Rethinking Loyalty: The State of Hotels in Europe

Key Takeaways:

• Usage of hotel apps has continued to grow in YTD 2024, but growth is slowing. In the UK, YoY MAU growth declined from 39% in the first three quarters of 2023 to 24% this year, although IHG bucked the trend

  • From 2019 to YTD 2024, the combined MAU market share of Marriott, IHG, and Hilton dropped by more than 10ppts, as smaller chains like Meliá and Barceló gained new users

• Marriott recorded a 55% YoY increase in advertising spend between January and September 2024. However, its MAU growth was below average at 8%, compared to a median growth of 12% across leading hotel apps in the cohort

• Several luxury hotel brands have increased their advertising in the UK, with luxury ads making up 13% of total ad spend in 3Q24, up 3ppts YoY. Spending on loyalty program ads has also risen by 7ppts YoY as growth of leisure revenue per available room (RevPAR) is softening across the industry

  • In the UK, luxury hotel brand Hyatt Regency saw one of the largest YoY increases in ad spend, up ~500% YoY in 3Q24, while Marriott drove loyalty ad spend growth, up over 20ppts YoY

• In Germany, Accor is advertising its Ibis budget chain on TikTok and Snapchat to target younger audiences. The DMA's impact on Google search results is pressuring hotels to spend more on advertising in Germany, with combined ad spend for the top hotel groups — incl. Hilton and NH Hotel Group — up over 90% YoY in 3Q24

• Hilton's higher app churn (49%) versus Marriott (44%) in YTD 2024 may be driven by a more price-sensitive user base, which is more likely to use budget eCommerce apps, low-cost airlines and competitor Booking.com

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