Taj Inner Circle responds: terms revamp as simplification

Yesterday, I posted a detailed analysis of how Taj largely devalued its program by taking away lots of benefits. Seems Taj managed to read the post, and they posted a detailed response. I thought it would be good to highlight their side of the story, even though I don’t mostly agree with it. I’ve broken it into pieces so that you can read my thoughts along as well.

That is a detailed analysis of the program. We see that you went through the new website and hope the information was presented in an easy to digest manner. Coming to the points you have raised, we would like to break them into 3 categories:

The Enhancements – While you have covered the enhancements well, there are a few we would like to highlight and emphasize again

1. No Blackouts across all room categories – This is a very powerful change. Most programs that offer no blackouts for redemption do so for the base category only, that too with limited room inventory. Our blackouts apply to all rooms across all room categories.

2. The Earn Rate – For Gold and Platinum tiers, our earn rate of 1 point per Rs. 70 (12.5% increase) and 1 point per Rs. 60 (25% increase) respectively is among the strongest earn rates for a hotel loyalty program

While I agree that they went with no blackout across room categories, when you’re setting up points as cash and making the redemption rate dynamic, this is a must give. As for the earn rate, it is a number. At the end of the day, if 35 Quadrillion Zimbabwean Dollars is equal to 1 US Dollar, it is about the capability of purchasing with this hotel currency, and in this case, it is basically pro-hotel chain rather than pro-consumer. Ultimately, this is taking away from a consumer since he is paying more, even if in points.

3. Dynamic Room Rates – We have freed loyalty points from a fixed point rate to a completely dynamic rate linked to the Best Available Rate at the hotel. This will enable members to plan their travel and actually make the most of lower occupancy periods by paying lower. Members who want to redeem during higher occupancy periods will make a conscious decision to do so. This gives a lot of flexibility to you in terms of planning your redemptions

I’ve invited the Taj Inner Circle to show me examples of how they are making me pay lower than the earlier chart at any hotel. I could not find any on my own dipstick.

4. Membership Benefits – Each membership benefit has been researched to ensure that they will actually be used by members and would enhance their stays

The benefits till Gold tier are too little too late is all I’d like to say. And not world standard. Most programs on their higher elite tiers offer complimentary breakfast, lounge access, upgrades on availability and so on. Not with the Taj. You just get some discount on points, a few upgrade vouchers which they will not guarantee a use of.

5. Real Time Redemptions at the hotels for F&B and spa – Points are currency now

The Removed Benefits – While the list of benefits that have been removed seems pretty long, this is the result of a series of discussions with frequent travellers. It was a unanimous finding in our research that frequent travellers appreciate fewer benefits but those that they would really use rather than a long list with some that would be seldom used. E.g. an upgrade is valued much more than fruits in the room, late check out is valued much more than discount on the business center and laundry. For a large chunk of business travellers, the spouse complimentary benefit and the discount on room rates were benefits that were rarely used whereas each new benefit has very high usage rating as each benefit will make their stays more comfortable. Therefore, on a like to like comparison, while many benefits have been removed, the ones added in have been well thought out and researched ones that members are most likely to use.

While I certainly hope this is true, I can’t believe they already have ratings for their new benefits, on day 1 of their revamped program being launched.

The Redemption Rates – The redemption rates on the Taj InnerCircle program has not been updated for the past 3 years which is why the previous redemption rates were not reflective of the current prevalent rates. In the last year, we overhauled our technology platform completely and then got some frequent travellers together to seek the answer to one fundamental question – The lowest redemption rates OR complete flexibility? A lot of our members gave us feedback that they wanted to redeem points during Christmas/ New Years. They also wanted to make bookings on suites which was not possible earlier. In order to provide that complete flexibility that was desired, it was a conscious decision by us to revise our redemption rates. Most of the members we spoke to preferred having this redemption rate increase rather than having a redemption request denied. Besides, in the example you have pointed out, for Taj Mahal Palace, your redemption rate with the Gold Tier discount has actually remained the same at approx. 2000 for the base category room.

