Executive Summary
Hotel loyalty programs have evolved from frequent-traveler retention tools to broad-based demand drivers. While the growth of loyalty program membership may make it harder to target the most highly valued guests, the 2024 data confirms that hotel loyalty programs remain a relatively cost-efficient way to drive occupancy.
A record 21 brand launches and partnerships in 2024 attracted new guests and a variety of new use cases, driving loyalty program membership and hotel occupancy. Membership surged 14.5% in 2024, outpacing room growth and pushing members per room up by 7.4%.
Average member contribution to occupancy rose to 52.8% but room nights per member dipped. More members are staying, but each one is staying less often, likely due to the influx of credit card members and the dilution of the traditional “road warrior.” The challenge is to convert these “retail” travelers into repeat guests.
Members are redeeming points as fast as they earn them, with liability per member falling by 5.3%. Hotels should focus on maximizing redemptions that fill shoulder seasons and drive ancillary revenue through incentives like food & beverage credits, spa perks and exclusive experiences.
Loyalty fees increased by 4.4% last year, outpacing 2.7% revenue growth, but at just $5.46 per occupied room or 1.6% of total revenues, up from 1.58% in 2023. Overall, program costs remain modest.
Membership Expansion Signals Program Vitality
Loyalty programs have evolved beyond just rewarding frequent travelers. Total members grew by 14.5% in 2024 to more than 675 million, outpacing room growth of 6.7%. Members per available room increased by 7.4% to 137, reinforcing the importance of these programs in maintaining occupancy and revenue stability.
The rapid expansion of these programs and the standardization of perks (e.g., free water, free Wi-Fi, early check in/late check out, etc.) have resulted in margin headwinds for owners but have helped maintain guest satisfaction scores since 2016, based on data from a major national hotel guest satisfaction survey.
Balanced Engagement
For the first time in years, increases in loyalty program revenues and liabilities were balanced in 2024 at 8.3% and 8.4%, respectively, reaching post-pandemic highs of $1.2 billion and $2.4 billion. However, liability per member fell by 5.3%, to $17.85, or 11.3% of ADR, down from 21.9% in 2016. This indicates that each member had a relatively small savings of points—just a fraction of a room night—to encourage future redemption travel.
Loyalty-Driven Occupancy Growth
Loyalty members accounted for 52.8% of occupied rooms in 2024, a 2-percentage-point increase from 2023 that far outpaced overall U.S. demand growth of 1.2%. Loyalty programs delivered 12% more room nights year-over-year despite the average room nights per member declining by 4% to 1.0 from 1.1. This shift suggests a growing proportion of members are either dormant, overlap in multiple programs, are infrequent travelers or are earning points through credit cards and partnerships rather than frequent hotel stays.
Cost vs. Benefit: A Good Deal for Owners?
According to data from CBRE’s Trends® in the Hotel Industry, loyalty program fees grew by 4.4% in 2024, outpacing total revenue growth of 2.7%. The cost per occupied room increased slightly to $5.46, making up 1.6% of total revenue (up from 1.58% in 2023). The fee/revenue growth ratio rose to 1.6, above the pre-pandemic peak of 0.9. While costs are rising, these programs still serve as cost-effective “occupancy insurance,” ensuring steady room demand even during low seasons.
Pros & Cons
The broad base of membership diversifies demand sources, insulating against economic cycles. The lower number of room nights booked per member (1.0 vs. 1.8 in 2016) reflects the success of credit card/affiliate partnerships. The proliferation of infrequent guests may make it harder to appeal to high-value guests. Brands will need to work hard to demonstrate they can convert the one-time guest into a more frequent high-value member. The growth in credit card and program fees primarily benefits hotel owners.
What’s Measured Improves
Owners, asset managers and developers should benchmark total program ROI against alternative distribution channels. By measuring the value attribution of loyalty programs, brands can demonstrate their loyalty program’s ROI, owners can avoid overpaying for programs that don’t outperform OTAs and investors can assess whether loyalty-driven assets deserve premium valuations.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
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