Hotel Loyalty Programs: Marriott, IHG & Hyatt's Real Goal

Thailand and Taiwan become latest markets in IHG’s regional digital strategy

IHG’s latest LINE app expansion sounds like another convenient benefit for travelers. Look closer, and it illustrates a much bigger transformation of the hotel business — one that rewards guests while steadily shifting bookings away from OTAs, wholesalers and traditional travel intermediaries.

When IHG Hotels & Resorts announced an expansion of its LINE MINI App into Thailand and Taiwan, the announcement had everything expected from a modern hotel-company press release.

Convenience. Mobile-first technology. Rewards. Exclusive offers. Gamification. Personalized experiences. And, of course, artificial intelligence. There is nothing inherently wrong with any of this.

For an IHG One Rewards member, having hotel reservations, points, status and offers accessible inside an app travelers already use can be genuinely convenient. But there is another story behind the shiny new technology.

Hotel loyalty programs such as IHG One Rewards, Marriott Bonvoy and World of Hyatt aren’t merely programs designed to say “thank you” to frequent guests. They have become sophisticated distribution systems.

Their increasingly important job is to create a direct relationship between the traveler and the hotel brand — and make it less attractive for that traveler to book somewhere else.

That “somewhere else” includes Expedia, Booking.com and other online travel agencies. It can include wholesalers and tour operators. And depending on how a reservation is structured, it can also affect traditional travel intermediaries.

The hotel loyalty war is therefore also a distribution war.

And the independent hotel, without millions of loyalty members, sophisticated apps, global advertising budgets and enormous databases, is fighting that war from a very different position.

Imagine a traveler who has spent years building Marriott Bonvoy elite status. He finds a Marriott hotel on an online booking site for exactly the same price displayed by Marriott.

He books it. He arrives at the Marriott hotel, presents his Bonvoy membership number and reasonably thinks: I am a loyal Marriott customer staying in a Marriott hotel. Where are my points and benefits? The answer can be an unpleasant surprise.

Marriott’s rules define reservations made through online travel channels, tour operators and other third-party channels as non-qualifying rates. Marriott specifically lists companies including Expedia and Booking.com. Such stays generally don’t qualify for points, elite-night credits, or membership-tier benefits.

World of Hyatt has similar restrictions. Its terms specifically identify rooms booked through online third parties such as Expedia, Hotels.com, Booking.com, Priceline and Tripadvisor among non-eligible rates. Hyatt also states that hotel benefits generally aren’t available to an elite member staying on a non-eligible rate.

IHG is equally explicit. Its rules say qualifying stays can be booked through IHG’s websites, app, customer-care channels, directly at hotels and certain authorized travel agents. But ordinary online travel-agency and third-party bookings — IHG gives Expedia as one example — are generally non-qualifying, as are tour-operator and wholesaler rates.

There are exceptions, particularly for specifically authorized travel-advisor channels and negotiated arrangements. So this is not simply a declaration of war on every travel agent. But the direction of travel is unmistakable.

Book through the channels the hotel company wants you to use, and you are rewarded. Book through many competing channels, and much of that reward disappears.

That is not an accidental feature of loyalty. It is one of loyalty’s most valuable commercial functions.

Forget the marketing language for a moment and look at what IHG tells its shareholders.

IHG reported that in 2025, 83% of room revenue was booked through IHG-managed channels and sources. It said IHG One Rewards members accounted for 66% of rooms booked globally.

Even more revealing: according to IHG, loyalty members typically spend about 20% more at its hotels than non-members and are 10 times more likely to book direct.

IHG also says its mobile app recorded nine million downloads during 2025. Suddenly the LINE MINI App announcement looks different.

It is certainly a convenience product. But it is also customer acquisition, distribution and loyalty infrastructure.

IHG doesn’t even hide that strategy. Its annual report describes digital partnerships as a way to encourage guests to book through direct channels and connect them with IHG One Rewards.

That is smart business. The question is whether travelers fully understand the business they are participating in.

Traditionally, travelers went to a travel agent. Later, millions migrated to Expedia, Booking.com, and other OTAs because those platforms made comparison shopping incredibly easy.

Now hotel groups want that customer back. Their apps increasingly combine search, reservations, payment, loyalty status, upgrades, special rates, destination information, messaging and personalized offers.

Add AI-powered travel planning and conversational search, and the hotel app starts resembling a travel platform itself.

Academic research backs up the commercial logic. Research into hotel loyalty programs has specifically examined their ability to generate higher-margin direct business and reduce dependence on OTAs. More recent research into direct-booking strategies likewise describes loyalty rewards, mobile convenience, and member benefits as mechanisms encouraging customers to book directly.

This isn’t necessarily sinister. It is extremely effective vertical integration.

But every transaction redirected toward a proprietary hotel ecosystem is a transaction that doesn’t have to go through somebody else.

Before anyone starts feeling sorry for giant OTAs, consider the other side.

Hotels can pay substantial commissions for OTA business. A Cloudbeds hotel-distribution guide puts average major-OTA commissions in the 15% to 30%+ range, although actual agreements vary considerably by hotel, market, platform and promotional participation.

European Commission research found independent hotels reporting average basic OTA commissions within a 10%-20% range and noted that chains generally reported lower basic rates than independent hotels.

So an independent hotel can find itself squeezed from both directions. It may need the OTA because that’s where millions of consumers shop. But obtaining that customer can carry a substantial distribution cost.

The hotel chain has another weapon: its enormous loyalty database. The independent hotel generally doesn’t.

This is where the discussion becomes uncomfortable.

The traditional travel advisor may earn around a conventional 10% commission on qualifying hotel business, though actual agreements vary enormously. Marriott’s own franchise disclosure materials, for example, reference a Preferred Travel Agency program cost of 10% of qualifying room revenue.

A good travel advisor does considerably more than click “book.”

They advise the client, compare alternatives, understand destinations, coordinate flights and transfers, organize complicated itineraries, solve problems, and sometimes answer the phone when a traveler is stranded thousands of miles from home. Yet the industry’s digital direction increasingly says to the consumer:

Reporting originally appeared via eTurboNews. Read the full source for additional context.