Does loyalty pay this summer?

By Matthew Petrie

In May this year, we surveyed the American public on their travel plans for this summer. You can download the full findings in our recent report, ClearSight® on US Travel Intent. One of the most interesting findings was that members of hotel loyalty programs are planning to pay less for their rooms this summer than non-loyalty members. In this blog, we examine these findings and suggest some reasons as to why this might be the case.

At least for this summer season, loyalty program membership does not translate into spending more on a room –with loyal guests planning to spend an average of $56 less per night than non-loyal consumers.

US Hotel loyalty spending

This result is consistent with higher levels of guest loyalty among budget/economy tier users. A similar trend also exists among loyalty program members.

US hotel loyalty by tier

Economy guests are drawn to the brands they know because the consistency of quality and offering is more important at that end of the market. Upscale guests are more eager to search across the market for more choice and a better deal, which plays to OTAs’ strengths.

Mid-market hotels recorded the lowest levels of brand loyalty. Consistency is at its weakest in the mid-market, and guests have to spend more time and energy searching for a hotel that meets their needs.

The big hotel brands have remained front of mind despite the cessation of travel in the 18 months. Holiday Inn Express is the most preferred brand in the budget segment, with Best Western leading the mid-market, Hilton in upscale and JW Marriott in luxury.

Despite the rise of use in the sharing economy during the pandemic, our study found that hotels are set to capture a 70% share of all paid accommodation on trips this summer against peer-to-peer lodging, which account for one in ten paid accommodations.

The sharing economy attracted a disproportionate amount of attention during the pandemic as it was able to take a greater share of travelers with the hotel sector closed. Now that hotels are no longer restricted, consumers have returned to more traditional stays, indicating that the shift was temporary.

You can download the full ClearSight® on US Travel Intent report, or if you have any questions, please don't hesitate to get in touch.

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