Hotels Overhauling Memberships Amid Financial Struggles and Benefit Reductions

Hanwha Hotels and Kensington Revamp Membership Benefits
KT Estate Ends Selective Membership
"Hard to Offer More Benefits, Operation Will Be Difficult"

Major hotels in downtown Seoul are reorganizing their membership programs.

According to the hotel industry on the 24th, Hanwha Hotels & Resorts is currently renewing the 'Platinum Membership,' a VIP membership service of The Plaza Hotel. It has been confirmed that service improvements, including enhanced food and beverage (F&B) benefits in response to strong customer demand, are underway.

Hanwha Hotels & Resorts plans to terminate the Platinum Membership service as of January 1 next year, coinciding with this membership renewal. Customers who applied for new membership or renewal by December 31 last year will receive existing benefits for one year, after which the membership operation will be discontinued.

The Platinum Membership provided dining vouchers and discount benefits at major food and beverage outlets such as rooms at The Plaza Hotel and Hanwha Resorts, 63 Restaurant, T1, and Dowon Style. Benefits varied according to membership price tiers, from Platinum (500,000 KRW) to Premier (1,000,000 KRW) and Signature (2,000,000 KRW), and the lowest-priced Platinum membership is being discontinued.

E-Land Park’s Kensington Hotels & Resorts has also started reorganizing its membership program, 'Kensington Rewards.' This free membership assigns tiers (Member, Gold, Platinum, Diamond) based on the previous year's performance. It follows a structure similar to a 'department store VIP tier system,' where more spending results in more benefits. Through this reorganization, continuous benefits for food and beverage outlets and free breakfast coupons will be added and distributed differentially by tier. Additionally, it is now possible to accumulate E-Land points simultaneously, and a new 'Kensington Points' system has been introduced, which can be used at 14 hotel branches nationwide.

Hotels have typically seen significant customer acquisition effects through memberships. This is a 'lock-in' strategy to retain loyal customers at their own hotels when hotel usage declines due to variables such as economic downturns.

However, memberships have prospered mainly among 5-star luxury hotels in downtown Seoul. In particular, luxury hotels with many branches and large scale, such as Shilla Hotel, Lotte Hotel, and Chosun Hotel, expanded their membership base through various benefits. The operation of famous food and beverage outlets that attracted demand for first birthday parties and family gatherings also contributed to the increase in membership customers at these luxury hotels.

For this reason, mid-sized hotels with fewer benefits are said to be reorganizing or discontinuing their memberships. Increased hotel operating costs are also a reason why hotels are renewing their memberships. Due to inflation, food and beverage outlets such as hotel buffets and labor costs have risen, making membership price adjustments essential. An industry insider explained, "Some luxury hotels have recently launched new regional and hotel-specialized memberships, while others seem to have judged that maintaining membership programs is difficult because it is hard to provide more benefits."

In fact, KT Estate, which operates the 'Selective Membership,' announced at the end of last year that it would stop new recruitment. This paid membership, launched less than three years ago, was usable at Novotel Dongdaemun, Andaz Gangnam, Sofitel Seoul, Le Meridien Myeongdong, among others, but the operation has been decided to end. A KT Estate official explained, "As the hotel market is rapidly changing, it seems difficult to use the membership efficiently, so we decided to terminate it," adding, "There are no plans for renewal yet."