The Real Cost of Waiting: Why Every Month Without a Loyalty Program Costs You Guests

When hotel owners think about loyalty programs, most of them think about the cost of starting one. What does the platform cost? How much do I need to invest in rewards? What are the setup fees? These are reasonable questions.

But from a financial perspective, they are the wrong questions to ask first. The question that matters more — the one that should drive the decision — is this: what is the cost of not having a loyalty program? What is every month of inaction actually costing your hotel?

When you do the math, the answer is uncomfortable. The cost of waiting is not zero. It is not even small. It is a compounding loss that grows every single month — and once those guest relationships are gone, you cannot get them back.

The Monthly Bleed You Cannot See

Let us start with the basics. Take an 80-room hotel running at 72 percent occupancy. That is roughly 58 rooms occupied per night, or about 1,740 room-nights per month. With an average stay of 2.3 nights, that is approximately 756 guest stays per month.

Of those 756 guests, suppose 45 percent booked through an OTA — about 340 guests. These are people who stayed at your hotel, probably enjoyed it, and are now leaving without any connection to you. No email address. No points balance. No reason to book direct next time.

Each of those 340 guests represents a lost opportunity to build a direct relationship. Not all of them would have enrolled in a loyalty program — but industry data suggests that with a simple front desk enrollment process, you can reasonably expect 40 to 60 percent of guests to sign up when asked. That is 136 to 204 potential loyalty members walking out the door every single month.

These are not hypothetical people. They are real guests who stayed in your rooms, ate at your restaurant, and told their families they had a nice time. They are exactly the kind of people who would come back — if you gave them a reason to.

Putting a Dollar Amount on Inaction

Let us attach real numbers. Your average daily rate is $175, and the average stay is 2.3 nights. That is about $400 per stay. If a loyalty member books direct even once over the next two years — and many will book more than once — that is $400 in revenue with zero OTA commission.

At a 20 percent commission rate, each direct rebooking saves you $80 in commission fees. If you enroll 170 guests per month and 30 percent of them rebook direct within two years, that is 51 direct rebookings per monthly cohort. At $80 in commission savings per booking, that is $4,080 in savings from just one month of enrollments.

Flip that around: every month you do not have a loyalty program, you are losing approximately $4,080 in future commission savings. Not immediately — but inevitably, as those guests book through OTAs over the next two years instead of booking direct with you.

And that is a conservative estimate. It does not account for guests who rebook multiple times, or guests who refer friends, or the value of being able to run targeted email promotions during your slow season.

The Compound Effect Over Three Years

The cost of waiting is not just the loss from this month. It is the accumulated loss from every month you did not have a program in place.

Let us map this out for the 80-room hotel we have been discussing:

Read that last row carefully. An 80-room hotel that waits three years to start a loyalty program will have missed the opportunity to enroll over 6,000 guests and could lose nearly $150,000 in commission savings. That money does not disappear — it goes to Booking.com and Expedia as commission payments on guests who should have been booking direct.

And this is just commission savings. It does not include the revenue from shoulder-season promotions you could have sent to your member base, or the higher lifetime value of guests who feel genuinely connected to your brand.

The Five-Year View: Where It Gets Serious

Extend the analysis to five years, and the numbers become even more striking. By year five, you would have missed over 10,000 potential enrollments. Assuming the same 30 percent rebooking rate and accounting for some guests who rebook multiple times, the cumulative lost commission savings approach $300,000.

But the real cost is not just the commission savings you missed. It is the guest database you did not build. After five years with a loyalty program, you could have a database of 10,000 or more members — people you can email directly, people with points balances that pull them back to your hotel, people who think of your property first when they plan their next trip.

Without that database, you are starting from zero. Every season, you are back to depending on OTAs for the bulk of your bookings. Every year, you are paying the same commissions. Nothing compounds. Nothing grows.

“I Will Start Next Year” Is the Most Expensive Decision You Can Make

The most common response from hotel owners who understand the math is: “This makes sense, but we are in the middle of season. We will start in the fall.” Or: “Let us get through the year and revisit this in January.”

This is the most expensive decision you can make — because delay has a real, calculable cost. If you wait six months, that is 1,020 potential members you did not enroll. If you wait a year, it is 2,040. These are not abstract numbers. They are your guests, staying in your rooms, leaving without any connection to your brand.

And there is a compounding delay effect. The members you enroll today start generating direct bookings six to twelve months from now. If you start in January, your first direct rebookings from the program happen next winter. If you start now, those rebookings start happening this summer — your busiest, highest-rate season.

The best time to start a loyalty program was five years ago. The second best time is now. Every month of delay pushes the payoff further into the future and increases the total cost of inaction.

A CPA's Perspective on the Decision

As someone with a CPA background, I look at this decision the same way I would look at any capital allocation question: what is the return on investment, and what is the opportunity cost of not investing?

The return on a loyalty program is clear and measurable. You can track enrollments, direct rebookings, commission savings, and member lifetime value. The numbers we have walked through here are conservative — real-world results often exceed these projections because they do not account for referrals, increased average stay length, or the revenue from targeted promotions.

The opportunity cost is equally clear. Every month without a program is a month of lost enrollments that you can never recover. Those guests are gone. They will book through OTAs next time. The commission check is already written.

From an accounting standpoint, a loyalty program is not an expense — it is an investment in a depreciating-asset-proof database that generates returns for years. The deferred revenue from loyalty points is a liability on your books, yes — but the direct bookings those points drive are worth many times more than the liability they create.

What Starting Today Actually Looks Like

One of the reasons hotel owners delay is that they imagine a loyalty program is a massive undertaking. It does not have to be. With a white-label platform built for independent hotels, the setup is measured in days, not months.

You share your branding and property details. The platform configures your loyalty app with your logo, your colors, your tiers, and your rewards. Your front desk starts enrolling guests. That is it. No custom development. No six-month implementation timeline. No committee meetings.

The sooner you start, the sooner every guest who checks in becomes a potential member — and every member becomes a future direct booking. The math is simple, the tools exist, and the only real cost is the one you pay by waiting.

The Clock Is Running

Here is the uncomfortable truth: while you are reading this, guests are checking out of your hotel with no reason to come back direct. Some of them will rebook through an OTA next year. Some will try a competitor. A few will forget about your property entirely. Every one of them could have been a loyalty member — a direct booking waiting to happen.

The commission problem does not get better with time. OTA rates are not going down. Google is not going to stop favoring OTA listings. The only thing that changes the equation is building direct guest relationships — and the only way to do that at any kind of volume is with a loyalty program.

The hotels that start today will look back in three years and see a database of thousands of loyal members, a dramatically lower OTA percentage, and a bottom line that reflects years of compound savings. The hotels that keep waiting will look back and see three more years of commission checks and guest relationships they never built.

The math is not complicated. The tools are available. The only question is whether you start now or keep paying the cost of waiting.