10 Key Loyalty Program Metrics for 2024
Explore 10 essential metrics for evaluating hotel loyalty programs in 2024, highlighting their impact on guest engagement and revenue growth.
Loyalty programs are essential for hotels, driving 51% of occupancy and boosting spending by 22.4%. But how do you measure their effectiveness? Here are the 10 key metrics every hotel should track to improve guest engagement and revenue:
- Points Earned Per Dollar Spent: World of Hyatt offers the best value at 2.2 cents per point, making it a top choice.
- Value of Redeemed Points: High redemption rates, like Hyatt's 2.2 cents per point, attract repeat bookings.
- Program Availability Across Locations: Marriott Bonvoy leads with extensive global coverage.
- Tiered Membership Levels: Programs like Hyatt and Marriott incentivize frequent stays with tiered perks.
- Expiration Policies for Points: Flexible policies, such as Best Western's "points never expire", keep members active.
- Dining and Wellness Benefits: Perks like Marriott’s Uber Eats partnership drive 11% revenue growth in point redemptions.
- Integration with Mobile Apps: Apps boost direct bookings by 23% and improve member satisfaction.
- Personalized Rewards and Offers: Tailored offers increase engagement and spending by 22.4%.
- Contribution to Occupancy Rates: Loyalty members now account for 51% of total bookings, up 2.5% from 2022.
- Revenue from Loyalty Redemptions: Redemptions generated $1.1 billion in 2023, an 11% increase.
Quick Comparison of Key Metrics
| Metric | Top Performer | 2023 Performance | 2024 Trends |
|---|---|---|---|
| Points Value | World of Hyatt | 2.2 cents per point | Focus on flexible redemptions |
| Occupancy Contribution | Loyalty Members | 51% of bookings | Rising loyalty-driven stays |
| Redemption Revenue | Marriott, Hyatt | $1.1 billion (+11%) | Expanding redemption options |
| Mobile App Engagement | World of Hyatt App | +23% direct bookings | Growing app adoption |
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1. Points Earned Per Dollar Spent
The number of points earned per dollar is a key factor in keeping guests engaged and encouraging repeat bookings. In 2024, major hotel loyalty programs offer varying rates to cater to different types of travelers.
Here’s a comparison of how much value you get per point across popular hotel programs:
| Program | Value per Point |
|---|---|
| World of Hyatt | 2.2 cents |
| Wyndham Rewards | 1.2 cents |
| Marriott Bonvoy | 0.9 cents |
| Radisson Rewards | 0.8 cents |
| Hilton Honors | 0.6 cents |
| Best Western Rewards | 0.6 cents |
| IHG One Rewards | 0.5 cents |
World of Hyatt stands out with a high 2.2 cents per point, making it a top choice for maximizing rewards. Wyndham Rewards, on the other hand, guarantees at least 1,000 points per qualified stay, letting members earn a free night after just 8 stays - ideal for frequent travelers.
In 2023, loyalty program members accounted for 51% of hotel occupancy, a 2.5% increase from 2022. Technology is also reshaping loyalty programs. AI tools now analyze guest behavior to adjust earning rates, which led to a 1.7% drop in average liability per loyalty member last year.
Hotels that offer competitive earning rates along with perks like dining and spa rewards see better guest engagement and more direct bookings.
While earning points is important, how much those points are worth when redeemed plays a big role in keeping guests loyal.
2. Value of Redeemed Points
In 2024, the worth of redeemed loyalty points plays a major role in shaping guest satisfaction and loyalty. Higher redemption rates encourage direct bookings by providing more appealing rewards. Among hotel loyalty programs, World of Hyatt stands out by offering some of the best point values, making it a favorite for budget-conscious travelers.
Here’s a comparison of point values across top hotel loyalty programs:
| Program | Point Value | Notable Features |
|---|---|---|
| World of Hyatt | 2.2 cents | No blackout dates on standard rooms |
| Wyndham Rewards | 1.2 cents | Fixed-rate redemptions |
| Marriott Bonvoy | 0.9 cents | Wide range of redemption options |
| Hilton Honors | 0.6 cents | Points + Money flexibility |
In 2023, loyalty program liability per member dropped by 1.7%, from $19.19 to $18.86. This shift aligns with changing traveler priorities: business travelers now focus on status perks, while leisure travelers value immediate discounts and rewards.
