Hotel Loyalty Programs Face Challenges Amid ‘Points Fatigue’ and AI Transformation, According to Accenture

• A significant portion of hotel loyalty members express dissatisfaction with current programs, citing a lack of perceived value.
• Generative AI is emerging as a tool to enhance personalization and engagement in loyalty programs, appealing particularly to younger travelers.

In a recent survey conducted by Accenture, findings suggest that hotel loyalty programs are experiencing a decline in perceived value among consumers. The survey, which involved 18,000 participants across 14 countries, highlights a growing sentiment of “points fatigue” among loyalty program members, with half of them indicating that these programs no longer deliver the value they once promised.

The report, titled “Me, my brand, and AI: The new world of consumer engagement,” underscores a paradox within the hospitality industry. While loyalty programs are still seen as effective tools for customer retention and brand advocacy, dissatisfaction is mounting. This is particularly evident among younger travelers, such as Gen Z and Millennials, who are more likely to participate in loyalty schemes but also quicker to abandon them if disappointed.

One of the key insights from the survey is the potential of generative AI (gen AI) to transform loyalty programs. Currently, 43% of hotel loyalty members are active gen AI users, compared to only 16% of non-members. These users are more inclined to utilize AI for personal travel needs, suggesting a shift towards hyper-personalization and dynamic engagement in loyalty offerings.

The report also highlights that a majority of hotel loyalty members desire more control over their rewards, with 89% expressing a preference to choose their benefits. Luxury travelers, in particular, have higher expectations, with 90% wishing to shape their experiences.

Emily Weiss, senior managing director and global travel lead at Accenture, notes that brands are increasingly leveraging AI to enhance customer experiences. By using AI to segment customer data and tailor offers, hotels can move beyond traditional points-based systems to create personalized, experience-led rewards. This approach aims to strengthen guest relationships and boost loyalty, ultimately driving repeat business.

As the hospitality industry navigates these challenges, the integration of AI and a focus on personalized experiences may prove crucial in maintaining the appeal of hotel loyalty programs.