Personalized Perks Replace Points as Hotel Loyalty Evolves

Traditional points-based programs still resonate with older business travelers, but younger guests want instant, personalized value and will abandon brands that can’t deliver. Surveys from KPMG and market analysts at Cloudbeds show nearly 70% of millennials see little immediate benefit from collecting points, citing slow earning rates and unclear rewards. Boutique operator Staypineapple has responded by dropping points altogether; repeat direct bookers simply enter its “Core,” receiving best-rate guarantees and surprise amenities. Accor and major chains still leverage points to attract corporate road warriors, yet admit elite promises such as late checkout or free breakfast are increasingly hedged by fine print, eroding trust across most tiers.

Hospitality tech leaders warn that ignoring shifting expectations is risky. Cloudbeds CEO Adam Harris predicts AI-driven personalization could unlock up to $50 billion in additional revenue by turning guest signals into targeted offers—flash sales, dynamic upgrades and contextual messaging timed to a traveler’s journey. SHR’s Allegra Medina says hotels must connect CRM, website, booking engine and PMS data or they’ll fail to serve real-time incentives that ecommerce brands have mastered. Lighthouse product head Niki Van den Broeck adds that tech can reduce costly discounts; accurate data lets operators wow customers with relevant experiences instead of cheaper rates.

Hybrid frameworks that combine instant gratification, milestone perks and aspirational rewards are emerging. Loyalty consultant David Feldman recommends layering immediate benefits (welcome drinks, mobile check-in perks) with experiential milestones (spa credits, room-type boosts) and aspirational redemptions (free nights) to motivate diverse demographics without scrapping profitable points for heavy travelers. That flexibility also appeases franchisees worried about rising program costs, as hotels can dial benefits up or down instead of giving blanket freebies.

Implementation hinges on culture as much as code. Staypineapple president Dina Belon-Sayre empowers staff to log guest preferences across properties and deliver unexpected gestures—no rigid SOPs required—while upgraded systems share notes so surprises stay fresh. She argues genuine recognition, not algorithms alone, turns one-time bookers into brand advocates. Still, large groups need scalable tools: Accor invests in AI to push tailored messaging and offers through its ecosystem, while Cloudbeds’ Signals platform hunts “opportunity moments” to prompt upsells and loyalty-friendly rewards.

Generational divides underscore urgency. Baby boomers still chase status nights, but Gen Z travelers—raised on on-demand apps—expect rewards now, not after a dozen stays. If hotels cannot shift from blanket point accrual to real-time relevance, third-party platforms or vacation rentals delivering frictionless perks will siphon share. Conversely, operators that merge data-driven personalization with human creativity can boost ancillary spend and reduce reliance on rate cuts.

The verdict: points aren’t dead, but loyalty must broaden. Programs built around instant recognition, transparent benefits and AI-assisted customization will thrive. Those clinging solely to slow-burn points risk irrelevance as guest expectations outpace legacy models.

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Personalized Perks Replace Points as Hotel Loyalty Evolves

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