Designing a Hotel Loyalty Program That Actually Increases Revenue

In today’s travel landscape, guest loyalty isn’t just about getting someone to come back—it’s about convincing them to book with you in the first place. Traditional points-based loyalty programs are losing their edge, especially with leisure travelers who don’t travel frequently enough to benefit from long-term accumulation. If your program is still built around future rewards, you might be missing the opportunity to turn lookers into bookers—and OTAs into afterthoughts. To design a hotel loyalty program that builds revenue, ditch traditional points-based rewards and update your strategy for immediate perks and personalization.

What Travelers Want Out of Hotel Loyalty Programs

According to the 2026 TravelBoom Leisure Travel Study:

• 64% of travelers say instant discounts are the most appealing loyalty benefit.
• 61% value free perks like Wi-Fi, parking, or late checkout.
• Just 45.6% are drawn to traditional points-based rewards.

Today’s guests want immediate value. They want to feel rewarded now, not after 10 stays and a complicated redemption process. And they want those rewards to feel personal, tangible, and worth booking direct.

Why Traditional Loyalty Falls Flat

Most legacy loyalty programs were designed for business travelers and road warriors – people staying weekly and racking up points quickly. But the average leisure traveler takes 1–2 trips per year. For them, a points-based model feels irrelevant or out of reach.

Worse, it often creates friction. If the best benefits are reserved for high-tier travelers, first-time or infrequent guests have little incentive to join, engage, or book direct.

What Modern Loyalty Should Look Like 

To convert and retain today’s traveler, your hotel’s loyalty strategy should offer:

• Immediate rewards for direct bookings: Discounts, free breakfast, or a guaranteed late checkout can move the needle.
• Surprise-and-delight perks: Think welcome drinks, early check-in, or personalized notes. These create emotional impact.
• Personalization at scale: Use past stay data or booking preferences to tailor the experience—like offering a room on the same floor they loved last time.
• Low-barrier entry into benefits: Loyalty shouldn’t feel like a club you have to earn your way into. Offer meaningful perks even on the first stay.

Examples That Work

• Book direct and get 10% off + a complimentary breakfast.
• Join the loyalty program and get a room upgrade when available: no hoops to jump through.
• Earn a free night after just 2 or 3 stays (not 10).
• Birthday perks, like a free drink or credit to the spa.

Bonus Insight from the Study: Only 7.6% of travelers in the study said that dedicated customer support was a compelling loyalty benefit, suggesting that soft perks matter far less than concrete, in-the-moment value.

Guest Loyalty Isn’t Just About Retention: It’s a Conversion Tool

Too often, hotel loyalty programs are siloed within CRM or rewards departments. But in 2026, your loyalty program is also your sales strategy. Used correctly, it:

• Drives more direct bookings (by offering better value than OTAs)
• Encourages repeat visits and higher spend per stay
• Increases guest satisfaction by making every visit feel like VIP treatment

The TravelBoom Takeaway 

If your loyalty program isn’t influencing a guest’s first booking decision, it’s missing the mark. Shift your thinking from long-term points to short-term value. Create benefits that feel meaningful now. The brands that do will see loyalty not just in theory, but in revenue.

Get the data behind modern loyalty trends.Download the full TravelBoom 2026 Leisure Travel Study here: https://www.travelboommarketing.com/research/2026-leisure-travel-trends-study