TechnologyDistributionLoyalty-Related Hotel Bookings Surpass 50 Percent of All U.S. Bookings

Loyalty-Related Hotel Bookings Surpass 50 Percent of All U.S. Bookings

ROCKVILLE, Md. — Hotel brand loyalty programs continue to play a major factor in where and how guests are booking their stays. Today loyalty-related hotel bookings account for more than 50 percent of the total hotel bookings in the United States, according to new, full-year 2019 booking data from Kalibri Labs.

Throughout 2019, total U.S. loyalty contribution increased 7.6 percent to 56.2 percent—a jump of 8.3 percentage points or 17.3 percent since the top hotel brands launched aggressive book direct campaigns in 2016.

However, top-line growth rates slowed in 2019, meaning it’s more important than ever for hotels to control their entire P&L and not just their expenses.

“Our goal at Kalibri Labs is to provide the hotel industry with tools and actionable insights to maximize profit contribution and flow through on a daily basis; our December 2019 HIPO report highlights a number of opportunities for hotels to drive additional revenue with a heightened focus on profitability in 2020,” said Kalibri Labs CEO and Co-Founder Cindy Estis Green.

“The first step in that process is the realization that there are opportunities to drive revenue beyond simply raising room rates. Meaningful top-line and margin gains can be made by shifting to a business mix with higher rates and/or lower booking costs, taking advantage of the brand’s loyalty contribution, considering a broader range of competitors by segment, being more aware of longer length of stay business in the market, and making the best mix decisions related to booking curves,” continued Estis Green.

December 2019 and Full-Year 2019 Trends

Demand Growth Exceeded Supply

Growth in hotel demand exceeded supply growth, both in December and full-year (FY) 2019, as evidenced by increases in both guest-paid RevPAR and occupancy.

Booking Window and Length of Stay Compressed

December FY booking window and average length of stay (ALOS) continue to compress, making optimal business mix more important than ever.

Group Demand Slowed

Group demand for FY 2019 increased at a slower pace than growth in overall room nights—1.4 percent versus 1.85 percent. When combined with contractions in both the ALOS and booking window, this suggests that hotels could benefit from targeting group business earlier in the booking window. Growth Outpaced OTA Room Night Growth

Growth in outpaced OTA room night growth by 80bps in 2019, increasing nearly 7.5 percent year-over-year (YOY). Given significant customer acquisition costs differences between these two channels, independent hotels in markets with weak and declining COPE %1 may consider a soft brand affiliation.

Booking Costs Declined Across Upper Segments 

The upscale, upper-upscale, and luxury segments experienced improved acquisition efficiencies with declines in booking costs in 2019, while the midscale and economy segments experienced increases in the costs of hotel bookings.

Consumer Review Scores and ADR Are Linked

Properties with lower consumer review scores, as measured by the Global Review Index2, experienced declines in guest-paid ADR in 2019. Those with the highest ratings (90 percent to 100 percent) exhibited the greatest increases, outpacing overall industry guest-paid ADR growth nearly 2.75:1, demonstrating a link between consumer review scores and ADR performance.

Market-Specific Highlights

New York City remained under pressure in 2019, experiencing declines in guest-paid ADR, occupancy, ALOS, and lead time. In addition, the market’s 48.8 percent loyalty contribution is well below the 56.2 percent national average, driven by heavy third-party dependence, all of which suggests that even a modest increase in direct business through transient or group segments in select time periods would bolster performance.

Phoenix, Los Angeles, and Chicago experienced above-average occupancy gains of 2.2 percent, 2.1 percent, and 1.3 percent respectively in 2019, but failed to translate higher occupancies into impactful guest-paid ADR growth. This suggests opportunity to actively shift business mix to higher-rated and/or lower-cost channels.

Miami experienced a 3.2 percent guest-paid RevPAR decline in 2019 as a result of both occupancy and ADR. Coincidentally, Miami also had the lowest loyalty percentage contribution and YOY loyalty growth of the top 10 markets, at just 48 percent and 5 percent, compared to the 56.2 percent national average and 7.6 percent. This suggests there may be an opportunity for some operators in Miami to better leverage brand channels to promote occupancies and mix to more profitable business.


1 COPE stands for “contribution to operating profit and expense” and measures the total room revenue paid by guests after transaction-specific direct reservation costs have been deducted (i.e., retail commissions, wholesale commissions, channel costs, TA amenity costs, and loyalty investment). COPE revenue does not account for sales and marketing expenses. COPE % is the proportion of guest-paid revenue kept by a hotel after all booking costs have been deducted. COPE % is COPE revenue divided by guest-paid revenue.

2 The Global Review Index (GRI) is the industry-standard online reputation score collected by ReviewPro clients, based on reviews from 175 online travel agencies (OTAs) and review sites in more than 45 languages.


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