Everybody wants to travel and stay at the best possible hotel, according to their personal preferences. Great news for hotel loyalty programs, one would think. But(!) it also poses a few challenges, such as the hyper-competitive market environment, the ever-expanding palette of accommodation types and visitor demands, plus the extensive need for fast-tracked digitalization, just to name a few. Hotels are in dire need of loyalty propositions that help them stand out from the crowd, drive engagement, fast-track bookings, and allow data-based personalization. In today’s guide, we’ll explore 8 best practices and 5 real-life examples of industry-leading hotel operators to give you a rundown of currently available solutions, and to inspire your own concept.
Looking for some help creating the perfect concept for your loyalty program? Our easy-to-use, freely downloadable Loyalty Program Concept Worksheet can help with that.
Key Takeaways – TL; DR
- The hospitality vertical is experiencing rapid year-over-year (YoY) growth
- Bleisure travel has emerged as a new industry trend
- Hotel chains, independent operators, and budget-friendly hostels could all utilize loyalty programs
- Hotel loyalty program best practices include gamified challenges, account linking and co-branded credit cards
- 5 real-life examples for your perusal, including Hilton and Hyatt
Table of Contents
Frequently Asked Questions About Hotel Loyalty Programs
What Is a Hotel Rewards Program?
A hotel rewards program is a loyalty program operated by an independent hotel or a hotel chain, aiming to boost customer retention and create long-term preference over its industry competitors.
How Do Hotel Loyalty Programs Work?
Hotel loyalty programs work similarly to airline or department store loyalty programs, encouraging guests to opt in by offering a set of unique, members-only financial benefits and experiential rewards.
How Can a Hotel Increase Customer Loyalty?
By putting experiences and a personalized approach (fully utilizing zero and first-party data, obtained through the loyalty program) into focus. Hotels are able to provide significant value for guests, high enough for customers to actively want to stay with them whenever they travel.
How? Just like in the case of a mileage program, once guests attain a certain status – and its benefits, most of which they can use globally, depending on the hotel – the fear of losing out on something you’ve earned kicks in. This will provide ample motivation, to keep staying with the same hotel (chain) and earn valuable benefits while enjoying personalized experiences.
Which Hotel Chain Has the Best Loyalty Program?
The answer to this question depends on several factors, such as the diversity of the brand portfolio, where guests are able to enjoy exclusive loyalty program privileges, the quality and quantity of partner rewards (an absolute must), the height and difficulty of the point earning threshold, available credit card options, etc. Some of the most esteemed hotel rewards programs are the Hilton Honors, Marriott Bonvoy, Word of Hyatt, Accor, and Wyndham Rewards.
What Are the Challenges that the Hotel Industry Is Facing Right Now?
“Bouncing back” is exactly the phrase we would use when it comes to the hospitality industry. No longer hindered by heavy travel restrictions, global tourism is booming. Yet, it’s clear how rapid growth (the global hospitality market is set to hit $5,816.66 billion by 2027) comes with its own set of challenges.
Let’s see what those challenges are:
- New generations of travelers entering every segment from eco-conscious remote lodgings to luxury resorts, bringing along new types of expectations, like a hyper-personalized on-site approach.
- The need for rapid digitalization and high demand for seamless online booking, contactless stay, and 360° mobile access control.
- Differentiating themselves from the competition in a highly saturated vertical.
- Airbnb is still holding its own despite strict regulations for short-term rentals around the world.
- The surge of bleisure travelers, with a brand new set of demands.
The attractiveness of finding great deals needs to be there for the members. And the most loyal members should get awarded accordingly. But I believe too many programs underestimate the value of opening up the redemptions side of their rewards, making the program relevant for more people and increasing engagement from a bigger population of your member base. For instance through points+cash options. Done correctly this would also help hotels monetize unsold hotel room inventory to a better extent. One way of doing it is to dare giving more of the margin on points your partners buy back to the consumers. Or even better, make yourself part of a coalition that challenge the traditional closed-loop system. Get other business to help fund the discounts and rewards you give to your members
An Emerging Industry – What Is Bleisure Travel?
Accommodating bleisure guests (business travelers extending their trips to incorporate leisure activities) requires a fine balance of providing both business and leisure services to guests. Starting out as a trend, in the past few years, bleisure has grown into its own vertical – with a whopping USD 709.2 billion as of 2024 – thanks to the growing number of remote employees, independent contractors, and digital nomads aiming to make the most of their time at hotel facilities.
