Hotel Loyalty Programs: Betting on the Law of Large Numbers

This thorough report by CBRE clarifies the substantial effect of hotel commitment programs on hotel efficiency, supplying important insights for hotel market experts, marketing and sales groups, and service experts.

Regardless of the 5% development in U.S. hotel supply in 2015, an 11% boost in hotel commitment program members led to a 2.5-percentage-point (pp) boost in commitment points' share of overall hotel tenancy.

Commitment programs are ending up being less controlled by regular tourists. The portion of subscription consisted of heavy users (30+ nights a year) is decreasing as the earning of commitment points has actually ended up being more connected with charge card and affiliate programs and less straight with simply regular tourists

Commitment program redemption earnings increased by 11% year-over-year in 2023 to a record $1.1 billion, likely from a mix of increased travel and redemptions, greater ADRs and more points required to make a totally free night.

Commitment program liability per member – the typical dollar worth each member has actually accumulated in unredeemed points – ended 2023 at 87% of pre-pandemic levels.

Overall costs evaluated to hotel owners for commitment program involvement increased by 14.3% in 2023, above the 9.4% rate of overall hotel earnings development. The boost was most likely due to greater space rates, increased commitment member tenancy and greater program charges per occupied space. The typical expense was a fairly modest $3.59 per readily available space per day.

Download the report here.