Flyertalk (which correctly predicted three of the programme changes back in November), Brand Benefits include two breakfasts at Niccolo and one breakfast at Marco Polo
• Based on VFTW’s interview with GHA’s VP and Head of Transformation, Brand Benefits include breakfast, airport transfer or complimentary laundry. 
• On Flyertalk, GHA Insider says that Brand Benefits “range from gifts reflecting the local culture to services such as free laundry. At several brands they will offer you a choice of benefits from a small “menu” when you check in.”

Chris mentioned on the call that he’d send over some specific examples of Brand Benefits for Titanium members. Unfortunately, the response I eventually received wasn’t very illuminating:

Our brands are encouraged to offer brand-specific benefits for Titanium level members from 2022. We know that they are currently building these benefits and we will share more information in the beginning of next year

Another thing Chris mentioned regarding Brand Benefits was that “brands will have a surprise and delight component to elite tiers that will not necessarily be published or guaranteed”.

I asked Chris if that meant we shouldn’t expect a list on the GHA website that says “Titanium members will get Amenity X at Brand Y”. His response was non-committal- brands might do that on their own sites, but there was no mandate that they do so. 

The problem with this approach is that unpublished, non-guaranteed benefits aren’t a good way of encouraging stays. 

I mean, if GHA offered Titanium members guaranteed free breakfast, that’d be a major filip and a strong reason for me to favor the chain when planning my stays. As it is, most Titanium benefits are non-guaranteed, making DISCOVERY benefits more Russian Roulette than anything else. 

These could very well be a compelling reason to stick with DISCOVERY, but we’ll need to peg this as TBC until they’re ready to provide further details.

On why D$ have replaced Local Experiences

Under the previous DISCOVERY, Platinum and Black members earned a Local Experience every time they stayed at a new brand. These comprised of unique dining and culture events, wellness packages and tours.

The new DISCOVERY rewards members with Discovery Dollars (D$), basically a rebate on room and ancillary spending. All members will earn these according to the table below.

Chris offered some insights as to the reasons behind the switch:

• Local Experiences have been a feature of DISCOVERY since it launched in 2010, but not everyone had the opportunity to earn or time to enjoy them (e.g. a business traveller won’t have time for a leisurely dinner or spa treatment)        
• Points were considered too confusing (how many people know how much a Hilton or Marriott point is worth, anyway?), and customers would have to worry about devaluations
• A rebates programme like D$ is more equitable, because it rewards those who spend more
• D$ also helps brings more members into the fold, since they can be earned by all tiers

These sentiments are echoed by GHA Insider on Flyertalk:

The cash value of D$ is generally much more generous than the previous system, depending on your average room rate paid and the number of brands you regularly stay across. It gives members the option of incremental earning rather than having to reach thresholds to be awarded Local Experience certificates: so we believe it is both generous and more immediate. It’s also more democratic, since non-elite tier members can now earn rewards from their very first stay rather than having to make it to 10 nights in a year to earn a reward. We think that’s a good thing too.

I see two problems with this.

(1) No incentive to pick GHA beyond three brands

The problem with the new system is it eliminates any incentive to stay once you’ve hit three brands.

I’ll give you a simple example. Suppose I’m travelling to Bangkok and deciding on hotels. I’m open to all options- Hiltons, Hyatts, Marriotts etc. But then I spot this rate at the Avani Atrium Bangkok of THB1,355 (S$56) per night. 

Now, under the old DISCOVERY there’d be every reason to book this. Spending S$56 gets me accommodation plus a Local Experience, the value of which is likely to be significantly more than the room rate. 

But with the new DISCOVERY, it’s highly unlikely I’ll consider this hotel. A 7% rebate on a $56 stay? Hardly anything to get excited about (assuming I’ve already requalified for Titanium this year). As a result of this, GHA is likely to lose my business to a competing chain, where I know that incremental stays will count towards some other goal like milestone rewards. 

You see what I mean? Despite all the rhetoric about nudging members to explore new brands, the new DISCOVERY doesn’t actually encourage exploration beyond three. 

Milestone rewards (e.g. an additional Local Experience upon hitting three, six, nine brands ala World of Hyatt’s Brand Explorer) would go a long way to addressing this, but they’re not part of the programme as of now. 

(2) D$ have no aspirational value

Another problem I see with a fixed rebates system like D$ is that they lack aspirational value (this isn’t a criticism of GHA per se, mind you, Accor has exactly the same problem).

In a points-based system, there’ll always be sweet spots. I’m happy to grind out nights at lesser lights like the Hyatt Place Jacksonville Airport and Hyatt Regency Yogyakarta because I know there’s a stay at the Park Hyatt Maldives waiting at the end of the rainbow. The presence of the big reward benefits the chain as a whole. 

But a rebates system is significantly less aspirational, because it sets a hard and fast relationship between spending and rewards. Want to redeem a $1,000 uberlux hotel? Sure- spend $14,286 with us first. 

