Hotel Groups Bet on Loyalty Programs to Fend Off AI Agents and Online Travel Platforms

Hotel Groups Intensify Focus on Direct Bookings

Major hotel groups are ramping up efforts to encourage direct bookings as they face mounting pressure from both online travel agents and emerging AI agents. Marriott, the world's largest hotel company, reported that its Bonvoy loyalty program reached nearly 260 million members by the end of September, marking an 18 percent increase from the previous year 1

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. Rivals including Hilton, Hyatt, and Wyndham Hotels & Resorts have similarly enhanced their programs with technology upgrades and more attractive perks to capture a larger share of direct customer relationships 1

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The strategic shift reflects a dual challenge facing the travel industry. Hotel operators have long struggled with commission fees charged by online travel agents like Expedia and Booking.com, which typically take between 15 and 25 percent of each booking 1

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. Now, the emergence of autonomous AI agents capable of arranging travel threatens to further erode brand loyalty by making customers less conscious of brand recognition 1

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Generative AI Transforms Travel Planning Landscape

"Generative AI is shifting travel planning from traditional search into more conversational and agent-led environments. So that makes building relationships [with customers] a bit more strategic and important," Chema Basterrechea, chief operations officer at Radisson Hotel Group, explained 1

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. This shift toward agent-led environments has prompted hotel chains to prioritize building direct customer relationships that can withstand the disruption.

The ability to collect valuable guest data through direct bookings enables hotels to deliver personalized experiences that encourage repeat business. Basterrechea noted that boosting direct bookings could help Radisson capture more information and offer "a much more personalised experience" 1

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. This data advantage becomes particularly critical as AI platforms from Google, OpenAI, and others roll out agentic tools that can book hotel rooms using text or voice interfaces 2

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Strategic Response to Reduce Dependence on OTAs

Marriott's chief financial officer Leeny Oberg suggested at a recent conference that bookings made through AI channels "could potentially be cheaper than the OTAs" 1

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. This potential cost advantage positions AI agents as both a threat and an opportunity for hotel operators seeking to reduce commission fees paid to third-party booking platforms.

Bernstein analyst Richard Clarke emphasized the financial imperative behind the push for direct bookings: "You don't want to rely on Booking and Expedia: they're expensive channels and they're extremely hard to defend your position on" 1

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. While hotels have historically worked with intermediaries to access incremental business, they now hope that stronger ties with customers will reduce their reliance on these costly channels 1

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Enhanced Perks and Partnerships Drive Brand Loyalty

Hilton has made it easier for customers to reach elite loyalty status and forged partnerships, including with MSC Cruises' luxury division Explora Journeys, that enable members to spend points outside its portfolio 1

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. The chain has also introduced unique experiences, such as access to a £650 football-themed suite at its hotel at England's national team training ground, complete with boots, memorabilia, and training sessions with qualified coaches 1

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Geoff Ballotti, chief executive of Wyndham, views tools like ChatGPT and Gemini as "a unique opportunity for us to continue to reduce our dependency on OTAs" 1

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. The company is already leveraging in-house AI tools to drive more direct bookings 2

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Competition Heats Up Across the Travel Industry

Glenn Fogel, chief executive of Booking Holdings, which owns Priceline and Booking.com, acknowledged that OTAs are "absolutely" competing with hotels' in-house loyalty programs. "You're just one click away from going to another way to do your booking, so you've got to always be providing better service because people like [Marriott] Bonvoy and people like Hilton Honors are very powerful," he said 1

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Expedia's chief commercial officer Greg Schulze maintained there was "space for all of us" in the $3 trillion travel industry, arguing that his company's technology platforms add "complementary value," especially for smaller operators not part of major chains 1

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. Meanwhile, PYMNTS Intelligence research shows nearly 25 percent of consumers would be comfortable letting an AI agent plot their travel, signaling a significant shift in booking behavior 3

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. As travel commerce shifts from search-led workflows toward agent-led execution, hotel groups face the challenge of maintaining relevance in an increasingly automated booking landscape where brand recognition may matter less than algorithmic recommendations.