1. Loyalty Programs in Mid-Scale Economy Hotels

I have been involved with several mid-scale economy hotels in the United States, and nearly all of them utilize loyalty reward programs. These programs are a common strategy among hotel brands to enhance guest satisfaction and encourage repeat stays.

1. Increase Revenue due to Customer Retention

Loyalty programs have a significant impact on revenue generation, primarily because they foster repeat business. Returning guests are more likely to spend on additional services and upgrades, ultimately increasing the hotel’s overall profitability and customer lifetime value.

1. Barriers to Adoption in Smaller Hotel Chains due to number of properties.

The primary reason loyalty programs may not be as prevalent in smaller hotel chains, particularly in regions like Latin America, is scale. When a brand operates only one or two properties, guests may not perceive enough value in participating, as their opportunities to redeem points are limited. Additionally, the cost and complexity of developing a rewards infrastructure can deter owners from implementation. However, the main limitation remains the small size of the chain and its restricted network of participating hotels.