U.S. Hotel Occupancy Rates Still Trail Pre-Pandemic Highs
In 2019, U.S. hotel occupancy averaged 66.9%; today, post-pandemic, the rate remains lower at 63.9%, with no full recovery in sight.
While some markets, like New York City, are bouncing back, others are struggling. In Minneapolis, for example, occupancy rates sit at just 50%, while St. Louis isn’t far ahead at 52.4%, according to data published by CoStar.
What’s holding occupancy back, and how can hotels turn things around? In this article, we’ll explore how engaging and empowering your hotels’ frontline employees to champion your loyalty program can be the key to recovery.
Why Are Occupancy Rates Lagging? Key Causes Unpacked
There are multiple reasons for low occupancy rates, according to Skift.
Increased Supply: Since 2019, the U.S. has added 618 net hotels, creating more rooms to fill and intensifying competition.
Weaker Demand: Nationwide hotel demand remains slightly weaker than pre-pandemic levels, contributing to lower occupancy rates.
Impact of Hybrid Work: With office attendance averaging just 2.78 days per week according to the Flex Index Report, business travel has declined, leading to fewer corporate stays.
Decline in International Travel: Reduced international travel—continues to impact the industry.
The Solution: Leveraging Frontline Teams to Champion Loyalty Programs
Customer rewards and loyalty programs are among the most effective tools for increasing travel and hospitality revenue. By offering rewards, loyalty programs motivate customers to spend more while driving repeat bookings, cultivating higher brand loyalty, and increasing customer lifetime value. This clearly translates into ROI and higher revenue.
The data shows that, among frequent travelers, reward program members are 2X as likely to book hotels where they are members. Additionally, 3 in 5 loyalty program members say that they’ve considered their points and rewards when deciding where and when to travel.
The key challenge, however, is getting frontline employees to understand, promote, and champion these programs.
Frontline employees are the face of your brand; it’s therefore essential to ensure that they are trained and motivated to proactively promote the benefits of the programs and recognize those guests who are members. But how?
At Centrical, we partner with some of the world’s largest hospitality brands, airlines, and mobility companies to enable them to train and incentivize their frontline teams around key loyalty metrics.
By creating an employee loyalty program that fuels customer loyalty, travel and hospitality companies can turn their teams into powerful advocates. With Centrical’s platform, they can engage employees through gamification, learning, and real-time performance insights—empowering them to understand and promote guest loyalty programs effectively.
Success Story: How IHG Hotels & Resorts Increased Loyalty with Centrical
One of the world’s leading hotel companies, IHG Hotels & Resorts, had major success using Centrical to engage, educate, and motivate frontline staff on their IHG One Rewards program, a cornerstone of their guest loyalty strategy.
IHG sought a way to engage frontline team members and ensure their loyalty program was delivered consistently and effectively across properties. To achieve this, they turned to Centrical to create IHG Climb, a gamified platform designed to drive loyalty enrollment and recognition. The platform incentivized employees to complete training, track their progress, and compete with other IHG properties.
With targeted KPIs, interactive training, and leaderboards, IHG Climb put loyalty metrics front and center. Hotel staff embraced the platform and its features—from kudos to coaching and leaderboards — with some properties even introducing unique traditions, like awarding a “Climb Crown” to top performers. These initiatives fostered a sense of community and engagement across different IHG properties.
The impact was clear: Hotels that actively engaged with IHG Climb saw accelerated performance in key loyalty metrics and higher rebooking rates amounting to millions in additional revenue.
The Path Forward: Engaging Employees to Boost Hotel Revenue
As hotels navigate the challenge of lower occupancy rates, employee engagement stands out as an effective solution. When frontline staff members are motivated and equipped to promote loyalty programs, they drive guest retention, increase repeat bookings, and ultimately boost revenue.
Are you ready to elevate your loyalty strategy? Let’s talk about how Centrical can help your brand turn employees into loyalty champions.
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