Dive Brief:
- As hotel loyalty membership continues to grow, programs that were once used as “frequent-traveler retention tools” have increasingly become a cost-efficient way to drive occupancy, according to an April report by CBRE.
- Hotel loyalty membership across five key brand families — Choice Hotels International, Hilton, Hyatt Hotels, Marriott International and Wyndham Hotels & Resorts — surged 14.5% year over year in 2024 to more than 675 million members, according to CBRE.
- Hotel brand launches and partnerships bolstered loyalty membership growth last year, CBRE noted; however, that growth presents challenges for hotels.
Dive Insight:
A record 21 brand launches and partnerships last year drove loyalty program membership and hotel occupancy, according to CBRE.
The growth rate of loyalty membership in 2024 outpaced room growth and pushed members per room up by 7.4%, CBRE detailed. This gap reinforces “the importance of these programs in maintaining occupancy and revenue stability,” according to the company.
Industrywide, average loyalty member contribution to occupancy rose to 52.8% in 2024, CBRE found. However, room nights per member fell, signaling that despite more members staying, each is staying less often.
Additionally, hotel loyalty programs delivered 12% more room nights last year, despite the average room nights per member declining by 4%. This gap suggests that more 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, according to CBRE.
Loyalty program revenues and liabilities balanced out in 2024 for the first time in several years, CBRE found. But a decreased liability cost per member indicates that each member had a relatively small savings of points (totaling a fraction of a room night), which could hinder future redemption travel, per the company.
Loyalty membership growth, however, adds costs. Loyalty program fees paid by hotels increased 4.4% year over year in 2024, outpacing total revenue growth of 2.7%, CBRE found. Despite this hurdle, loyalty programs “serve as cost-effective occupancy insurance, ensuring steady room demand even during low seasons,” according to CBRE.
Hotels across California, specifically, are already struggling with the rising costs associated with labor and insurance, experts told Hotel Dive last month.
In 2024, several hotel players partnered with outdoor-centric brands, in particular. Marriott, for example, executed a long-term agreement with Trailborn in December. Earlier in the year, Hyatt entered an exclusive partnership with Under Canvas, and Hilton partnered with AutoCamp. Choice, meanwhile, relaunched multiple of its Radisson brands.
As of year-end 2024, the Marriott Bonvoy loyalty program led competing programs by member count, with 228 million members, Skift reported in February. Hilton Honors followed with 210 million members, while Wyndham Rewards had 114 million members, Choice Privileges had 69 million and World of Hyatt had 54 million.
