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In today’s highly competitive, technology-driven environment, loyalty programmes play a critical role in driving occupancy, stabilising revenue, and strengthening customer relationships. Loyalty programmes originated in the retail sector during the 19th and 20th centuries and expanded into the travel industry in the 1980s, first through airlines and subsequently within the hotel sector. Initially designed to encourage repeat patronage through points and rewards, hotel loyalty programmes have since evolved into a core strategic asset for hospitality brands.
Hotel loyalty programmes reward returning guests with exclusive perks, incentives, and recognition, creating a sense of value and appreciation. Loyalty membership refers to the number of individuals enrolled in a hotel brand’s rewards programme, where members earn points or benefits in exchange for repeat stays and engagement. However, the traditional model of loyalty — centred primarily on points accumulation — is undergoing significant transformation. Advances in artificial intelligence (AI), personalisation, and digital technology are shifting loyalty programmes toward lifestyle-integrated ecosystems, even as brands face escalating programme costs, rising guest expectations for experiential rewards, and intensifying competitive pressure.
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The scale and growth of hotel loyalty programmes
The continued relevance of hotel loyalty programmes is underscored by their rapid growth. In 2025, the global tourism industry loyalty programmes market was valued at approximately USD 30 billion and is projected to reach USD 65 billion by 2035, representing a compound annual growth rate (CAGR) of 8.1%. This expansion is increasingly driven by rapidly growing Asian hotel groups, whose loyalty membership bases now rival or exceed those of traditional Western brands.
At the brand level, loyalty participation continues to outpace physical hotel growth. Total hotel loyalty members increased by 14.5% in 2024 to more than 675 million worldwide, compared to room supply growth of just 6.7%. Members per available room rose by 7.4% to 137, highlighting the importance of loyalty programmes in sustaining demand, improving occupancy rates, and supporting revenue stability across economic cycles.
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The evolving travel consumer mindset on loyalty
Today’s travellers view loyalty differently than in the past. Rather than actively requesting specific rewards, guests increasingly value benefits that feel relevant, timely, and effortless. After room quality, business and leisure travellers demonstrate distinct priorities when it comes to loyalty.
Business travellers tend to be less price-sensitive, as travel costs are often covered by employers. For this segment, loyalty programmes are particularly attractive because they offer long-term value, such as free nights, upgrades, and elite recognition. Leisure travellers, by contrast, are more price-conscious and selective. They place greater importance on immediate value, flexibility, and experiential benefits that enhance the overall travel experience. These differences reinforce the need for hotel brands to tailor loyalty benefits and communications to specific traveller segments rather than relying on uniform programme structures.
Despite the rise of the sharing economy, most travellers remain cautious about inconsistent quality and safety standards. Established hotel brands continue to provide reassurance through predictable service, security, and quality — factors that reinforce loyalty and trust. While partnerships with sharing-economy platforms may offer opportunities for expansion, execution challenges and brand alignment concerns remain significant.
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The impact of AI on hotel loyalty programmes
Artificial intelligence is reshaping travel distribution and intensifying competition between hotels, online travel agencies (OTAs), and emerging AI-powered intermediaries. Direct bookings remain cheaper to acquire, generate richer customer data, and enable stronger long-term relationships. However, OTAs continue to charge double-digit commissions, placing pressure on already narrow hotel profit margins.
The emergence of AI agents promising travellers the “best rates,” “best deals,” and “best rooms” presents a new challenge. So how does the hotel loyalty programme compete? Hotels that own customer identity can personalise pricing, target offers and retain customers far more effectively than any intermediary. Hotel brands now need to own the customer relationship in an AI-driven economy and the way for that is through more effective and far reaching loyalty programmes.
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Personalised and consumer-centric loyalty models
The most pertinent hotel loyalty programmes today prioritise personalisation, transparency, and real-world value. Advances in data analytics and AI enable brands to move beyond broad segmentation toward individualised offers based on guest behaviour, preferences, and context. This shift allows hotels to deliver relevant rewards without escalating programme costs.
Consumer-centric loyalty programmes also respond to growing demand for instant gratification. Guests increasingly expect immediate recognition, surprise benefits, and flexible redemption options rather than delayed rewards. To meet these expectations, hotels are adopting layered and modular loyalty frameworks supported by adaptable technology stacks that can evolve alongside guest preferences.
Coalition loyalty models further enhance programme relevance. Through partnerships with airlines, car rental companies, financial institutions, and lifestyle brands, hotels enable members to earn, transfer, and redeem points across a broader ecosystem. Marriott Bonvoy’s collaborations with brands such as Uber and Starbucks illustrate how loyalty can extend beyond hotel stays into everyday life. Credit card partnerships, in particular, have become major revenue drivers, with affiliated programmes now generating more points accumulation than frequent stays themselves.
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Challenges and the need for differentiation
Despite their continued growth, hotel loyalty programmes face several challenges. As many programmes offer similar benefits, meaningful differentiation has become increasingly difficult. Rising operational costs, growing member expectations, and the complexity of managing global partnerships all place pressure on programme profitability.
In addition, global loyalty programmes must comply with evolving data privacy and security regulations. Transparency around data usage and robust data protection practices are essential to maintaining trust. Programmes that fail to address these concerns risk undermining guest confidence and long-term loyalty.
Hotel loyalty programmes remain highly relevant in the modern hospitality industry, but their role has fundamentally evolved. In an increasingly AI-driven and intermediary-heavy travel landscape, loyalty programmes provide hotels with a critical competitive advantage by enabling direct engagement, personalisation, and trust. The loyalty programmes that are most pertinent today are those that move beyond points to deliver meaningful experiences, flexible value, and emotional connection — transforming loyalty from a transactional incentive into a strategic cornerstone of hospitality success