The Taj smartly gives it back by pointing out that I’d still get the room at approximately 2000 points for the base category room, not commenting on the fact that another non-Gold member for instance, would have to pay more points to get the room. Redemption charts get re-evaluated all the time, but to cut-over to a new redemption chart with zero notice to members is not something I’d expect of a headline company of the Tata Group.

To summarize, if we create a simple list of the items that have been taken away versus those that have been added, the taken away column will look bigger. However, once we get into precisely what has been added versus what has been taken away and place a value to each, you will see that the new program wasn’t a way to taking away member benefits but actually giving the most frequent travellers what they really value. Less is more sometimes.

I’d love to see the value comparison the Taj did to make this comment. I still go back to my point, any changes which do not look or sound good for the members should be done with a notice period in mind and not abruptly. The correct way to have done this would have been to give members sufficient notice on a new award chart coming, and given them an opportunity to redeem at old rates I also don’t see the point in expiring all the existing member points in circulation two years from now, while the original terms & conditions stated expiry after four years.

What are your views of these changes at the Taj Inner Circle?

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  1. Although I get complimentary gold through my credit card, The previous gold and the current one is miles apart. Unless my bank decides to up it to platinum, this becomes more or less useless for me.

    I have platinum on Marriott and I now find no good reason to stay at a Taj hotel instead of a Marriott property when both are available. 80 nights for the new platinum is higher than any other international loyalty program I have used and given internationally, my chances of finding a Taj is a lot lower that my chances of finding a Marriott/Hilton, these points are of lesser value.

    One this I do not understand is why go with 4 tiers with the lower three tiers being of almost no value as compared to platinum when 3 is the industry norm.

    Taking Marriott as an example,
    Marriott guarantees lounge access to its Gold and Platinum guests with complimentary room upgrades and free breakfast across properties. These two I don’t see on the Taj offering. To me, these two are very important and it only takes 50 nights to reach gold on Marriott. 75 nights for platinum and that was the highest internationally but was not an overkill given their Gold tier is very good which Taj’s is not.

    When trying to compete, Taj should look at what international chains offer and match with them instead of shooing away potential customers with a lopsided top heavy rewards program like the current one.

  2. Taj has completely downgraded their program. By merely adding no blackout a prerequisite for a world class program, Redemption rates have been increased.
    I think no one knows in Taj about running a program which not only provides flexibility but attractive enough for redemption.
    Recommend switching to SPG for the people looking for a world class loyalty program.

  3. Unfortunately, I had to go through some trouble with Taj in regards to their points system. I was not awarded the points as per my spending and I contacted through their site and apparently they closed the case without any correspondence. I live overseas so I can not even contact them through phone due to time differences so I gave up on the issue since I don’t have all the time in the world chasing them for points but the point is that its very disappointing that a chain like Taj where I have spent quiet a bit of money decides not to bother to explain my simple queries. Fyi. The services and most Taj properties are outstanding. I just hope their customer service for TIC matches up to the same.

  4. Very interesting discussion here. I think not many people in India unlike USA aggressively analyse pro and cons of loyalty programs before choosing them.

    As a result, benefits and emphasis on loyalty is almost commonly lacking from Indian hospitality chains (TIC, ITC, jet privilege and air india) when compared to global chains (SPG, Marriot, AAdvantage, united milage).

    Absence of any notice period from Taj (or say a Tata company) is what hurts most here. To put a fair argument, points that earned through old program (rate, benefit etc) must be available for redemption at old rates (at least for some notice period) because i.e. what I signed up for in past when I earned them. Depending on new system I may or may not choose Taj in future and that would be my real “conscious choice”, something which Taj seems to be very interested in (and justifiable so).

    Taj has put up lot of effort to rebuilt the site and catchup with competition, most of it seems to be technical (website and automation related) and lacks substance i.e. appreciate loyalty.

