We are halfway through 2026, and I have been looking at the numbers across our partner network. They are not encouraging for hotels still running points-only loyalty programs. Enrollment rates are down 14 percent year over year. Redemption rates for programs that offer nothing but points have dropped to 8 percent on average. And worst of all, the guests who are staying engaged with the old model are overwhelmingly the ones who would have stayed engaged anyway - the ultra-frequent road warriors who are less than 15 percent of most independent hotel guest bases.
The other 85 percent of guests have quietly moved on. They are not angry. They are not writing complaint letters. They are simply booking through OTAs, ignoring the one-size-fits-all loyalty program at checkout, and staying at whatever property the algorithm puts in front of them. The loyalty program that was supposed to build a moat around the direct channel has become a speed bump that guests drive over on their way to Booking.com.
The Mid-Year Data Is a Wake-Up Call
Every year, I see hotel operators treat the first half as a warm-up and the second half as the real season. Summer drives the revenue. Q4 cleans up the books. The strategic decisions that get made in June determine how the second half performs. This June, the decision is clear: are you going to commit to a dual-strategy loyalty model that gives guests the choice between instant rewards and points accumulation, or are you going to spend the next six months watching your direct bookings leak to OTAs while your points balance sits on a balance sheet no one cares about?
The data is not subtle. Hotels that launched dual-strategy loyalty programs in 2025 or early 2026 - programs that offer points as one option alongside instant perks, cash back, and experiential rewards - are seeing 23 percent higher direct booking conversion and 31 percent higher repeat rates within 12 months. Hotels that stuck with points-only are seeing the opposite trend: declining enrollment, stagnant repeat rates, and a growing share of bookings flowing through OTAs where the hotel has no relationship with the guest at all.
Why the Points-Only Model Is Finally Collapsing
The points-only model was built for a travel landscape that no longer exists. It was designed for the 1990s road warrior who stayed at the same hotel chain every week, accumulated points religiously, and redeemed them methodically for predictable leisure trips. That traveler archetype is real, and they are still out there. But they are a shrinking minority of the market. The modern traveler is a bleisure blend, a leisure family, a solo experience seeker, a digital nomad with no fixed travel pattern. Most of them do not want to manage a points balance as their only reward path. Many do not even understand the tier system, and they are not interested in learning it.
But here is what the data actually shows: when points are offered as one choice among several - alongside instant dining credits, room upgrades, spa vouchers, and cash back - the road warrior segment still chooses points at high rates. They are not abandoning the program. They are simply no longer the only segment being served. The business traveler who wants to accumulate toward a free night can still do exactly that. The leisure family who wants an instant dining credit can do that instead. The dual strategy does not kill the points model. It rescues it from irrelevance by making it one path among many, rather than the only path that exists.
We moved from a points-only program to a dual strategy in April - points for our road warriors, instant perks for everyone else. Our direct booking conversion went up 27 percent in the first 60 days. I am not a loyalty expert. I am a general manager who was tired of writing OTA commission checks. The difference was immediate and obvious.
The Three Mistakes That Kill Loyalty Programs in 2026
The hotels that are struggling with loyalty this year are not struggling because they are bad operators. They are struggling because they are making the same three mistakes that worked fine in 2019 and are actively destructive in 2026.
Mistake 1: Treating Loyalty as a Marketing Feature
Loyalty is not a marketing program. It is a distribution strategy. The hotels that are winning with loyalty treat it as an operational system that touches every guest touchpoint, from booking to checkout to post-stay communication. The hotels that are losing treat it as a checkbox on the marketing budget: "We have a loyalty program, we send an email about it, we are done." That is not loyalty. That is a brochure. And brochures do not drive revenue.