Big Hotel Conglomerates vs. Independent Hotels vs. Hostels – Are Hotel Loyalty Programs for Everyone?
The shift towards budget-friendly traveling, bleisure, and all types of international short trips (bachelorette parties, destination weddings, team building activities) disrupted the industry and rearranged the players.
Industry-leading big shots are now offering a wider-than-ever brand selection, casting a diverse net in terms of locations and budgets, just look at Marriott’s extensive hotel portfolio. Independent hotels, like Scandic, are rapidly innovating, focusing on regional growth, while battling huge conglomerates on one side, and the new era of budget-friendly hostels on the other. While the lines between host offerings are increasingly blurred, a well-executed loyalty program can elevate you above the crowd.
How Can a Loyalty Program Support Growth in Each Unique Segment?
They help you highlight your strengths, and offer data-based personalized perks to your loyalty members while allowing you to forge emotional connections through special moments and experiential rewards. Let’s see an example for each segment:
1. Hotel Chains
Resort operators with an extensive brand portfolio could utilize their loyalty program to encourage cross-staying among the brand segments (Premium, Selection, Collection, Longer Stays, Budget-friendly city hotels), and elevate visiting frequency. Their loyalty programs should offer:
- Gamified challenges, for example, encouraging guests to complete a couple of 3-night-stays at 3 different hotels, from different segments of their portfolio.
2. Independent Hotels
Introduce a fully customized loyalty concept that helps you highlight your values and unique offers! Free of conglomerate-level restrictions, show your brand personality to your advantage through your loyalty program.
- Customizing (and optimizing) your tiers – names, thresholds, perks – to fully convey who you are and how you approach your guests, will make establishing a true emotional bond a whole lot easier.
3. Budget-Friendly Hostels
When it comes to city hubs and hostels, a great loyalty program could attract new guests, and serve its purpose of customer retention when it’s able to utilize the city environment and offer low-investment, yet valuable-to-the-guests perks.
Think about it! Hostels are usually utilized on low-cost sightseeing visits, where people usually need access to additional amenities like public transport passes, free luggage storage, free downloadable PDF guides, free Wi-fi, late or early check-in, and free toiletries.
- Create a loyalty program full of useful services (like the above) as perks, providing practical uses for visitors, while not requiring vast investments on your part. Convenience and flexibility go a long way, especially with low-cost traveling!
- Another option could be joining a city-wide coalition program, like the Copenhagen Card.
8 Loyalty Program Best Practices for Hotels to Help Increase Customer Retention
While most hotel reward programs are free to join, loyalty has its price. The most important question you can ask yourself as a stakeholder is: What do guests want most from a hotel loyalty program?
While travelers’ expectations are set to change over time, today’s requirements are clear to see:
- Ease of access to the program itself.
- The ability to conveniently and contactlessly manage their stay on their own.
- Truly unique experiences.
- Freedom of choice when spending their hard-earned points.
- A personalized approach, that takes into account their habits, preferences, and actions.
Hotel reward programs are the perfect marketing tool to enhance customer retention, incentivize second and third bookings, drive engagement, and lock loyalty members in for the long run with clever partner strategies. In this section, we’ll bring you several best practices for creating a unique hotel rewards program that enchants guests all over the world.
1. Create A Tier Structure That Makes Sense
Offering a well-thought-out tier structure is the perfect way to continuously motivate and reward guests for their time and coin spent at your properties. But(!) here’s where it gets tricky: How can you offer instant and valuable member-exclusive perks from the start, without diminishing the overall value and watering down motivation?
Create entry-level attraction:
- Provide a clear loyalty program breakdown on your website. Offer immediate benefits, such as members-only discounts from the start, opt-in point bonuses, and complimentary breakfast for new members.
Immediately incentivize second bookings:
- Upon a loyalty member’s first stay make sure to showcase perks from higher tiers. You can even offer one VIP benefit unlocked if they visit one of your properties again, within the next 30 days.
Set up a realistic threshold, and truly motivate tier ascending:
- Lean on user history to calculate an achievable tier threshold, and gradually increase benefits, incorporating financial benefits and experiential rewards – focusing on exclusivity and convenience – that represent true value and ample motivation for your guests.
