A common theme emerged across interviews with hospitality and loyalty experts: Programs must evolve or risk irrelevance. Tech-enabled personalization and hybrid loyalty frameworks are now mission-critical for hotels, and brand engagement rules are changing.
Generational fault lines: Who still cares about points?
For some travelers, points still hold value—especially among older demographics and corporate road warriors.
“I do think points are still valid,” said Dina Belon-Sayre, president of boutique hotel chain Staypineapple. “People that travel a lot for business are still interested in collecting those points so they can go to really nice, beautiful spots they might not otherwise afford … like going to Hawaii with a few nights on points.”
Younger cohorts, however, are increasingly skeptical of points-based loyalty programs.
“KPMG found that 69% of millennials don’t believe there’s any immediate value [in loyalty programs],” said Adam Harris, CEO & co-founder of Cloudbeds. “It’s either too hard to earn, or the benefits are lost on them. That’s a serious trust gap.”
Niki Van den Broeck, senior product manager at market intelligence Lighthouse, agreed.
“Younger generations are more looking for instant gratification … no longer really willing to wait two years before your first perk shows up,” she said.
A loyalty model under pressure
Allegra Medina, vice president of direct channels at hospitality technology specialist SHR, also sees the value of the points-based loyalty model shifting.
“They’re relevant for really large chains like the Marriotts and the Hiltons that have a customer base that is very global … those corporate travelers are still really earning. They have their own credit card that comes with points,” she said.
But most travelers fall through the cracks, and racking up points doesn’t inspire genuine loyalty.
“They don’t surprise and delight their customers as often,” Medina said. “They don’t recognize their customers except the highest [elite tiers] as often.”
“Elite benefits are often promised but not delivered,” said Van den Broeck. “Late checkout becomes ‘subject to availability,’ and breakfast depends on location. It chips away at trust.”
Prospective franchisees still value a strong loyalty program. However, David Feldman, founder and managing partner at Catchit Loyalty, notes that this value comes at the expense of travelers, as major brands limit benefits and raise the bar on points redemption for perks to manage costs for their franchisees.
“Now you have things like late checkout—except it’s subject to availability, or it’s excluded at resort properties,” Feldman said. “What about free breakfast? It depends if it’s a resort property, or it depends on the brand, or it depends on the geographic location of the property.”
Even so, there’s still a point to points.
“You can’t say the traditional points program is dead and then get rid of it … hundreds of millions of dollars of revenue rely on those equations,” Feldman said. “The real question is: What do you do for the 75-85% of your customer base that’s not sufficiently motivated by that?”
The experience gap: Guests want more than points
Belon-Sayre says the Staypineapple brand’s answer has been to sidestep points entirely.
“We don’t really even have a loyalty program in the traditional sense. We have what’s called the Core—anybody who stayed with us previously and booked directly is in it. They get the best price, period,” she said. “Every single year, just about, we have an in-house discussion about, should we join into a points program … and every year we come down to—for us anyway, we don’t see the value in it with our customer base.”
Instead of chasing distant rewards, today’s guests prefer immediate benefits.
“Recognition is different than loyalty in the traditional sense,” said Belon-Sayre. “People are really looking to be seen, recognized and valued.”
The new gold standard: Instant and personalized
Guests’ growing demand for instant gratification puts pressure on hotels to improve their engagement mechanics.
“Millennials … are going to be a member of a whole bunch of programs, but it’s going to be more based on what they can get today, not what they can get tomorrow,” said Medina. “Instant rewards work really, really well. They’re driving e-commerce. Yet in hospitality, we’re still not doing this.”
Feldman advocates for hybrid structures that layer “instant, milestone, and aspirational” benefits—designed to appeal across demographics and trip purposes.
“We need to make room for emotional hooks and immediate value without abandoning long-term benefits,” he said.
Technology can help, but it’s not a panacea
Delivering nuanced loyalty at scale depends on technology—and most current stacks aren’t cutting it.
“Hotels just haven’t gotten there yet,” said Medina. “Your customer relationship management [system] has to talk to your website, booking engine and property management system. If those systems don’t integrate, you can’t personalize the customer journey.”
Medina added that artificial intelligence (AI)-driven segmentation is already typical in retail but underutilized in hospitality.
“An AI tool that knows you’ve visited 17 times, what you’ve searched for and then surfaces targeted offers—that’s what drives conversion,” she said.
Harris believes AI will unlock value for hotels by enabling micro-targeted offers at scale.
“AI is going to unlock $30, $40, $50 billion in personalization value. It’s listening for signals and translating them into tailored offers,” he said. “It can deliver personalization that you and I as consumers are begging for—and willing to spend more on.”
Cloudbeds is investing in this future with its Signals platform, which uses AI to deliver contextual guest engagement.
“We need to use AI to furnish opportunity moments,” said Harris. “Flash sales, triggered offers, dynamic pricing tied to loyalty status—these tools can maximize value for both guest and operator.”
“The technology gets us there,” said Belon-Sayre. “But it takes the team members to be creative.”
After a significant overhaul of Staypineapple’s tech stack, her team can now share guest notes across properties—critical for delivering individualized service.
“Previously, each hotel worked independently. Now, all of them can see the notes from the others. That lets us avoid repetition and keep surprise-and-delight moments genuinely personal.”
The cultural challenge: Letting go of SOPs
Even with the right tools, implementation requires a mindset shift—particularly for large operators used to standardization.
“As an industry, we’ve lost our passion for the joy of hospitality,” said Belon-Sayre. “Everyone asks me, ‘How do you put that in an SOP [standard operating procedures]?’ I tell them—I don’t. How about no SOP?”
The brand’s approach relies on the staff’s emotional intelligence and cultural fit. “We hire people based on their ability to care, to notice, and to solve problems creatively. Then we get out of their way.”
This approach may not scale quickly—but scale is not necessarily the point of personalization. Harris also notes that the future lies in “layered personalization,” where tech supports human delivery, not replaces it.
Outlook: Flexibility, not uniformity
The consensus across the board is clear: a singular model no longer works. Instead, hotels need layered strategies, modular loyalty frameworks and tech stacks that can flex with evolving guest expectations.
Feldman sees flexibility as the key to scale. “There needs to be instant, milestone and aspirational components. Hybrid loyalty is where this is heading.”
Harris agrees. “It has to be about understanding your guest at a deeper level, and tech has to make that scalable.”
Loyalty isn’t dead—it’s evolving. While the future isn’t all about points, they still have a role to play in the industry. However, so does guest recognition and a tailored response to guests’ needs and desires.
“A discount costs a lot,” said Van den Broeck. “But if you use your data well, you don’t need to offer a discount. You just need to make the guest feel known.”
“The biggest challenge in loyalty today isn’t tech,” said Feldman. “It’s relevance.”
By Marisa Garcia
