Eighty-six percent of consumers rate financial rewards and program simplicity as "important" or "very important" to their loyalty decisions, according to Deloitte's 2024 Annual Report on Consumer Loyalty Expectations and Preferences, which surveyed more than 9,800 consumers across the United States, the United Kingdom, India and Brazil. The finding lands as hotel loyalty programs face mounting pressure from rival ecosystems — Airbnb, travel credit card issuers and AI-driven booking tools — that incumbent programs are ill-equipped to counter with points alone.

The data point to a structural problem, not a marketing one. While 73% of consumers say personalized experiences and rewards matter to them, only 60% feel satisfied — a 13-point gap between expectation and delivery. In the United States, the share of consumers who consider personalization important grew by 10 percentage points between 2022 and 2024. Guest expectations are climbing while most programs stand still.

The attrition risk is concentrated among younger travelers. Gen Z and millennial guests are more than twice as likely as older guests to switch loyalty programs for better rewards, simpler structures or more relevant benefits. More than 75% say a high-quality digital experience is essential to any program worth staying in.

What does the data say about paid memberships?

Seventy percent of surveyed consumers already belong to at least one paid loyalty program. Among those who do not, nearly half say they would sign up if the value were clear. The barrier is clarity, not willingness to pay — a finding that directly informs how hotel operators should structure and communicate paid tiers.

Four out of five consumers say flexibility in earning and redeeming rewards is a deciding factor. Any program that erodes that flexibility through point devaluations, confusing tier structures or restricted redemptions is losing members quietly, without visible churn signals. Skift Research notes that rapid program growth across hotels, airlines and credit cards has often come at the expense of declining engagement — more members, but weaker loyalty.

Who are the new competitors?

Airbnb is developing a loyalty or membership program that will not resemble a traditional points scheme. CEO Brian Chesky has said publicly that he favors something closer to Amazon Prime, built on paid membership, instant perks and personalization: "So that every time you use us, we can learn about you, understand you, know you."

A senior analyst at Morningstar Research described a loyalty program as critical for Airbnb "to support its strong network advantage and to address increasing loyalty competition." With HotelTonight in its ecosystem, Airbnb is also moving into hotel bookings — and hotel operators who treat it purely as a distribution partner face a sharper risk: if Airbnb retains the guest data and uses hotel stays to drive trial of its home listings, independent properties gain reach but lose the relationship.

Financial institutions present an equally significant threat. The Skift/Allianz Partners report finds that nearly 50% of U.S. travelers now carry a travel credit card, and 57% cite travel protection as a key factor in card selection. Banks are no longer just rewards partners; they are becoming primary loyalty hubs in their own right. A guest's loyalty may be claimed by their credit card long before it reaches the property.

Where does AI fit in?

AI is becoming the intelligence layer that makes personalization scalable. Booking.com's Smart Messenger and Auto-Reply tools already gather guest, property and reservation data to respond in real time, often before a human agent steps in. A returning guest can find preferences from a previous stay — music, room setup — already in place without asking again.

A new category of "agentic AI" is emerging alongside these tools. Instead of recommending options, agentic systems can monitor prices, compare alternatives and potentially book travel on behalf of the customer. Google and Expedia are investing heavily in these capabilities, and adoption is expected to accelerate over the next few years.

The tension is trust. Deloitte's research shows that while more than half of American consumers are willing to share personal information for a better experience, transparency about how that data is used and the ability to opt out are their top conditions. As AI takes a more active role, the question for operators is whether that knowledge enhances the experience or starts to feel intrusive.

What should hotel executives do?

The evidence points to a clear set of priorities:

• Simplify and deliver visible value. Every point devaluation, blackout date or opaque tier requirement works against retention, especially among guests with no shortage of alternatives.
• Invest in experience architecture. Initiatives like Member Day, which invites guests into corporate headquarters, and Delta Locals, which connects travelers with destination communities, shift loyalty from transactions to participation. Airbnb has leaned into experiences as a core part of its value proposition.
• Deploy AI deliberately. Start with high-visibility, low-risk applications — personalized pre-arrival communication, real-time loyalty program answers, preference memory across stays — and build as guests grow comfortable.
• Design for younger members. Gamification, instant recognition, community features and simplified earning structures address a cohort more than twice as likely to switch.
• Negotiate ecosystem partnerships carefully. The central question is who owns the guest relationship after the transaction. Hotels need clear direct-booking goals so extended reach does not come at the cost of the data that enables personalization.
• Treat data governance as a loyalty feature, not a compliance obligation. Leading with transparency builds the trust that makes personalization sustainable.

The era of loyalty defined by points balances and tier thresholds is giving way to an adaptive relationship between brand and guest. The brands that will win are those that treat loyalty not as a retention mechanic but as a long-term investment in knowing their guests — and as Airbnb's Prime-style program and bank-owned loyalty hubs move closer to launch, that investment is becoming a competitive necessity rather than a differentiator.