To meet these evolving needs, hotels are adapting their redemption policies. For example, Marriott Bonvoy offers no blackout dates, and Best Western Rewards has introduced no-expiration policies. Members can even earn and use points at participating restaurants, adding more ways to benefit from their loyalty.
Guest satisfaction and retention are now key indicators of how effective point values are. Among business travelers, the average number of room nights booked by loyalty members has returned to pre-2019 levels, showing a rebound in program engagement.
For 2024, hotels must strike a balance between offering high point values and maintaining flexible redemption options to strengthen loyalty and get the most out of their programs.
3. Program Availability Across Locations
In 2024, geographic reach plays a major role in member satisfaction and bookings. Marriott Bonvoy stands out with its extensive property network, delivering consistent perks to members no matter where they stay.
Hotels with broader location coverage often enjoy higher occupancy rates driven by loyal customers, especially in key business travel hubs. For leisure travelers, having access to benefits across multiple destinations makes loyalty programs even more appealing for vacation planning.
| Hotel Chain | Coverage Highlights | Impact on Bookings |
|---|---|---|
| Marriott Bonvoy | #1 in location coverage | Highest loyalty-driven occupancy |
| World of Hyatt | 15% growth in business properties | 6% revenue boost in Q1 2024 |
| Upper-midscale Hotels | 2% loyalty program fees | Strong member participation |
World of Hyatt reported a 6% revenue boost in Q1 2024, fueled by a 15% increase in business properties and a 2% rise in both average daily rate (ADR) and occupancy. This kind of broad coverage not only strengthens member loyalty but also reduces dependence on third-party booking platforms.
In 2023, loyalty program fees averaged 1.5% of total operating revenue. Upper-midscale hotels saw the highest engagement, with fees reaching 2%, highlighting strong member participation across various locations.
To make the most of their geographic coverage, hotels are expanding rewards beyond just room stays. By offering more ways for members to engage, even when they're not booking rooms, these programs build stronger, long-term loyalty.
While having a wide geographic presence ensures accessibility, the next step in boosting loyalty lies in offering tailored benefits through tiered membership levels.
4. Tiered Membership Levels
Tiered membership systems have evolved significantly in 2024, becoming a key way to measure how well programs engage members and drive results. Take World of Hyatt as an example. Their Discoverist, Explorist, and Globalist levels are carefully designed to offer better perks as members climb the tiers, encouraging more frequent stays.
These tiered benefits not only bring guests back but also help build loyalty over time by consistently offering value at every level. The numbers back it up: loyalty members accounted for 51% of overall hotel occupancy in 2023, up from 48% in 2022.
Programs like Choice Privileges stand out for adding perks that appeal to today’s travelers, such as expanded dining options and wellness-focused benefits. Meanwhile, Marriott Bonvoy has fine-tuned its five-tier system (Silver, Gold, Platinum, Titanium, and Ambassador) to better serve a broader range of travelers. This shift reflects changing travel habits, moving away from the traditional frequent traveler who booked 30+ nights a year, toward a more varied member base with different stay patterns.
| Tier Level Impact | 2023 Performance | 2024 Trend |
|---|---|---|
| Entry Level | 1.1 nights per member | Steady engagement |
| Mid-Tier | 15% growth in business properties | Boost in corporate travel |
| Elite Status | 6% revenue increase | Improved premium rewards |
Hotels are also using tiered benefits to address low-demand periods. Offering extra rewards during these times helps fill rooms, while the average loyalty member books 1.1 nights, showcasing the program’s ability to keep guests engaged.
For business travelers, achieving higher status is becoming more important as corporate travel picks up. Hotels that offer clear paths to advance within their loyalty programs are seeing better engagement, especially at business-focused properties.
Modern loyalty platforms are now more personalized, tailoring tiered benefits to match individual preferences. This creates a more dynamic and engaging experience for members.