2. Introduce the Concept of Rewards Auctions
Offering elusive experiences to every program member – with enough points to bid on them, or the ability to buy them – immediately adds value to your proposition. It enables guests to truly make the most of their hard-earned points and allows them to experience truly special moments, forever connecting those special memories to your brand. It will also drive engagement both within the program and on social media (a valuable form of word-of-mouth if you ask us).
What could constitute an auction-worthy experience? These could be VIP booth concert tickets to in-demand shows (like Taylor Swift’s Eras Tour), courtside tickets to the NBA finals, front-row seats for the next Real Housewives Reunion, or exclusive Paddock Club tickets to the Las Vegas GP. Make sure to offer a wide variety of packages, from entertainment and sport to wellness and lifestyle options.
Allowing members more flexibility on how they use their points is key. Dictating the value allows your top members to have the best access to rewards, while allowing the option to bid allows the members to dictate the value of the reward. Rewards that have high value will burn the most points, while rewards with lower perceived value will be accessible to more members with lower points balances. Enabling choice, flexibility, and exclusivity motivates members and is positive for customers and brands.
There are several methods you can go about auctions:
- Creating similarly valuable packages for the same event – one with a low threshold + bidding, and one for a set point value.
- Offering auctionable rewards and fixed-price items in completely different lanes, like pre-fixed rewards for wellness services and auctionable rewards exclusively for entertainment prizes.
3. Incorporate Gamified Features and Alternative Points Earning
Offering a single way to earn points is definitely not the most innovative (or loyalty-inspiring) way to go for any brand, regardless of the industry. It’s time to move beyond the traditional “points for eligible hotel stays and room charges” proposition and incorporate more ways for guests to earn, and advance through the tiers.
Some of the most popular alternative point-earning mechanisms for hotel reward programs are gamified features, referrals, and reviews:
- Friend referrals, with both parties receiving points.
- Social media contests with hashtags or comments.
- Leaving reviews on travel-focused websites.
- Filling out gamified surveys regarding their preferences.
- Taking on challenges and treasure hunts.
Incorporating features like these will present an easy way for guests to earn valuable points, while providing you with invaluable first- and zero-party data, and also driving engagement and brand awareness.
4. Allow Guests to Take Full Control by Using Your Hotel Loyalty Program App
In a digitally-minded world, ensuring guests are able to easily book and cancel their vacations through hotel websites is the bare minimum. The future is a complete 360° approach from property owners, allowing guests to take full control of their stay with their phones by simply downloading the hotel’s dedicated loyalty app.
It’s a practical and cost-effective venture:
- Provides ultimate convenience to guests, allowing them to fully be in charge of their holiday, to quick-book, check-in, cancel, or upgrade their room anytime on their phone.
- They can save their favorite destinations, rate services, and provide immediate feedback to the staff.
- Offering seamless access, the app will act as a shareable key to rooms or even certain hotel facilities.
- Eliminates the danger and costs of losing keycards.
- Acts as a constant advertisement for the brand and enables push notifications, keeping the company front of mind.
- Allows program owners to introduce games, and digital surveys where they can easily collect valuable data.
5. Personalize Your Offerings
If you’ve visited any airport or central station lately, you can personally attest to the fact that everyone(!) and their cats are traveling these days. It’s not just families and businessmen anymore, but couples, people traveling with pets, digital nomads, luxury travelers, solo guests – the list goes on. Each one with a different set of preferences, booking history, past purchases, and behaviors.
To successfully target the right segments with the correct messaging, you need access to the right data. And the best place to pull these much-needed insights? Your loyalty program. It helps you track and measure every purchase and action your customer takes under the program’s umbrella and even helps you attain elusive zero- and first-party data through gamified profiling. This allows you to tailor and personalize your communication and in-app offerings, elevating the overall customer experience and enhancing your chances of significant growth in bookings. These key capabilities are the ones that truly enable you to personalize your offerings.
Knowing your audience, and being able to obtain a constant flow of up-to-date insights into their actions and preferences will enable you to create the right segments for your personalized messaging. Plus, it offers you a chance to enhance their experience in meaningful, yet low-cost ways by offering small surprises like complimentary anniversary upgrades. It also pays to choose a loyalty platform provider with a wide range of CRM and marketing automation integrations to ensure seamless, personalized communication with your loyalty members.
6. Empower Partner Account Linking and Points Transfer
A relatively new concept on the horizon, more and more hotels and resorts offer their loyalty members the ability to link their digital accounts to popular eCommerce sites, ticket distribution companies, car-sharing services, or even other loyalty programs. By doing this, loyalty members are able to earn, share, convert, and even transfer points from one program to another.
