The Battle for the Consumer

How travel and hospitality brands can reclaim direct consumer relationships.

April, 2026

The Shape of the Problem

There is a version of the current situation in travel that hotel companies tell themselves, and a version closer to the truth. The reassuring version: we have our loyalty programme, our website, our CRM. The uncomfortable version: most guests are first found by a platform we do not control, evaluated on a platform we do not control, and often booked on a platform that takes fifteen to twenty-five per cent of the revenue before we see them. We then send a pre-arrival email and call that a relationship.

The structural conditions of this battle are changing in ways that make the current moment unusually consequential. Platforms such as Google, Meta, Booking Holdings and Expedia Group are each spending at a scale all hotel groups together cannot match, building tools that make the intermediated experience more convenient and more trusted than many brands' own direct channels. The question is not whether this matters. It is whether hospitality and travel brands understand specifically where they are losing ground, why, and what a realistic path to recovery looks like.

This analysis examines the structural forces at work, the gaps in how most brands currently approach consumer relationships, and the sequenced investments that can shift the balance. It builds on two earlier PACE analyses: Strategic Imperatives and Winning Ways for 2026¹ and Who Owns the Guest in the Age of AI?², which identified customer ownership, marketing precision and technology architecture as defining commercial priorities. This article takes those arguments further, examining why the sequencing of investment matters as much as the investment itself.

Three Places Where the Relationship Is Being Lost

Understanding where control is lost is a precondition for reclaiming it. Consumer relationships in travel are intermediated at three distinct stages, each with its own dynamics and its own set of well-capitalised platforms.

Discovery and early confidence-building. Before a traveller has decided where to stay, they are being shaped by search engines, social platforms, short-form video and AI tools that aggregate, summarise and recommend. Google, Meta and Microsoft intercept demand at its earliest and most pliable stage. They do not merely present options; they determine which brands feel familiar and trustworthy before a consumer has visited any brand’s own channel. A guest whose research is shaped entirely by platform-curated content arrives at the point of booking with a relationship that belongs to the platform, not the hotel.

Loyalty and post-stay memory. Across five leading hotel brand families, loyalty membership surged 14.5 per cent year-on-year in 2024 to more than 675 million members, outpacing room supply growth of 6.7 per cent, according to CBRE⁶. Loyalty members now account for 52.8 per cent of occupied rooms. By year-end 2025, those numbers had grown further still: Marriott Bonvoy added approximately 43 million members across the year, closing 2025 with nearly 271 million; Hilton Honors ended the year approaching a quarter of a billion, at more than 243 million⁷. These numbers reflect genuine investment. But they also reveal an uncomfortable reality: as programmes scale, the average member is less frequent and less engaged. CBRE found that room nights per member declined four per cent year-on-year in 2024 even as total membership grew. That is not a deepening relationship. It is a widening but increasingly shallow one.

Meanwhile, intermediaries are building their own loyalty ecosystems for the same guests. Expedia Group launched One Key, combining Expedia, Hotels.com and Vrbo, with more than 168 million members across legacy programmes at launch⁸. Booking Holdings continues to scale its Genius programme across 850,000 participating properties⁹. These are systematic attempts to position OTAs as the relationship layer between hotel brands and their guests.

The broader context of consumer trust compounds the challenge. The 2025 Edelman Trust Barometer found that people are increasingly sceptical of large global brands, placing growing weight on the opinions of their immediate social circle³. The scale of a loyalty programme is not a guarantee of genuine loyalty. Trust is earned through relevance, recognition and consistency, none of which can be delivered by a database that classifies guests primarily by how recently and how often they paid for a room.

Why Most Brands Are Not Currently Equipped to Win This

The honest diagnosis is uncomfortable. Most hotel companies have invested substantially in operational and revenue management systems. Marketing, by contrast, remains immature, relying on disconnected point solutions: an email platform, a loyalty tool, an advertising dashboard, perhaps a CRM that has been partially implemented and is poorly maintained. These systems do not produce a unified view of who a consumer is, what they want, or when they are likely to buy.

This is an organisational problem with a technology dimension. As Strategic Imperatives and Winning Ways for 2026 observed, the highest returns come from restructuring how organisations work, moving from siloed departmental functions towards hybrid teams aligned around higher-order commercial goals. In most hotel companies, marketing, revenue management and distribution operate with separate systems, separate metrics and separate priorities. Even when individual tools are good, they do not produce compounding returns because they are not orchestrated around a shared understanding of what the brand is trying to achieve and for whom.

