In reference to Starwood Hotels and Resorts Worldwide’s decision to expand its Preferred Guest Program by offering new features - no blackout dates, no capacity control, paperless rewards, and hotel reimbursement- that might increase operating costs and lead to higher staying costs. The imminent problem for Hilton is whether to compete point for point or take a different approach to its existing reward program in order to be distinct from Starwood.

Below are recommended action plan for your consideration, towards the implementation of a balanced program in order to gain a competitive advantage, whiles retaining our valued guests.

The Solution:

Instead of matching with Starwood's new strategy, Hilton should take a different approach to its existing loyalty program and focus on how to make it more attractive in order to maintain its current customer base and to attract new ones. There are two reasons why this solution is the best:

• Starwood has been trying to develop the Starwood brand. On the other hand, Hilton HHonors guest reward program has a competative advantage over Starwood's program because Hilton's loyalty program has been successful compared to others in the hotel industry. The most important feature of the program that distinguishes itself from competitors is Double Dipping which lets guests earn milage for the same stay in partner frequent-flyer programs. Hilton is the only hotel chain that offers this opportunity. Additionally, becoming a loyalty program member gives another advantage to Hilton's program. In as little as 4 stays per year, or 10 nights, membership is granted to HHonors. Customers have to stay 25 room nights or have 10 stays per year to become a member of Starwood's loyalty program. Consequently, if the customer chooses Starwood, he or she has more waiting time to use his or her points while paying very high staying cost