This proposition elevates your program’s value from several perspectives:
- Cross-sector partnerships provide guests with the kind of convenience that could be the ultimate deciding factor in choosing your hotel (allowing them to take care of their stay, travel, and entertainment all under one program umbrella).
- Opens new avenues for innovation (through shared data and diverse expertise), keeping you relevant and ahead of the competition.
- Minimizes points going to waste by enlarging the pool where guests can spend their balance.
- Helps to lock in guests, based on their interests and habits, just think of accounts linked to Ticketmaster, Amazon, or Qantas Frequent Flyer.
7. Present Co-branded Credit Cards
Several of the biggest hotel chains present co-branded credit cards with their loyalty programs, including Marriott, Hyatt and Hilton. These cards work similarly to regular credit cards, while also offering member-exclusive perks to your specific brand. It’s a useful tool from the brand’s perspective since it significantly strengthens commitment to the brand, provides additional data, and can also elevate partner relationships if they’re included in the proposition.
Perks you should offer with your co-branded credit card:
- Immediate status upgrade: New members who sign up for the card start their member journey from the second or third tier.
- Bonus points upon signup: A true classic for a reason, providing the warm fuzzy feelings of an instant reward.
- Exclusive cardholder rewards: Early access to event registration, Point multiplier days, and Cardholders-only experience packages.
8. Enable the Points and Cash Concept for Extra Flexibility
Why not shake things up a bit, and offer carte blanche when it comes to rewards redemption and free night upgrades? Instead of restricting hotel loyalty program members to use their points in exchange for much-desired perks, why not allow more freedom?
Offering the option to “pay” for rewards purely with points, or with a combination of points and cash is the type of flexibility that could be a true USP (unique selling point) for your loyalty program. You could set strict rules, such as a 50% ratio for using cash, or you could even go a step further and allow members to use a slider and set the ratio themselves.
5 Industry-Leading Hotel Loyalty Program Examples
Most hotel loyalty programs are free to join and offer members-only rates, points toward free hotel nights, and points earned for stays and on-property eligible charges. Now let’s go beyond the expected and see the unique elements of five amazing hotel rewards programs
Radisson Hotel Group – Radisson Rewards
Operating 1,380 hotels in 95 countries in the EMEA and APAC regions, Radisson has ten distinctive brands. The brand’s tier-based Radisson Rewards loyalty program sports three segments: Club, Premium, and VIP.
- Guests earn points for their stay and eligible spend, depending on their tier level. For example, Club members earn 8 points per $ spend, while Premium members earn 27 points.
- Radisson Rewards offers distinctive benefits – such as a discount on food and beverages, or a priority line for faster check-in and check-out – from day one.
- Members in the highest tiers are able to enjoy perks like free luggage storage, free breakfast, free upgrades, priority bookings, and exclusive offers at their favorite hotels.
Why it works:
- Members can easily earn Radisson Rewards points for miles/points with several popular frequent flyer programs, making this a highly attractive proposition for travelers.
- They can also buy and gift points, providing flexibility to the program.
- Seeing the most convenient and financially beneficial perks – such as a Discount Booster – in the highest tiers, Club members are constantly encouraged to book more and advance higher.
IHG® Hotels & Resorts – IHG One Rewards
Offering more than 6,000+ destinations, IHG® Hotels & Resorts is one of the biggest hotel loyalty program owners in the world. Their five-tiered program supplies desirable benefits from the start, with guests on the highest level enjoying perks like No Points Expiration, and Rollover Nights.
- Earning points is extremely easy, both during a hotel stay, through promotional offers, and with participating partners.
- Guests are also able to buy points towards reward redemption and tier advancement.
- IHG One Rewards members are able to exchange points for offers from the brand’s rewards catalog, with partners, for digital publications, and even make donations.
Why it works:
- With a wide range of opportunities to earn and spend points, members are motivated to engage because they can almost immediately see the program’s practical value.
- The ability to buy points toward tier advancement is a fairly unique feature since most programs distinctly restrict this option.
- Conveniently using the IHG app and Widget, members can easily manage their accounts, and keep track of their points and benefits.