  5. Sanjay – fully agree with you. If you have noticed, the value of the points in cash terms has been made 50% which is a steep fall. I will stay in ITC in future.

  6. @ Ajay and Taj,

    I usually try and stay in a Taj whenever I can within India (TATA group affection, promote Indian brand when I can etc.).

    In fact had been accruing Taj points to redeem for a stay for a special occasion in India next year.

    I am so pissed there was an abrupt change with NO option/notice/time to redeem at old rates (per my understanding, if I am wrong please correct me). For example, on similar lines British Airways recently had a change in their mileage structure but I loved the fact that I got ample notice and time to redeem under the old chart AND the fact that they said all airline bookings made before April 28 would hold old tier earning rates. This way, I could book my World Traveller (Economy) tickets to India early for winter vacation and got the old tier-point rates. Plus, because of the heads up, I had been saving Avios to redeem a Club World ticket for my mom from India to the USA (she has never flown long-haul business class) and I was able to redeem those at old rates as well. Under the new structure, I would have missed out as she is not flying off-season. Needless to say, she is excited about her trip.

    All pros and cons aside, the fact I was not given notice to redeem at old rates is inexcusable and Taj has lost me as a customer for the foreseeable future.

  7. I’ve been a regular reader of your insightful posts but never had the opportunity to comment.

    Earnestly appreciate how you accommodated Taj’s point of view in your blog.

    Reading today’s piece in conjunction with what you’d postes earlier, I feel shortlisted as a TIC Gold status holder.

    If they don’t acknowledge us or appreciate our loyalty, guess it’s Tata to Taj and hello to other chains.

  8. Dear Ajay,

    Thank you for updating your blog with our response to your post. Since you have posted a few other points, below are some points just to address those. We promise to be brief 🙂

    · Increase in Earn Rate – Your comparison with the Zimbabwean currency was actually really funny. However, just to clarify, if you as a Gold member are getting the room at the same rate as before and your earning rate has increased by 12.5%, the entire incremental earn is a saving 🙂
    · Dynamic rate point clarification – The point was that rates will vary by occupancy and members will be able to take a conscious call on when to use them and not necessarily that with dynamic redemptions points will become lower than before.
    · Redemption pricing revision – The points had not been revised for more than 3 years which is why you are feeling the difference in the redemption rate. The rate revision was overdue but we had waited as we wanted to make the program features more up to date before we revise rates.
    · Usage Ratings – We are referring to the outcome of research we carried out with some of our members and frequent travellers in general. For business travellers, each new benefit has very high likelihood of usage.
    · Value Comparison of old program versus new – We actually did it as a part of our research. However, as you will understand, we will not be able to share the specifics here. For this discussion, our submission is that if you do a weighted score analysis of the old program features versus the new ones and take them to a statistically significant sample of frequent business travellers, you will most likely come to the same outcome as we did.
    · Point Expiry for old points –The earlier point expiry was 4 years. All old points are now expiring in 2 years. Therefore, all your old points irrespective of when they were earned will expire on a single date 2 years from now instead of every month for 4 years. The average point expiry date in both cases is 2 years. A point validity expiry is a complex change and we have tried to be as fair as we possibly could.
    · Notice Period – This is a different point altogether. You may not have noticed that while the tier eligibility has been altered, not one member has been downgraded and all members have been retained on their existing tiers for 1 year irrespective of spend levels. The increased payouts of these tiers are actually a significant cost to the program but have been done keeping in mind our responsibility towards our members. A lot of new features have been brought in and there are some additional costs. All of these changes have come together which in our opinion is fair.

    We believe we have stated our case and thank you for giving us the opportunity to do so. We hope to welcome you at a Taj hotel soon and hope you make most of the new program features.

  9. Yes Sid, sadly it has been removed for now. I called today to check on the same and they said it is under review for now.

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