Historic Hotels Of America Pushes Plastic To Become More Elastic

WASHINGTON, D.C.— The nation’s collection of its oldest, landmark hotels will soon be trying out one of the newest consumer-driven revenue generators. Historic Hotels of America, a division of the National Trust for Historic Preservation, is poised to roll out a proprietary gift-card program that will enable its members not only to streamline the current gift redemption process, but create dozens of distribution points for the program nationwide. Director of Marketing Tracey Simmons told HOTEL BUSINESS® the initiative, which will utilize a plastic card, is an extension of HHA’s paper gift certificate program, in place for close to three years. Of some 190 members, 110 hotels are on board for the current voluntary “paper” program “It’s been quite successful. Our sales average $5,000 a month,” said Simmons, noting distribution points include HHA’s website and a relationship with giftcertificates.com. “They do a considerable amount of business for us, about 40% of those sales a month.” Right now, however, that program is only a redemption process at the property level. “All we ask them to do is redeem them. We reimburse them 90% of that rooms revenue, and we keep 10% to operate and market the program, and pay for all the expenses involved in fulfillment,” said Simmons. The process also is considered cumbersome from a labor standpoint, not only at the fulfillment-house level but at the property level as well, where the gift certificate paper trail must be strictly monitored. “Most of the hotels have gone to some electronic process as well, but they’re limited to sales and redemption at their property only,” said Simmons, adding there is no cross-marketing, except with chain property members. “And we were not using our hotels to sell them because of the paper accounting nightmare. There was no way we could ask these independent hotels to set up books for an outside gift certificate.” With the new gift card, every transaction will be done electronically via a central credit-card processor, First Data Merchant Services, a subsidiary of SunTrust, with technology handled by Tennessee-based ValuTec. “First Data is in the perfect position. They already do electronic money transfers,” said Simmons, noting First Data approached HHA some 14 months ago about transitioning to plastic gift cards. Once the gift card initiative is launched, the paper gift certificates will be phased out. “We will continue to redeem them until the two-year expiration date of the last one sold, and only at the hotels that agree to redeem paper,” said Simmons. Some hotels that are doing paper are not switching over to plastic, she added, so not all the same hotels will participate in the new program. “Obviously, the advantage of the plastic is we can now ask all these distribution points to help us sell them. Therefore, it becomes a mass-marketing opportunity, where before it was a nice, little program,” said Simmons. Currently, there are 36 properties signed up for the program, which HHA hopes to launch in March. “We wanted to get to 50 hotels to make it critical mass for the customer. We want to be able to give them at least 50 choices. We give them 110 now [with the paper certificates].” As an incentive, participating hotels are being provided with some $500 worth of services, funded out of the HHA budget. It includes the gift-card processor and the setup fee to load the software into the property-specific processor, which houses the hotel’s banking information. The hotels can use the same setup for a proprietary card that they can sell on premises. HHA will provide the cards as well as collateral to promote the program. “They don’t have to pay for anything to get set up to sell the national HHA card,” said Simmons. “The reason we did this is because they’re doing it to support the brand as a whole, and to obviously increase redemptions because more cards will be out there.” Both programs are optional. “The advantage to the hotel is it can now