Hotel Loyalty Programs

Adoption & Contribution to Bookings 

Share of occupied rooms from loyalty members: industry reports place loyalty members at ~50–53% of occupied rooms (2023–2024) for large chains — a multi-point increase year-on-year in many markets. This highlights how loyalty members can quickly become the dominant demand source. Revinate

Revenue portion: chain studies and H2C/industry reporting indicate loyalty-driven revenue can reach ~60% of a group’s revenue in mature loyalty ecosystems (large chains). Smaller properties will usually see lower absolute percentages but still meaningful uplift when direct booking + loyalty are emphasized. P3 Hotels

Engagement drivers: market research (iSeatz State of Loyalty) finds meaningful segments (e.g., 14% overall, 20% Millennials in one survey) would increase engagement if programs offered better features (sustainability options, easier mobile access). iSeatz

Common Shortcomings & Pitfalls

Costs & hidden economics — loyalty programs have fees and liabilities; owners sometimes underestimate the ongoing per-room cost and the impact on margins. Loyalty fees rose faster than revenue growth in recent reports. Net benefit depends on increased spend and retention vs fees. Hotel Online+1

Low active member engagement — many hotels have large member databases but low active participation (many sign up, few actively use/earn/redeem). This reduces the program’s effectiveness. (Academic and industry Case studies highlight “inactive members” as a recurring issue.) ScholarWorks+1

Complex UX / friction — if enrolling, tracking points, or redeeming is cumbersome (especially on mobile), members disengage. Mobile & PWA-first design is now essential. Knowledge+1

Over-reliance on OTAs for acquisition — properties that don’t convert OTA guests into loyalty members miss the chance to move bookings direct. Large groups actively incentivize direct booking via loyalty to reduce OTA commission leakage. Financial Times

Poor measurement — properties often track enrollments but not the full ROI (incremental revenue per loyalty guest vs non-member, cost per point redeemed, churn). Without those KPIs, programs drift from profit. Sailtech

Lessons learned — what works (actionable guidance)

Make it mobile first and low friction

Use PWAs or lightweight apps so guests can sign up and check status from their phone in <1 minute. Mobile check-in, digital card in wallet, and one-tap booking strongly increase engagement. Knowledge+1

Offer immediate, tangible perks for direct booking

Small, immediate benefits (10–15% app/ direct booking discount, free breakfast, late check-out) encourage guests to book direct and join the program — this is especially effective for SMEs. P3 Hotels

Design rewards that encourage revenue-per-guest growth

Reward not just nights but ancillaries (dining, spa, transfers). Guests who are members tend to spend more and stay longer, so tie points to in-stay spend to lift ADR and F&B revenue. Revinate
Drive active engagement (not just sign-ups)

Use targeted push/WhatsApp messages and pre-arrival upsells. Activate dormant members with time-limited offers and micro-rewards. Personalisation (AI/data) improves take rates. White Sky Hotel Consultancy & Training+1

Measure the right KPIs

Track: % bookings direct from loyalty, incremental revenue per loyalty guest, cost per redeemed reward, churn of active members, and ROI per loyalty campaign. Base program adjustments on these metrics. Sailtech
Control program economics

Model worst-case dilution of revenue from discounts and redemption and set caps/tiers so rewards remain profitable. Consider revenue-based redemption options (discounts, experiences) rather than only free nights.

Practical checklist for small hotels / guesthouses (how to roll out without large cost)

Start with a PWA + loyalty module (low build cost) that supports signup, points balance, booking link, and simple redemptions.  Glowing.io 

Offer one clear direct-booking benefit and a visible progress tracker in the app.

Automate messaging: pre-arrival upsell, in-stay ordering, and a post-stay reward push to rebook.

Measure: track direct booking uplift, redemption cost, and repeat rate at 30/90/365 days.

Sources (key references)

Revinate / industry reporting on loyalty member share of occupied rooms and member spend. Revinate
H2C / industry analysis reporting loyalty can account for up to ~60% of revenue in mature chain ecosystems. P3 Hotels
iSeatz “State of Loyalty” hospitality report — consumer willingness and engagement drivers (mobile, sustainability). iSeatz
Hotel-online / CBRE reporting on loyalty program fees, costs and their growth relative to revenue. Hotel Online+1
Financial/journal coverage of big-chain loyalty pushes (e.g., FT summary of Marriott/Hilton moves to drive direct bookings). Financial Times