Travel’s Most Celebrated Number Is Its Most Meaningless
Photo Credit: Travel brands often tout how much revenue their loyalty programs generate. Skift
Skift Take
The travel industry celebrates loyalty member counts the way it celebrates sustainability commitments: loudly, frequently, and with very little evidence the numbers have changed anything.
Connecting the Dots
Rafat Ali on what’s really shaping travel — and why it matters.Every quarter, like clockwork, management teams host their earnings calls and talk up their loyalty numbers. Most recently, we heard that Marriott added 75 million Bonvoy members in two years, bringing its total to 271 million. Hilton crossed 243 million. Booking Holdings grew its direct channel from the low-50s to the mid-60s as a share of room nights.
Executives beam, analysts nod along — and no one asks the one question that actually matters: Is any of this making it cheaper to acquire the next customer?
To test that, I pulled three years of SEC filings from 13 companies in four sectors — OTAs, hotels, airlines, and cruises.
The premise of every loyalty program is simple: Companies spend money to acquire a customer, offer points or status to bring them back, and over time, each subsequent booking should cost less to acquire than the first. Marketing spend as a share of revenue should go down as loyalty