This is basically the miles versus cashback argument, phrased differently. Points-based rewards systems are like miles. You don’t earn a reward immediately, but for those who do their homework, there’s a big payday lurking in the future. D$ is like cashback. You get an instant reward, but there’s no opportunity to score outsized value. 

For sure, the cashback system is simpler for most people, even preferable to some. But a fixed rebate is never going to make me go out of my way to patronise a particular property. Why should it? 

Moreover, fixed rebates schemes are not necessarily cheaper to operate either, because value is often asymmetrical. The cost to a hotel of providing a free night can be virtually zero (i.e. when it’s not at full occupancy), but the value to the traveller can be significant.

If I can save $800 a night by redeeming points at a half-full luxury resort, I’m happy, the resort is happy (they get some reimbursement which won’t be the full $800, but better than zero), the loyalty programme is happy. 

I put forward to Chris that the adoption of a fixed rebates system like D$ removes the aspirational aspect from the programme, and he sees it quite differently than I do. He said, and I quote, “My argument is this programme is aspirational because it properly rewards leisure travellers.”

He gave the example of a couple who visit the Maldives and plonk down $10,000 on room and board. Under the old DISCOVERY, they’d earn the same reward as someone who paid a sub-$100 rate at a cheaper hotel. Under the new DISCOVERY, they’d receive a much bigger reward, commensurate with the amount they spent. 

That argument seems intuitive, but I don’t think it’s correct. We need to remember that for many big spenders, loyalty programmes aren’t even a consideration. I hardly think that Kim Kardashian cares about earning Bonvoy points when choosing where to party. 

But even if they are, they’re unlikely to be the sole determining factor. Put it another way: if I’m going to blow $10,000 on this trip, it’s important to me that everything goes perfect. If resort A has good reviews and resort B has great reviews, I’m probably going with resort B. At this level, loyalty programmes become more of a tie-breaker than anything else.

We need to remember that loyalty programmes are not about rewarding your highest spending customers. They’re about ensuring you don’t lose spend, and incentivising incremental spend. 

There’s little point in DISCOVERY rewarding people for doing something they would have already done anyway. I’d argue that DISCOVERY is better off wooing the traveller with a $200 per night hotel budget, for whom the opportunity to earn a Local Experience would be a bigger enticement than a 7% rebate. 

After all, a customer who pays expensive room rates is not the same thing as a profitable customer, assuming there’s high demand for a given hotel and many others who would be willing to pay. 

Likewise, a customer who pays lower room rates may not necessarily be less profitable. In fact, they can be pure profit, should they occupy a room otherwise have remained empty. 

Or consider this: who should you reward more? The business traveller who pays a last-minute $600 rate for a room at the Pan Pacific because it’s the closest to his office? Or the leisure traveller who, having examined a range of options, settles on a $150 advance purchase rate at a PARKROYAL? 

It’s the latter whose business you really need to win- the former may be a bigger spender, but rewarding him/her is pure cost to the extent he/she would have stayed with you anyway. Loyalty programmes should reward choice, not compulsion. 

On earning and burning D$ outside of stays

Currently, D$ can only be earned and burned during stays. 

According to Chris, GHA is working to add the ability to earn and burn D$ outside of stays. However, it won’t be a short term introduction- late 2022 or early 2023 was the timeline he offered. 

I see no reason why they’ll tarry on this though. It’s very much in GHA’s interest to get the system up and running so that members have additional reasons to patronise hotels outside of stays. 

On burning D$ online

Currently, D$ can only be redeemed at the front desk of a hotel; there’s no ability to redeem them online. 

This does diminish the value of D$ somewhat, because you won’t be able to use D$ to book discounted, non-refundable rates online. For example, if I were looking at the Capella Singapore, I wouldn’t be able to book the Advance Purchase 30 Days rate, since it’s paid at the time of booking. 

According to a GHA spokesperson, the timeline for adding online redemption functionality for D$ is Q2 2022. 

Other odds and ends

Two random bits of information that didn’t fit anywhere else. 

• You can qualify for Titanium/Platinum by staying at the same brands every year; there’s no need to clock new ones each time

• PARKROYAL and PARKROYAL COLLECTION are currently not treated as separate brands. This might change in the future when PARKROYAL COLLECTION will add additional hotels to their portfolio.

Conclusion

My analysis of the new DISCOVERY programme is that it certainly has more mass appeal, but won’t be as attractive to people like you and me who live for the sweet spots and outsized value.

While I dislike that DISCOVERY has gone from “stay-one-earn-one” to a glorified cashback programme, a shift to revenue-based earn and burn is just par the course for the market, as we’ve seen with Marriott Bonvoy.

GHA has given reassurances that we’re unlikely to have a “Titanium apocalypse” on our hands anytime soon, but the true test will come from stays over the next 6-12 months. Will upgrades, early check-in and late check-out still be honored? Will Titaniums still feel like valued guests, or is dilution inevitable? Time will tell. 

What other questions do you have for GHA?