Partners hope loyalty program will fly

Two Canadian travel firms have banded together to launch a loyalty program for independent hotels and car rental companies that features the semi-defunct Canadian Airlines International as a core partner. On March 1, Vancouver-based Executive Inn Group, which operates 17 hotels...

Two Canadian travel firms have banded together to launch a loyalty program for independent hotels and car rental companies that features the semi-defunct Canadian Airlines International as a core partner.

On March 1, Vancouver-based Executive Inn Group, which operates 17 hotels in Western Canada and Washington, announced that it, together with VIP International, a Calgary-based firm that operates a worldwide travel reservation system representing more than 3,400 independent hotel and car rental properties, had formalized a marketing agreement with Canadian Airlines and its U.S. counterpart, American Airlines. The deal sets the foundation for a new loyalty program that the partners say will allow the independent hotels and car rental companies served by the VIP reservation system to compete against well-known multinational chains. But first, Executive Inn has to sell them on the idea.

‘All these VIP hotels and car rentals are independent, so they’re all in need of a loyalty program to compete with major chains like Avis or Hilton,’ says Salim Sayani, president of Executive Inn. ‘I think they’ll be very keen to utilize a loyalty program that’s fully automated, has reward partners and is all set up.’

The new loyalty program, called Executive Rewards Club, operates with an Interac-style swipe card that allows members to make purchases in a matter of seconds using accumulated points. Rewards earned at participating properties are redeemable for free car rentals or hotel stays, or can be converted to frequent flyer points under programs maintained by the two airlines.

Because it’s connected to a central databank, the Executive Rewards program also facilitates extensive data mining. Sayani says he expects to have at least half the VIP properties signed up within the next two or three years, creating a potential customer base that numbers in the millions.

Participants are provided with six monthly reports: Program summary, Top 100 customers, monetary value, recency, customer frequency, and demographics. Program summary detail and transaction summary reports are available on request.

Four weeks of beta testing at Executive Inn’s 17 hotels had about 150 customers signing up per day (about 4,500 altogether), and an online registration system is accelerating the pace.

‘This is typically our slower season,’ says Sayani. ‘Come summer we think we’ll be doing a few more than that.’

Despite the uncertain future of Canadian Airlines, Sayani says he isn’t concerned about the integrity of the program’s points. He says he has been assured by Canadian Airlines that Air Canada would honour the points. He admits, however, that he has no written commitment from Air Canada to that effect.

Sayani says Canadian Airlines was selected for the program because it uses Executive Inn’s hotels for its flight staff, and so was a natural choice. At the time the program was being developed, American Airlines owned 25% of Canadian, and the latter encouraged Executive Inns to negotiate a deal with its international partner.

Kraft Heinz beats the street, but reports slight sales slide

The company's Q2 net sales, while down slightly, reveal continued demand for snacks and pre-packaged meals.
Kraft Heinz

Kraft Heinz is reporting earnings of 78 cents a share, beating Wall Street’s estimate of 72 cents a share, thanks to continued demand for snacks and pre-packaged meals. However, the company also reported a net sales decline of 0.5% compared with the same period last year, to $6.6 billion, according to its latest Q2 earnings report, released Tuesday.

The company experienced a favourable 2.3 percentage point impact from currency and a negative 0.7 percentage point impact from its February divestiture of Hormel Foods – including the Planters peanut brand – which closed in the second quarter of 2021.

Its cheese divestiture – which included the sale of its natural cheese division to Lactalis – is expected to close in the second half of 2021, says Kraft Heinz Global CEO Miguel Patricio in this morning’s conference call.

Adjusted EBITDA slumped 5.2% versus the year-ago period to $1.7 billion and increased 6.6% versus the comparable 2019 period. Higher transportation and inflation-related goods costs continue to affect the company’s bottom line.

Kraft Heinz’ organic net sales declined 3.6% in Canada over the last three months compared with a comparable period last year, this as total net sales rose 8.8% year over year. 

However, its overall organic net sales slipped 2.1% compared with 2020 figures. This includes the negative impact stemming from exiting its McCafé licensing agreement. However, this decline was partly offset, Kraft Heinz reports, by “partial recovery in foodservice channels and retail consumption trends.”

“Food service is recovering, and recovering fast,” Patricio stressed in today’s earnings call. He said “the bet to support QSR” early in the pandemic, with individual packets of ketchups and sauces, is paying off.

Channel trends are still normalizing, he warns, and it’s too early to see how at home or away from home, will net out. “We have big ambitions for away from home business,” he said. Consumers continue to evolve how they eat, with Patricio saying that Kraft Heinz is collaborating with a popular DTC brand for its Philadelphia cream cheese.

Accrued marketing costs, the company reports, rose to $968 million from $946 million in December 2020.

“We are investing more in our brands, and better as well, building a much more creative company,” Patricio reported.

Kraft Heinz is also strengthening and diversifying its media presence, he said, driving repeat rates for those discovering and rediscovering the brand. Patricio added that the company is continuing to drive its transformation program forward, modernizing its brands and better connecting with its consumers.