Marriott International – Marriott Bonvoy
Powering almost 9,000 properties in 141 countries, Marriott offers a wide spectrum of destinations in 5 different segments (Luxury, Premium, Select, Longer Stays, Collections) around the world. Its Marriott Bonvoy™ loyalty program offers amazing perks and membership benefits across six tiers: One entry-level tier, and five additional Elite tiers.
- Members earn points for hotel stays, hosting events (both business and personal), eating out (with more than 20,000+ US restaurants), going on private sightseeing tours, booking transfers, using co-branded credit cards, and more.
- They can also earn and spend points by taking part in the Cruise with Points program, enjoying exclusive offers, and booking cruises with the most popular cruise lines around the world.
- Marriott enables reward program members to link their Marriott Bonvoy accounts to their Starbucks Rewards, earn bonus points, and also transfer points to Stars.
Why it works:
- The Marriott Bonvoy concept emphasizes experiences above all, allowing guests to earn points by going on adventures, and redeem points for exclusive Marriott Bonvoy Moments.
- The program allows loyalty members to make the most of their points, by enabling them to redeem eligible stays using only points, or a mix of points and cash.
- Participating guests are able to purchase, gift, combine, transfer, and donate points.
Hilton – Hilton Honors
With a portfolio of 7,600 locations – and 24 hotel brands – worldwide, Hilton is undoubtedly one of the most significant players in the hospitality arena. Its award-winning Hilton Honors hotel rewards program offers incredible benefits with four tiers, Base and Bonus Points, and account linking options.
- Members earn Base Points for every dollar spent on eligible stays, with point amounts multiplying based on their tier status, plus additional Bonus Points on eligible promotions.
- Guests can pool and gift points to other loyalty members, as well as transfer and convert points to their Hilton accounts from eligible partners, like AmEx.
- Loyalty members are also able to link their Hilton Honors and Ticketmaster accounts to redeem points for live events and desirable Live Nation concerts.
Why it works:
- Hilton Honors highlights exclusivity with amazing experiential perks, such as the Hilton’s Connecting Room Concert series, featuring popular global artists.
- The brand made sure its co-branded credit cards hold real value for members regarding reward redemption as well, offering several Hilton Honors Cardholder Exclusive packages.
- Offering even more variety, members are able to redeem Hilton Honors Experiences both at a pre-set price and during auction bidding.
Hyatt Corporation – World of Hyatt
Operating 1,300 locations worldwide, Hyatt offers an extensive and diverse portfolio for guests. The company’s World of Hyatt hotel rewards program contains four membership tiers, easy point earning, free nights from 3,500 points, co-branded credit cards, reward auctions, and much more.
- Tier status upgradesare based on eligible points or night stay.
- Guests are able to earn double points for FIND experiences, with Bonus Points for Hyatt Credit Card members.
- Loyalty members are eligible to redeem a diverse set of rewards (restrictions apply), such as Free Night Awards, Room Upgrade Awards, or Points + Cash Awards.
Why it works:
- Hyatt offers not just one, but two sets of benefits for members: One for the attained tier status, and one within the Milestone Rewards feature.
- Milestone Rewards further elevates the program by offering extra freedom to members to choose their preferred rewards out of three amazing options (2K Next Stay Award, 2 Club Access Awards, FIND credit).
- Hyatt’s Credit Card offering is incredibly lucrative for loyalty members, offering up to 9X total points at Hyatt Hotels, 2X bonus points on travel and dining, 1 free night every year, plus no foreign transaction fees.
Ready to Offer a Truly Enchanting Hotel Rewards Program?
Look beyond the obvious, and start exploring truly unique ways to enhance your loyalty members’ stay. Offer them diverse opportunities to max out their points with pooling, sharing, gifting, or rolling them over to the next calendar year. Make sure to apply the same logic to rewards redemption, whether it’s enabling a Points & Cash concept, or simply allowing guests to choose their preferred rewards from your portfolio.
Additional advice: Don’t be afraid to think outside the box! While studying your own vertical’s best practices, it also pays to take a look at what works with popular airline programs, department stores, and retail in general. It might not be something you adopt one-on-one, but it might spark an innovative idea you can make 100% your own. Check out our extensive portfolio of industry guides and reviews!
Ready to create or revamp your hotel rewards program? Reach out to our team of experts, who will be able to answer all your burning questions about which features would suit your specific proposition the best. Book a demo or include Antavo in your RFP process.
Download our user-friendly Loyalty Program Concept Worksheet and let’s get brainstorming!
