A Look at Hotel Loyalty/Rewards

Key Notable Stats

Maximizing Hotel Loyalty Programs: Discover the Perks and Learn How to Choose the Best One for You. Uncover Insights on Points, Discounts, Upgrades, and More.
Maximizing Hotel Loyalty Programs: Discover the Perks and Learn How to Choose the Best One for You. Uncover Insights on Points, Discounts, Upgrades, and More.

So what do hotel loyalty programs typically get you? According to Jill Gonzalez, a WalletHub analyst, “The best hotel rewards programs offer a wide range of perks, including points redeemable for free nights, member discounts, free room upgrades, express check-in, late check-out and free access to health clubs and spas.” Sign us up!

But how do you choose which hotels to join and which ones to be more loyal to, especially when there are so many and they all seem...well, the same! There are dozens of different top ranking lists out there, like Matador Network and Travel Awaits, that are great resources for analyzing the pros and cons of certain programs. Part of their analysis includes rating the hotels’ programs by the number of points earned per dollar spent, multiplied by the value of each point, divided by 100. For example, here is a breakdown from WalletHub:

The top five hotel rewards programs in 2022

  1. Radisson Rewards Americas: 73.1 points
  2. World of Hyatt: 69.6 points
  3. Wyndham Rewards: 69.32 points
  4. Marriott Bonvoy: 62.29 points
  5. Hilton Honors: 60.24 points

To find the best hotel programs, WalletHub used the ten largest hotel chains in the US and assigned point values to five categories for a total of 100 points. The categories were geographic coverage for 15 points, rewards value for 25 points, earning policies for 15 points, redemption policies for 25 points, and various other features for 20 points. Each category was also broken down into subcategories. The analysis also used data from the US Bureau of Labor Statistics, household income data from the US Census Bureau, and the US Travel Association to create three consumer spending profiles for the light traveler, the moderate traveler, and the heavy traveler.

With all this said- who is winning here? Is it the hotel chains or the customers? According to Sung H. Ham, Assistant Professor of Marketing at Michigan State University, “Hotel chains benefit more from hotel rewards programs than consumers. In order to receive significant benefits from the hotel rewards programs, consumers will need to combine their rewards program with a hotel credit card or be a frequent business traveler. The current structure requires multiple stays to receive a free night or to be elevated to a premier tier of benefits. As a result, hotel chains can avoid rewarding the consumer unless the consumer has been loyal and committed over a significant period of transactions.”

On top of the hotels themselves, there’s a third party involved who’s also benefiting heavily - credit card companies. Oftentimes, in order to join a hotel program, you need a credit card connected to it. Some programs even have co-branded credit cards, which allow frequent guests to earn free nights on every purchase they make.

So it sounds like something is a little off here, right? Loyalty programs benefit the hotel, and also the credit card companies, but what about the consumer/guest? Let’s think about how we can benefit them first, instead.

We have a few ideas:

  • Shared programs, networks. Visiting one hotel chain whenever you travel is fairly limiting. Oftentimes, the location of the hotel might not align with where you need to be for your trip, or the rates in one city at this particular chain might be far higher than other options in the area. If these programs were to cohort together and provide shared programs for certain periods of time, this would not only result in higher activation rates for the hotels, but would also be much more beneficial for the users. At Toki, we have built a partnerships platform that allows hotels to create cohort-based loyalty programs, and allows consumers to convert their tokens from one program to another instantaneously.
  • Gift-able + exchange-able. The current loyalty world it totally closed. Wherever you earn, you must spend. We believe this is a thing of the past. The future is an open network that allows consumers to see more benefits from the places they are earning. With Toki, hotels set up white label loyalty programs with our platform. Members are then able to collect tokens from these hotels, but use them however they chose. The consumer can decide to redeem these tokens at the place they earned them, convert the tokens to be used at another location within the Toki network, or even gift their tokens to their friends! Happy birthday to you :)
  • Expiration. Honestly, what's worse than your points expiring on you?! Right now, Best Western and Sonesta Travel Pass are the only major hotel chains whose rewards points do not expire due to account inactivity. We think building a program that is more lenient toward expiration is the best way to service your customer in a meaningful way.

Hotels are certainly leaders in the loyalty space. And even they have room for growth! We've researched the current gaps and make it super easy for brands, hospitality spaces, and other industries to level-up their loyalty game. Reach out if you're interested, we'd love to chat.

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