Loyalty Isn’t on Sale: Why Guests Stop Coming Back When You Discount
Discounts fill rooms, not hearts. Slash rates and you’ll get deal-chasers who vanish tomorrow. Add value, recognition, and story—and guests will rebook before they check out.
A “20% OFF” banner might fill rooms tonight. But tomorrow? Those guests are gone—already scrolling for the next deal. Discounts don’t build loyalty. They train travelers to treat you like a clearance rack.
The Discount Trap: Full Rooms, Empty Profits
Discounts look like the quick fix. But here’s what actually happens:
- You attract transactional guests. They’re here for the deal, not your story. They don’t engage with your unique offerings—and they don’t return.
- You cheapen your brand. Cornell’s Center for Hospitality Research shows discounting may boost occupancy in the short term, but it consistently drags down overall revenue per available room (RevPAR). STR confirms average daily rate (ADR) is slow to recover once guests are trained to expect deals.
- You crush your margins. A busy calendar means nothing if every booking bleeds profit.
Discounts can work as a panic button. But as a loyalty strategy? That playbook is broken.
Why Memories Outlast Markdown Codes
Price gets guests in the door. Experiences bring them back.
Expedia’s Traveler Value Index found that 84% of travelers consider personalization important when booking, while only 13% picked discounts as their top factor. Deloitte’s 2023 research shows 42% of frequent travelers are willing to pay more for personalized experiences. Airbnb’s 2023 report echoes it: demand now follows “unique stays” and authentic immersion—not lowest price.
Discounts fade at checkout. Recognition and delight linger long after the stay.
When Discounts and Loyalty Go Hand in Hand
Not all discounts are created equal—and not all should be avoided. When they’re targeted—reserved for loyalty members, segmented guest types, or used sparingly as rewards for real engagement—they can actually fuel loyalty.
Industry research shows:
- Loyalty program members now account for more than half of branded hotel stays.
- Repeat guests spend 22% more and stay 28% longer than non-members.
- Member-only rates or tiered discount systems boost retention and direct bookings without eroding overall brand value.
The smartest programs pair selective discounts with perks like personalization, recognition, and experiences—ensuring value doesn’t come from price alone.
The bottom line? Blanket discounts train guests to chase deals. Targeted discounts, aimed at guests most likely to become loyal advocates, can strengthen relationships and drive profit.
Raise Rates, Add Heart—Watch Guests Rebook
Here’s a composite scenario, based on what many operators report: a vacation rental raised its nightly rate slightly but started leaving a handwritten note and a gift from a local artisan. Guests lit up. Reviews praised the thoughtfulness. Repeat bookings climbed.
The loyalty bump didn’t come from shaving dollars off the rate. It came from making guests feel valued.
Festivals Beat Flash Sales Every Time
Puerto Rico’s Discover Puerto Rico campaign proves it. Instead of throwing discounts at off-season slumps, the island leaned into cultural storytelling—music festivals, food events, heritage tours. Hotels packaged stays around these experiences, and perception shifted: likelihood to visit rose 10 percentage points between 2018 and 2024.
Discounts can fill a gap. Stories can fill a calendar.
Three Loyalty Plays Better Than Any Coupon
Recognize and personalize. Returning guests don’t want balloons—they want to feel remembered. Their preferred room. A note recalling their last stay. A snack they actually like. Tiny gestures, massive loyalty.
Partner local. Work with artisans, chefs, or guides to create experiences no OTA can duplicate—mezcal tastings, farm-to-table dinners, guided hikes. AmEx Travel’s 2023 study confirmed travelers now prioritize “authentic, local immersion” over generic luxury or discounts.
Package with story. Stop selling “3 nights + breakfast.” Sell a Harvest Escape, a Wellness Reset, or a Culinary Weekend.Guests don’t share line items. They share stories.
Together, these moves shift your property from “just another stay” to “the stay they can’t stop talking about.”
AI as Your New Loyalty Concierge
Even the big brands are handing AI the loyalty clipboard—using it to anticipate guest needs, personalize experiences, and recognize returning travelers across platforms. This isn’t about robots replacing hospitality. It’s about tech making recognition scalable. The future of loyalty is remembering not just who guests are, but what matters to them—and AI makes that possible.
The Bottom Line: Discounts Fade. Loyalty Pays.
Discounts are a sugar high: quick buzz, faster crash. Loyalty comes from value, recognition, and experiences that stick. Build those, and guests will return, refer, and pay full price—without blinking.
Stop Discounting Your Way to Broke
This week’s Workflow is your playbook for offers so irresistible guests stop asking for markdowns—and start rebooking before they even check out.
Listen to our podcast on Spotify
Sources:
Why Discounting Still Doesn’t Work — Cornell CHR
https://ecommons.cornell.edu/server/api/core/bitstreams/05cc9de9-11e6-4f87-adb5-955b40de4234/content
The Traveler Value Index — Expedia Group Research
https://go2.advertising.expedia.com/traveler-value-index-report
Discover Puerto Rico’s Live Boricua Campaign
https://www.discoverpuertorico.com/industry/live-boricua-campaign
Hotel Loyalty Program Statistics & Trends for 2025 — OysterLink
https://oysterlink.com/spotlight/hotel-loyalty-program-statistics/
Hotel Loyalty Programs Continue to Prove Their Value — CBRE
https://www.cbre.com/insights/articles/hotel-loyalty-programs-continue-to-prove-their-value-key-findings-from-675-million-members
Global Travel Trends Report 2023 — American Express Travel
https://www.americanexpress.com/en-us/travel/discover/travel-trends/
Hotel room discounting doesn't increase hotel revenues — Cornell
https://news.cornell.edu/stories/2003/04/hotel-room-discounting-doesnt-increase-revenues
Discover Puerto Rico marks 'record-breaking' '24 — News is my Business
https://newsismybusiness.com/discover-puerto-rico-marks-record-breaking-24-looks-to-2025-growth/
Latest posts
Vrbo has rolled out a strict new host cancellation policy that could cost vacation rental owners thousands. This post breaks down the rules, penalties, and communication requirements, then offers the Vrbo Survival Stack—a ladder of strategies from Basic to Bulletproof—to help hosts protect revenue, avoid fines, and thrive in 2025.
Marketing shouldn’t feel like juggling flaming torches. Copy this one AI prompt, get a week’s plan in minutes, and save your late nights for margaritas instead of Canva.
Airbnb’s Reserve Now, Pay Later drives bookings for them but creates cancellations and lost cash flow for you. Smart hosts use stricter rules, upfront payments, and AI tools to turn RNPL chaos into profit.
