Global Hotel Alliance, now 20, seeks corporate niche

Notes: This story first appeared on Business Travel News. On July 17, the Global Hotel Alliance reported room nights growth of 13.4% in 2Q24 and up 17.3% year to date; total 1H24 revenues of $1.3 billion versus $1.1 billion in 1H23; and a loyalty program enrollment increase in 2Q of 20% to 27 million members.

DUBAI - The Global Hotel Alliance network of independent hotels, founded 20 years ago, in recent years has continues to grow, adding properties throughout the world and reaching a new peak in 2023 in bookings under its GHA Discovery loyalty program.

The network, which includes hotel companies like Kempinski Hotels, NH Hotels and Pan Pacific Hotels and Resorts among dozens of others, has established partnerships with travel management companies including American Express Global Business Travel and BCD Travel to help it compete against large global chains for a share of international business travel.

GHA CEO Chris Hartley last month during New York University's annual International Hospitality Industry Investment Conference in New York spoke with BTN managing editor Chris Davis about the state of the network, business travel trends and the promise of direct booking. Edited excerpts follow.

Business Travel News (BTN): What's the status of the alliance in terms of membership?

Chris Hartley: The alliance is now celebrating its 20th anniversary. We've been around a long time, but it's a little bit like the oil tanker analogy: We've been moving very slowly, and we're not necessarily the most recognizable brand out there. But we've, nevertheless, over the last 20 years, managed to not only bring in but mostly retain lots of wonderful independent brands. We've now got 40 independent brands participating in the alliance, representing around 800 hotels. We are mostly owner-operators, which is quite unique in the industry today. Out of the 800 hotels, probably over 500 of them are owner-operated.

They all have a lot in common, namely this desire to self-preserve as independent. The alliance has been pretty successful at providing a platform for them to collaborate. We are basically a sharing economy. As we share data, we share technology, we share a common currency under the loyalty program. Every alliance member has to adopt that sort of marketing technology platform that we provide.

The loyalty program is our core product, but we're very much supporting them in terms of driving business travel through relationships with TMCs [travel management companies], which we manage on behalf of the alliance members.

BTN: Are you still looking to actively expand the alliance?

Hartley: Very much. We have 800 hotels today. My current optimistic prediction is that by the end of next year we'll hit 1,000 hotels. I am pretty confident that with the current growth path we'll achieve that number. Not that we really have a growth objective… We're not going to just sign a brand because it's nice to have an extra brand. It's got to fit with the spirit and mindset of what the alliance is all about.

My current optimistic prediction is that by the end of next year we'll hit 1,000 hotels. I am pretty confident that with the current growth path we'll achieve that number. Not that we really have a growth objective… We're not going to just sign a brand because it's nice to have an extra brand. It's got to fit with the spirit and mindset of what the alliance is all about.

Chris Hartley

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This market is difficult because there's not a lot of independents left. The challenge for us is, the U.S. is our No. 1 outbound market by far. But unfortunately the U.S. market is a difficult one to get a strong hotel presence, because like every brand is affiliated to Hilton or Marriott or wherever. We're looking at opportunities in this market to build relationships through partnerships. TMCs are a very good way… It gives us huge customer base volume in this market, which is great. It helps build awareness of the alliance across North America.

But certainly in terms of outbound business travel from the U.S., in the absence of a strong brand presence, we focus on relationships like with American Express and BCD.

BTN: What do the partnerships with TMCs entail? How do they actually work?

Hartley: We're effectively doing leverage buying on behalf of the alliance. We're going to Amex and saying, we would like to do a global referred partnership for all of our hotels, or all the ones that want to participate, which are most of them. We would like to get a preferred deal whereby we're global preferred status, which will give us more visibility.

For Amex, the advantage is that for them to knock on the door of 40 independent small brands and do a sensible partnership with them is not really in their interest, efficiency-wise. It's a win-win. We come to Amex and say, here's 800 hotels that want to participate. In return, they're giving smaller brands access to this global partnership deal.

Then secondly, the loyalty program is important. Corporate travelers are very loyal, especially U.S. corporate travelers. We are playing on a much smaller scale, but we want to be able to offer the visibility to our brands and a loyalty program that at least semi-competes with some of the big programs.

BTN: Does the loyalty program allow you to market directly to the corporate traveler, bypassing the TMC?

Hartley: It does. Obviously the TMC partnerships and other partnerships with their travel agency communities is important and sacrosanct. We recognize those customers. But yes, to answer your question, we now have a database of 27 million, 2.2 million here in the U.S., and we have the rights to market to all of them. That means we can create consumer-direct relationship with people, especially leisure travelers.

For example, Anantara Hotels & Resorts is more a of resort brand, so you're not getting a lot of business travel going to their hotels. Through the loyalty program, we have the ability to market to consumers who are maybe going skiing, or playing golf, or going to the Maldives, or whatever it is. The loyalty program is then the hook to get consumers to give us that data. Then from there we're able to market across all the brands.We're very much measuring as a KPI cross-brand movement.

BTN: What's your view of the business travel market and demand?

Hartley: First I would say business travel was, for us globally, very slow to recover. You've heard that everywhere. The U.S. market recovered the fastest and domestic everywhere—Australia, China, U.S., U.K.—all of those markets recovered to 100 percent of 2019 levels by the end of 2022, domestic only.

But if you look at international, we've only seen 60 percent to 70 percent recovery. Markets like China, it's only this year that we're getting to about 60 percent recovery for international business travel.

BTN: Is that bookings or revenue?

Hartley: Both, really. But I'm generally looking at revenue figures… Strong rates have helped the optics of the recovery, because the revenues have been good or better.

But if you're looking to this year, we've seen a slowdown in U.S. business travel, but we are still seeing strong growth internationally. So international business travel is about 11 percent up this year over last year, which for us is good. That is driven by China and India still recovering. Other markets like the U.S., Australia, and others seem to have plateaued at this point.

BTN: Does the alliance receive requests for proposals? Do you deal with corporate market on that level?

Hartley: All the RFP processes are done by the brands themselves. We basically created the TMC relationship, the pricing model, the contracting, the reporting, the event marketing, the direct marketing that the TMCs are doing, we do all of that. Then they do their own RFPs.

For example, let's say we've got a hotel in Sydney that says, I want to get Amazon, can you help us get the right people [at the TMC] to bid on this RFP for the Amazon deal in Sydney?" Then we are involved in helping them, but we're not actually doing the process.