The data gap is where this plays out most concretely. Most hotel companies categorise guests by frequency, recency and historic spend. This is a transactional lens, and it is the wrong one. It tells you what guests have done, but very little about what they are likely to do next, and nothing about who among the millions of consumers who have never stayed might become a guest if reached at the right moment. The guests who have already stayed with some frequency are a finite and already-contested pool. Consumers who travel regularly but have not developed affinity with any particular brand, and consumers whose behaviour signals a near-term propensity to stay, represent a much larger and largely invisible opportunity.

What is required is a fundamentally different question being asked of the data: not ‘who has stayed most recently?’ but ‘who has the strongest propensity to stay in a property like ours, in a market we need to fill, in a booking window that matters commercially?’ Answering it requires understanding browsing behaviour, search intent, pricing sensitivity, and where guests exit the booking flow. Very few hotel companies are set up to collect, integrate and act on data of this kind.

“The brands that will win are those that understand not just who stayed last month, but who has a propensity to stay next month. That requires a fundamentally different question being asked of the data — and a fundamentally different infrastructure to answer it.”

The Consumer Relationship Is Not One Thing

Hotel brands often struggle to own consumer relationships because they treat all guests as a single category, differentiated only by historic value. In reality, the mechanics of building a direct relationship differ significantly by travel purpose, and an approach that works for one segment can actively fail for another.

Corporate and managed travel
This is frequently the most traceable opportunity and the most underestimated. Corporate guests travel regularly, operate within negotiated programmes, and are consistently sensitive to friction. The fastest way to deepen a direct relationship here is operational rather than promotional: profile-based booking that removes repetitive form-filling, fast rebooking for disrupted itineraries, invoicing that meets corporate finance requirements, digital key access. These may seem like table stakes. In managed travel, they are the relationship. A brand that makes the corporate experience materially easier than the alternative earns loyalty through utility. The growth of hybrid working and bleisure patterns makes this more important still: stays are getting longer and more varied in purpose, and the brand that accommodates that flexibility directly has a meaningful advantage.

Inspiration-led leisure
Inspiration-led guests are not starting from a commitment to a brand; they are starting from a mood, a milestone, or a vague desire to go somewhere. The brand that appears at the right moment with the right content earns the relationship while it is still genuinely up for grabs. The mistake most brands make is treating inspiration-led content as the top of a campaign funnel, optimised for reach and recall. It is a conversation with a consumer who has many options, limited trust in marketing, and a strong preference for peer validation over brand assertion. The brands that earn relationships here invest in structured, credible, intent-tagged content that platforms can surface at the relevant moment, exactly the capability that Who Owns the Guest in the Age of AI? identified as the central content management challenge of the current era. A polished brand campaign will not do it. Authentic reviews, transparent pricing and a booking experience that does not feel like an obstacle will.

Experience-led travellers
Guests whose primary motivation is the distinctiveness of what they will do and feel demand recognition above all else. For this segment, the direct relationship is built through demonstrated memory: knowing what a guest valued on previous visits and proactively making it available without requiring them to repeat themselves. This sounds obvious. Most brands cannot do it, because the data that would enable it is fragmented across operational systems not designed to share a coherent picture of a single guest. The opportunity is significant precisely because the bar for genuine recognition is so low that most hotels fail to clear it.

Groups and families
Group travel planning is inherently difficult, magnified by the need to coordinate across people with different preferences and willingness to pay. The brand that makes this genuinely easier through shared shortlists, collaborative decision tools, multi-room booking flows and post-booking coordination, earns a relationship with the entire group, not just the person who made the booking. The cost of friction-reducing planning tools is modest. The cost of losing this business to an OTA that makes group comparison easier is not.

Across all four segment types there is a common requirement. Brands must distinguish between the consumer who has already demonstrated affinity and the one who has the propensity to develop it. The former is reachable through CRM and loyalty. The latter requires modelling the profile and behaviour of existing loyal guests and targeting consumers who share those characteristics. This is standard practice for sophisticated digital retailers. It is not yet standard practice for most hotel companies.

The Technology Gap Is Real, but It Is Not the Main Barrier

Hotel companies often frame the consumer relationship problem as a technology problem, then use the complexity of the technology landscape as a reason not to act. This is the wrong framing.