While tiered benefits are a big driver of loyalty, how programs handle points expiration also plays a major role in keeping members satisfied.
5. Expiration Policies for Points
Best Western Rewards has set itself apart with its "points never expire" policy. This approach has built stronger relationships with members and is influencing how other hotel chains are planning their policies for 2024.
Point expiration policies are becoming a key factor in evaluating loyalty programs. Marriott Bonvoy and IHG One Rewards use time-based expiration rules, striking a balance between keeping members engaged and managing the financial impact of long-term point liabilities.
Hotels have noticed a rise in direct bookings as members rush to use their points before they expire. Programs like World of Hyatt add flexibility by allowing point transfers to airline partners.
| Program Feature | Impact on Metrics | 2024 Trend |
|---|---|---|
| No Expiration | Boosts member satisfaction | Gaining traction |
| Flexible Transfer Options | Better point usage | Increasing demand |
To keep members informed, hotels now rely on automated notifications about point expiration. Wyndham Rewards pairs its expiration policy with no blackout dates for award nights, making it easier for members to stay active.
Hotels are also tapping into advanced tools like data analytics and AI to refine their expiration policies. These technologies help analyze member behaviors, redemption patterns, and engagement data, ensuring policies are both member-friendly and sustainable.
Looking ahead to 2024, the shift is toward more flexible and member-focused policies. Hotels are prioritizing engagement over rigid expiration rules, recognizing that adaptable point policies are key for a successful loyalty program.
With mobile apps increasingly offering expiration tracking and other loyalty features, technology is playing an ever-growing role in improving the guest experience.
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6. Dining and Wellness Benefits
Dining and wellness perks have a noticeable financial impact. Last year, loyalty point redemption revenues jumped 11%, climbing to $1.1 billion from $982 million in 2022. These benefits are key to keeping members engaged and ensuring the success of loyalty programs.
Marriott Bonvoy has reshaped dining perks by teaming up with Uber Eats. This partnership lets members earn points on food delivery orders, increasing engagement significantly. Hotels report higher participation from members who value the convenience of earning points both on and off property.
Hotels with strong dining and wellness programs saw loyalty members account for 51% of occupancy in 2023, compared to 48% in 2022. That 3% growth highlights how these offerings improve guest satisfaction and encourage repeat visits.
| Benefit Type | Impact on Revenue | Member Engagement |
|---|---|---|
| On-Property Dining | High direct revenue | Strong daily engagement |
| Food Delivery Services | Moderate indirect revenue | Consistent off-property use |
| Wellness Amenities | Premium revenue streams | Weekly or monthly engagement |
Hotels are using tech platforms and partnerships to fine-tune these benefits. By analyzing redemption trends, they adjust offerings to fit member preferences. Collaborations with local wellness providers and top-tier dining venues also expand earning and redemption options, adding more value to loyalty memberships.
Wellness experiences that combine fitness, spa services, and nutritious dining give hotels an edge. These offerings appeal to health-focused travelers, boosting engagement and setting loyalty programs apart.
To keep up with these expanded benefits, hotels are turning to mobile apps to make access easier and more seamless for members.
7. Integration with Mobile Apps
Mobile apps have become the go-to platform for engaging with loyalty programs, combining ease of use with tailored experiences. They serve as all-in-one hubs, making loyalty programs more accessible and effective.
Key metrics for evaluating mobile app integration include:
- Daily active users and time spent on the app
- Conversion rates for direct bookings
- Adoption rates of digital services
- Member satisfaction scores (including trust in data security)
- Frequency of reward redemptions
For example, the World of Hyatt app boosted direct bookings by 23% by using data insights to better engage members.
Mobile apps offer a variety of features that directly influence loyalty metrics. Here's how:
| Feature Category | Functionality | Impact on Metrics |
|---|---|---|
| Account Management | Points tracking, tier status | 92% member satisfaction |
| Booking Experience | Direct reservations, room selection | 31% increase in direct bookings |
| Digital Services | Mobile key, check-in/out | 47% reduction in front desk wait times |
| Personalization | Custom offers, preferences | 28% higher engagement rates |
The Hilton Honors app, for instance, introduced exclusive in-app rates, achieving a 34% conversion rate among first-time users. By analyzing redemption patterns, hotels can tailor offers more effectively, leading to a 41% uptick in reward redemptions.
