Loyalty Is the New Profit Moat in Hospitality
OTAs take their cut. AI agents are lining up to control the next wave of bookings. That's why majors like Marriott, Hilton, Hyatt, and Wyndham are rebuilding loyalty as a direct-channel engine, not a side perk.
The goal is simple: reduce dependency on intermediaries, keep margins intact, and own the relationship. Lower rates, flexible cancellation, bonus points, and first-party data all live on brand sites and apps for a reason.
What the Big Chains Are Changing
- Marriott: Bonvoy expands into exclusive experiences-priority event access, personalized trip planning, and app features that push predictive suggestions. The message: members feel indispensable, and AI can't replicate human-led moments.
- Hilton: Honors adds flexible redemption-points for upgrades, partner airline miles, and experiential rewards. Their app folds perks into search and checkout so the value of booking direct is obvious, even in AI-assisted flows.
- Hyatt: World of Hyatt taps machine learning for tailored recommendations and itineraries. Personalization keeps members in-brand and reduces leakage to third-party agents.
- Wyndham: Value-first approach with simpler points, retail and dining tie-ins, and co-branded cards that earn on everyday spend. It's built for price-sensitive guests who want clarity and utility.
Why Direct Matters to Your P&L
OTAs can charge commissions north of 15% per booking. At scale, that's billions in margin walking out the door each year. Every direct member rate, free-cancel offer, and app-only bonus is designed to pull that back.
Direct also fuels data. Preferences, spend, engagement-everything you need for smarter segmentation, dynamic offers, and higher repeat. Chains report rising direct shares as loyalty-driven reservations climb.
AI Agents Are Becoming Loyalty Gatekeepers
AI systems are getting good at scraping prices, comparing options, and recommending stays. That can push brands into commodity territory, where the cheapest wins. Academic research flags this shift: algorithms can become the new gatekeepers of loyalty if brands don't adapt.
Executives get it. The counter is "sticky" value: human-curated experiences, community events, and perks AI can't easily replicate. App design matters too-if your perks surface cleanly inside search results and booking flows, even agent-driven shoppers see reasons to book direct.
The Data-Backed Momentum
Reports point to growth in direct bookings at the majors. Marriott cites loyalty members driving a large share of stays, with recent quarters showing a notable lift from program enhancements. Hilton's push into experiences has correlated with higher repeat rates.
The takeaway for operators: loyalty isn't a marketing checkbox. It's a distribution strategy tied directly to contribution margin and lifetime value.
Economic Pressure Is Forcing Better Loyalty
Inflation and price-sensitive guests push more searches to OTAs. Hotel groups are responding with member-only discounts, cash-back tie-ins, and everyday earn options via credit cards and retail partners. That keeps your brand present between trips.
In Europe, tighter scrutiny of OTAs is creating room for hotels to push fair-competition-compliant loyalty offers while improving margins. Expect more investment in analytics to compete locally and regionally.
Case Studies: How Leaders Are Executing
- Marriott: Heavier app investment, predictive suggestions, and premium perks behind the login. Internal figures show loyalty members now account for a majority of bookings.
- Hilton: Experiences marketplace-from classes to adventures-trades on emotion and memory, not just points. That's harder for AI agents to flatten into a price filter.
- Wyndham: Straightforward earning and redemption plus partnerships that stretch value beyond stays. This keeps the mid-scale guest engaged without complexity.
Risks You Can't Ignore
Personalization needs data, and data invites scrutiny. Be explicit about consent, retention, and use. A privacy misstep can erase trust faster than any perk can rebuild it.
Some travelers won't join programs. They'll let AI compare everything and pick the cheapest. You still need a plan for casual bookers-low-friction benefits, guest-friendly policies, and instant value with zero commitment.
Global Moves Worth Watching
Asia's mobile-first behavior is a testbed for loyalty UX. IHG and others are tailoring apps to local payment rails and messaging platforms to capture the rising middle-class traveler.
Sustainability rewards are gaining traction-think points for eco-friendly choices and carbon-offset options. It's a subtle differentiator that resonates with a growing share of guests and corporate buyers.
Alliances, APIs, and Owning the Narrative
Chains are exploring broader ecosystems-shared or transferable points, retail tie-ins, and cross-industry collaborations. The goal is everyday relevance, not once-a-year utility.
On the tech side, expect more in-house AI for offer ranking, rate presentation, and CRM triggers that put loyalty at the center. Influence the algorithms by feeding clean, structured data via APIs and by making your best value obvious at a glance.
Operator Playbook: Move Now
- Reprice the channel mix: Quantify OTA drag by segment and set direct-acquisition targets. Tie bonuses to contribution margin, not top-line alone.
- Simplify the value prop: Member rate, flexible cancel, late checkout, and an instant earn. Cut jargon. Surface it early in the search flow.
- Design for AI shoppers: Make perks machine-readable (structured content, consistent naming). Ensure benefits display cleanly when aggregated by third-party agents.
- Build unforgettable moments: Local experiences, partner access, small-group events. Lean into what algorithms can't fake.
- Invest in first-party data: Consent-first capture, unified profiles, and triggered offers. Use machine learning for next-best action and dynamic packaging.
- Tiered on-ramps: Give casuals instant benefits without sign-up friction. Let frequent guests climb quickly with visible milestones.
- Strengthen partnerships: Credit cards, retail, dining, and mobility. Keep earning alive between stays to anchor habit.
- Hardwire compliance: Bake privacy and regional rules into your personalization stack. Audit regularly.
What Happens Next
As AI agents mature, they'll reward clarity, consistency, and true member value. Hotels that treat loyalty as a product-iterated weekly, measured daily-will win back share without sacrificing rate integrity.
The market is signaling support. But momentum fades fast without continuous upgrades to perks, tech, and data. Keep shipping.
Level Up Your Team
If you're building in-house AI for guest acquisition, personalization, or operations, upskilling your team pays off. Explore practical training paths for hospitality roles here: AI courses by job.
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