Mistake 2: Rewarding Frequency Instead of Actual Behavior
The old model rewards frequency. Stay ten nights, get a free night. The problem is that frequency is not the only behavior that matters. A guest who books direct, spends heavily on property, refers friends, and posts positive reviews is worth more than a guest who stays ten nights on the lowest corporate rate and never opens a marketing email. A dual-strategy loyalty program rewards the behaviors that actually build revenue: direct booking, ancillary spend, advocacy, and repeat visits. The road warrior who wants points can still accumulate them. The leisure traveler who wants instant value can get that instead. Points are not the enemy. Points as the only option is the enemy.
Mistake 3: Ignoring the Mobile Booking Reality
Over 71 percent of summer leisure bookings in 2026 originate on mobile devices. A traditional loyalty enrollment flow that requires multiple clicks, a separate account creation, and a password to remember is a non-starter on a phone. The hotels winning direct bookings have loyalty enrollment built into the checkout flow with zero friction. The guest books, sees the reward options, makes a choice, and is enrolled automatically. No separate app. No password. No points balance to track. The entire interaction happens in the booking engine, on mobile, in under 30 seconds.
What the Second Half Looks Like for Winners
The hotels that commit to a dual-strategy loyalty model in the next 90 days are setting themselves up for a dramatically stronger second half. The summer season is when they capture the most direct bookings. The fall shoulder season is when they reactivate those guests with personalized offers. And Q4 is when they compound the gains by building the first-party data asset that makes 2027 even more profitable.
The operators who are doing this right now are not just tweaking their loyalty program. They are making a strategic decision about how they acquire guests for the rest of the decade. They are building a guest asset that appreciates. They are reducing OTA dependency by making direct booking the obvious choice. And they are creating a loyalty experience that guests actually want, which means the program grows through word of mouth rather than through paid acquisition.
The Three Commitments You Need to Make in June
If you are reading this in early June, you still have time to change the trajectory of your second half. But the window is narrow. Here are the three commitments I would insist on if you are serious about winning the loyalty game in 2026.
- 1Commit to a dual strategy. Give your guests at least three genuinely different reward options at checkout: one financial, one experiential, one convenience. And keep points accumulation as an option for the guests who genuinely prefer it. The choice itself is the loyalty builder.
- 2Commit to operational ownership. Name a specific person who owns the loyalty program, not just the platform login. That person should review redemption data weekly, manage the reward catalog, and train the front desk to acknowledge and amplify the program at check-in.
- 3Commit to a 90-day sprint. Do not promise to optimize the program over the next year. Promise to optimize it over the next 90 days. Weekly reviews, weekly adjustments, weekly improvements. The hotels that build this habit in Q3 sustain it in Q4 and dominate in Q1.
The loyalty programs that are thriving in 2026 share one characteristic: they were built with the assumption that guests are not going to change their behavior to accommodate the hotel. The hotel must change its behavior to accommodate the guest. A dual strategy - instant rewards for most, points for the frequent traveler - is the simplest way to do exactly that.
The Bottom Line
The reckoning is not coming. It is here. The hotels that have modernized their loyalty programs are pulling away from the ones that have not. The gap is widening, not closing. And the second half of 2026 is when that gap will become visible on the P&L in a way that ownership cannot ignore.
If you are still running a points-only program, you are not behind. You are rapidly becoming irrelevant to the guests who matter most to your revenue. The fix is not complicated. It is a dual-strategy model that respects every guest preference, operational ownership, and a 90-day sprint of focused execution. That is all it takes. The tools exist. The data is clear. The only question is whether you will act before the season passes you by.
Summer is when hotels make their year. Make the decision this June that determines whether the summer bookings you capture are owned relationships or rented transactions. Your future self, and your balance sheet, will thank you.
About the Author
Ellis Connolly
CRO at Laasie
Ellis Connolly is the Chief Revenue Officer at Laasie, where he leads go-to-market strategy, revenue growth, and hotel partnerships. With over 15 years in hospitality technology, Ellis has helped hundreds of independent hotels and management companies shift from OTA dependency to profitable direct booking ecosystems.
