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?