AI-powered tools now play a key role in improving personalization and streamlining member interactions. These advancements have helped loyalty-driven occupancy grow to 51% in 2023.
As mobile apps continue to simplify interactions, personalized rewards and offers are driving stronger member engagement and loyalty.
8. Personalized Rewards and Offers
Personalization plays a major role in loyalty program success, with 44% of consumers choosing hotels based on personalized rewards.
Key Metrics to Watch:
| Metric Category | Measurement Focus | Impact on Program Success |
|---|---|---|
| Guest Engagement | Reward redemption rates | 22.4% higher spending |
| Program Value | Points utilization | 10% average savings on stays |
| Member Behavior | Booking preferences | 28% longer stays |
| Revenue Generation | Incremental spending | 51% loyalty-driven occupancy |
Hotels are using AI-driven analytics to make personalization more effective. For example, Marriott Bonvoy teamed up with Uber Eats, offering personalized dining rewards that boost engagement.
The World of Hyatt program excels in personalization by analyzing:
- Guest preferences
- Timing of reward redemptions
- Engagement with different reward categories (like dining, stays, or wellness)
- Responses to tailored offers
"Hotel rewards programs are free to join, and WalletHub's latest research shows that the five best programs save members an average of 10 percent on their hotel spending."
This stat underscores the financial perks of personalization, giving hotels a benchmark to assess how competitive their programs are.
To refine these metrics, hotels are adopting advanced tools to track personalized offers. Modern loyalty platforms monitor both on-property and off-property interactions, focusing on:
Technology-Driven Insights:
- Campaign conversion rates
- Individual offer responses
- Performance by member segment
- Digital engagement trends
Take Wyndham Rewards as an example. Their guarantee of at least 1,000 points per qualified stay sets a clear baseline for program value, while personalized offers keep members engaged across different tiers.
9. Contribution to Occupancy Rates
Loyalty programs are playing a bigger role in boosting hotel occupancy rates, with recent data underscoring their growing impact on bookings and revenue. CBRE's 2023 study reveals that loyalty members now contribute to 51% of total occupancy, a 2.5 percentage point rise compared to the previous year.
Hyatt's early 2024 performance highlights how effective these programs can be. Their business travel segment saw a 15% increase in bookings at business transient properties, along with a 2% uptick in both average daily rate and overall occupancy. Key performance metrics illustrate this impact:
| Metric | 2023 Performance | Operational Impact |
|---|---|---|
| Loyalty Member Occupancy | 51% of total | Major revenue contributor |
| Average Room Nights | 1.1 nights per member | Return to pre-pandemic levels |
| Business Travel Growth | 6% increase | Boosted weekday occupancy |
| Program Liability per Member | $18.86 | 1.7% YoY decrease |
Travelers are shifting their focus from discounts to status perks, and hotels are responding. By expanding earning opportunities, improving benefits for business travelers during slower travel times, and offering redemption options beyond hotel stays, hotels are driving higher occupancy rates.
Interestingly, while overall liabilities for future point redemptions rose by 9.3% in 2023, the average liability per member dropped to $18.86. This reflects better program efficiency and increased redemption activity.
Hotels are also using data analytics to fine-tune loyalty-driven occupancy strategies. By analyzing booking trends, member preferences, and slower travel periods, they can craft targeted incentives to fill rooms more effectively.
With loyalty programs boosting occupancy, the next challenge is examining how redeemed rewards impact overall revenue growth.
10. Revenue from Loyalty Redemptions
In 2023, hotel loyalty program redemptions brought in $1.1 billion, an 11% increase from $982 million in 2022. Here's a closer look at the numbers shaping this growth:
| Metric | 2023 Performance | Year-over-Year Change |
|---|---|---|
| Redemption Revenue | $1.1 billion | +11% |
| Program Fees | $2.3 billion | +14.3% |
| Average Member Value | $18.86 | -1.7% |
| Member Contribution | 51% of bookings | +2.5% |
While loyalty program fees rose by 14.3%, the returns have proven worthwhile. Hotels are benefiting from higher occupancy rates and increased spending by loyal guests. To diversify revenue, hotels are offering more redemption options like dining, wellness services, airport lounge access, and exclusive events.
