1 Priority Club Rewards – 25 Years Young

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3 Customer Insights …… Loyalty I want to be rewarded and recognized for my loyalty.

….. 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

5 Customer Insights …… Choice I want as much choice as I can handle. Loyalty I want to be rewarded and recognized for my loyalty. Travel Guilt I want to ease the guilt I feel for being away from my significant others.

6 More Choice: Hotel brands for nearly every type of traveler and overnight stay occasion. Nearly 4,000 hotels in 100 countries Luxury Upper Upscale Upscale Midscale Full Service Midscale Limited Service Extended Stay Upscale Extended Stay Midscale

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

8 Customer Insights …… Choice I want as much choice as I can handle. Loyalty I want to be rewarded and recognized for my loyalty. Utility I want my rewards currency to be as flexible as cash Travel Guilt I want to ease the guilt I feel for being away from my significant others. Control I want it how I want it, when I want it, the way I want it. (the iPod effect)

9 PCR Personal Shopper Rewards The 1 st (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

10 More Control and Utility The 1 st Hotel Loyalty program to offer …. No Point Expiration Real-Time, Paperless Redemption (no certs) via phone or web Point Expiration Reward Certs

11 PCR Any Hotel, Anywhere Rewards The 1 st (and only) hotel loyalty pgm to allow mbrs to redeem their points for any hotel in the world ….. even our competitors’.

12 Customer Insights …… Choice I want as much choice as I can handle. Loyalty I want to be rewarded and recognized for my loyalty. Utility I want my rewards currency to be as flexible as cash Travel Guilt I want to ease the guilt I feel for being away from my significant others. Control I want it how I want it, when I want it, the way I want it. (the iPod effect) Social Currency and Self-Fulfillment I want experiences that expand my world and give me social status / position.

13 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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15 PCR Experiential Rewards

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17 PCR Experiential Rewards

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19 PCR Experiential Rewards

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21 PCR Experiential Rewards

22 Rewards currency trends Rebate Currency Monetary Currency Social Currency

23 A History of Firsts … st points-based hotel loyalty program in the world 1983: 1 st hotel loyalty program to provide a global earn / redeem offer st hotel loyalty program to offer no point expiration st to offer point redemption opportunities with airlines st to launch Personal Shopper rewards st Online rewards redemption catalog st to offer instant rewards - real-time redemption via phone / internet 2002Re-launches as Priority Club Rewards; double-digit growth for 19 qtrs 2004the world’s largest hotel loyalty program st to launch Any Hotel, Anywhere reward st Freddie Award for “Program of the Year”

24 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 BUSINESS TRAVELER BEST HOTEL REWARDS PROGAM - US

25 So, where to next ?? DEEPER CUSTOMER RELATIONSHIPS Greater focus on customer intimacy –Segmentation / mktg automation / CRM –Social Marketing ALLIANCES More / Stronger partnerships to interact with customers on activities that are important to them MONETIZING TOUCHPOINTS Creating value from every customer interaction IN-HOTEL DELIVERY Creating a better experience on-property

26 Multi-Brand & Relationship Marketing Multi-Brand and Relationship Mktg Loyalty Pgms CRM & Multi-Brand Mktg Alliances

27 Here’s to 25 years of success ….. ….. And 25 more …… Al Groves

28 Time for a break …