Hotel Loyalty Race: Hilton Gains on Marriott

Skift Take

Hilton grew its hotel loyalty program the most over the past five years. Long-term trends reveal who’s ahead and what the effect on hotel owners has been.

Traveler sign-ups for hotel loyalty programs have soared in the past five years, and Hilton and Marriott have enjoyed some of the greatest gains.

Hilton was number 1 in growth: Its membership was up 110% in the five years through September, for a total of 173 million members.

Marriott retained its lead with the most members at 192 million, a 5-year gain of 60%.

Hilton is on track to overtake Marriott in loyalty member counts by year-end 2024. That Skift estimate assumes the two companies maintain their five-year averages in compound annual growth rates.

All of the major hotel groups doubled down on their loyalty programs. Hyatt also showed large growth, albeit from a smaller base. It didn’t reveal membership in 2018, but since 2017, its enrollments grew 110% to 42 million.

Wyndham had 105 million members as of September (up 78%), and Choice Hotels had 60 million members (up 54%).

One can see that generating scale through a combined loyalty program is part of the appeal to Choice Hotels’ management in potentially merging with Wyndham.

Hotel Group Loyalty Members Growth*
Marriott 192 million 60%
Hilton 173 million 110%
Wyndham 105 million 78%
Choice 60 million 54%
Hyatt 42 million 110%*
*Growth for Marriott, Hilton, Wyndham, and Choice is measured over the five years through September 2023. Growth for Hyatt is over six years because of missing data for 2018.

The companies aim to lock in the loyalty of high-spending travelers. Marriott, for example, owed roughly a third of its net revenue to the top 1% of its highest-spending guests in 2023.

Accor and IHG Look to Catch Up

Two of the largest hotel groups in the world, France-based Accor and UK-based IHG, don’t have as large enrollments in their loyalty programs as their U.S.-based peers.

Accor had 89 million members as of June (the most recent figure it released data), up 40% since 2019.

IHG had the weakest showing. It had more than 115 million members in June, up 15% from June 2018.

Their relatively lower growth can be chalked up to three factors: delayed investment, slower expansion of co-branded credit card programs, and a less dense footprint in many markets.

Accor and IHG haven’t kept pace with their U.S.-based rivals in spending on their programs. Accor made its first revamp and concerted marketing push in 2019. IHG’s push came in 2022, which led to a 30% year-over-year jump in the pace of enrollments.

Accor and IHG were also late to creating vibrant co-branded credit cards. Marriott and Hilton got programs in place before the pandemic hit.

When stuck at home, consumers spent heavily on goods and services with co-branded credit cards, racking up points in hotel loyalty programs. Marriott has 10 co-branded credit cards worldwide, while Accor and IHG have a couple each.

Hotel Density Matters

Hotel loyalty programs aren’t as large as airline frequent flier programs because there isn’t as much consolidation in the industry, and travelers tend to stay at more hotels than they fly different airlines.

Scale matters. The largest hotel groups, like Hilton and Marriott, have such intense density in key markets in the U.S. that consumers find them unavoidable. This helps to drive sign-ups.

Outside of their home countries, Accor and IHG generally don’t have the same density in major cities and generally face more competition from the independent hotel sector.

Questions for Hotel Owners

Marriott International says that Marriott Bonvoy has the lowest loyalty charge-out rates in the industry. That means that the fees it charges hotel owners for guests who earn or redeem Marriott Bonvoy points are lower than what competitors charge their owners.

The fees aren’t publicized, but 4.5% of each paid booking is typical.

Yet the profit picture is complicated for owners. At all of the major hotel groups, loyalty reward redemptions are typically reimbursed at less than a room’s market rate, for example. If demand is high from paying customers, an owner could miss out on the maximum revenue available.

Hotel groups counter that loyalty programs help drive direct bookings overall, which benefits owners. And repeat customers who are members tend to book directly, sparing the high cost of commissions from online travel agencies.

Some research suggests that loyalty program fees as a percentage of total costs are still generally lower than commissions that online travel agencies charge, which can be in the 11% to 30% range. But if you run an economy hotel in a non-leisure destination, you may contribute more to a loyalty program than you’re receiving in reward-redeeming guests.

Accommodations Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.

Read the full methodology behind the Skift Travel 200.

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