The slight drop in average member value reflects a trend toward more frequent and efficient redemptions. This shift aligns with guest demand for better value, as hotels move beyond traditional point-based rewards to earn revenue from both bookings and additional services.
Dynamic pricing has become a key tool for maximizing redemption revenue. Hotels are adjusting reward night costs based on seasonal demand, ensuring profitability while keeping guests happy. Partnerships with credit card companies are also playing a major role, broadening membership to include less frequent travelers and driving consistent revenue through balanced earning and redemption strategies.
These efforts show how loyalty programs are not just about rewarding guests - they're becoming essential tools for boosting both guest satisfaction and hotel revenue.
Conclusion
In 2024, loyalty programs have become a key driver of success for hotels, with membership growth hitting 11%, far outpacing the global net room count increase of 5%. This highlights their growing importance in the hospitality industry.
Key metrics reveal changes in guest behavior and how loyalty programs are performing. For example, the average member value has dropped to $18.86, suggesting guests are redeeming rewards more frequently and efficiently. To address this, hotels could focus on improving tiered benefits and offering more flexible redemption options. Meanwhile, the rise in members per room to 128 shows these programs are gaining traction with guests.
Modern loyalty platforms are evolving fast, with tools like mobile apps and AI analytics playing a bigger role. Sail, for instance, uses AI to fine-tune loyalty program performance, helping hotels analyze guest behavior and drive direct bookings. Its technology can recommend tailored reward structures based on guest preferences, boosting both engagement and profitability. This reflects a broader shift toward using technology to improve loyalty programs, such as:
- Analyzing guest behavior to refine rewards
- Automating personalized offers
- Improving campaign results across digital platforms
- Increasing direct bookings without extra upfront costs
Programs like World of Hyatt, which maintains a point value of 2.2 cents, show how well-executed loyalty initiatives can deliver strong benefits for both hotels and their guests. Hotels that focus on tracking and improving these metrics while adopting new technologies are better equipped to enhance guest satisfaction and profitability in a crowded market.
As 2024 progresses, expanded earning and redemption options - especially in dining and wellness - are shaping the future of hotel loyalty programs. By keeping pace with these trends and leveraging advanced tools, hotels can ensure their programs remain relevant and effective. The key to success lies in tracking essential metrics, analyzing guest preferences, and staying adaptable to market shifts.
FAQs
How do you measure the effectiveness of loyalty programs?
Hotels evaluate the success of their loyalty programs by analyzing key metrics that focus on member activity, revenue contributions, and customer value. Here are some of the critical measurements:
| Metric | Description | Recent Performance |
|---|---|---|
| Member Value | Average balance sheet liability per member | Dropped to $18.86 in 2023 |
| Redemption Revenue | Revenue from point redemptions | Rose 11% to $1.1 billion in 2023 |
To enhance program outcomes, hotels should monitor:
- Member Engagement: Patterns in point earning and redemption
- Revenue Growth: Contributions to overall hotel income
- Guest Lifetime Value: Total spending by loyal customers
- Program Efficiency: How effectively points are utilized
The World of Hyatt stands out in this area, earning the top rating of 72 out of 100 for 2024 in WalletHub’s evaluation.
What are the KPIs for loyalty programs?
Key Performance Indicators (KPIs) are essential for assessing how well a loyalty program meets its goals. For hotel programs, the most important KPIs include customer retention rates, point issuance ratios, and redemption rates. These figures provide insight into member behavior and program performance, helping hotels refine their strategies.
"Hotel rewards programs are free to join, and WalletHub's latest research shows that the five best programs save members an average of 10 percent on their hotel spending." - John Kiernan, WalletHub Editor
Tracking these KPIs allows hotels to evaluate the program’s impact and make data-driven adjustments to improve guest satisfaction and boost revenue.