The required technology exists and is accessible. The components are well understood: an identity and consent layer to ensure all marketing activation is permissioned under applicable privacy regulation; a CRM and marketing automation platform to orchestrate lifecycle communications from pre-booking through post-stay reactivation; a Customer Data Platform to unify behavioural and transactional data for segmentation and real-time decision-making; Gartner defines this as software that unifies customer data to support customer experience use cases, segmentation and activation across systems¹⁰; a personalisation layer that adapts the direct channel to who the guest is and what they want; and a mobile-first service layer covering digital key, in-stay messaging and frictionless checkout, where the brand relationship is either deepened or squandered during the stay itself.

The problem is the architecture in which these components sit, and the operating model surrounding them. Most hotel technology environments are a proliferation of operational systems: property management, revenue management, point of sale, restaurant and spa, each maintaining its own version of inventory, pricing and customer data. They require custom interfaces to communicate, and those interfaces break, drift and multiply. The result is a collection of silos that share data imperfectly, making it structurally impossible to present a consistent picture of a guest across every channel.

The architectural shift required is significant but well-defined: abstract channel and guest interactions away from individual operational systems, create single authoritative sources of truth for key commercial data, and stream behavioural events in real time to build a continuously updated understanding of each consumer. This is the foundational infrastructure without which all other relationship-building is compromised. A personalisation tool built on fragmented data will personalise badly. A loyalty programme that cannot surface a consistent guest view across channels will frustrate rather than reward.

But even the best architecture delivers nothing if the operating model does not change around it. This is where hotel transformation most commonly fails, as the following section covers in detail.

“Technology does not create consumer relationships. But the absence of the right architecture, combined with an operating model that has not changed to exploit it, makes genuine relationship ownership structurally impossible at scale.”

The Risks That Most Brands Underestimate

Privacy and consent failure. GDPR and equivalent frameworks are not a compliance overhead. They are the commercial foundation on which all direct relationship activity is built. A brand sending marketing to guests who have not provided affirmative consent is not just taking a legal risk; it is destroying the trust that makes direct relationships commercially valuable. The practical requirements are well understood: a genuine preference centre, consent flows that meet current standards, cookie governance that is actually implemented. Brands that treat this as a tick-box exercise typically discover that their permissioned audience is far smaller than they believed, and that rebuilding it takes considerably longer than growing it carefully from the outset.

The trap of competing on price. The instinct when building a direct proposition is to offer a discount: a member rate, a points bonus, a best-rate guarantee. These have a role, but when price is the primary reason to book direct, the brand has implicitly conceded that the OTA experience is comparable across every other dimension, and entered a discounting race with platforms that have more margin to absorb it. The durable direct value proposition is not cheaper — it is better. Genuine flexibility on cancellation and room selection, digital convenience the OTA cannot replicate, recognition that rewards a direct relationship. These are harder to build than a discount code, but they create a reason to book direct that compounds over time rather than eroding average daily rate.

The tool-without-workflow problem. This is perhaps the most pervasive failure mode. A company invests in a marketing automation platform or CDP, announces the capability, and finds twelve months later it is being used to do roughly what the previous system did, only marginally faster. The technology has not changed the questions being asked of the data, the decisions being made, or the experience being delivered. The mitigation is to start deliberately small: identify three to five high-value automated journeys: cart abandonment, pre-arrival upsell, post-stay reactivation, corporate rebooking and win-back. Build genuine measurement around each, and prove incrementality before expanding. The brands that build sophisticated consumer relationship capability nearly always started here, not with a grand architecture programme.

Why Sequencing Matters More Than Scale of Investment

The temptation is to solve everything simultaneously: CDP, marketing automation, loyalty refresh, AI personalisation and direct channel redesign in a single transformation programme. This almost never works, not for lack of budget or ambition, but because each capability depends on the one before it. Attempting to build the upper floors before the foundations are sound produces expensive, fragile structures that do not deliver intended returns.

AI-powered personalisation built on fragmented data will personalise badly and lose credibility quickly. A loyalty refresh without a functional identity and consent layer will reach the wrong guests non-compliantly. A direct channel investment unsupported by a genuine value proposition generates clicks but not bookings. A marketing automation platform connected to systems holding conflicting versions of customer data will automate inaccuracy at scale.

The sequence that generates returns at each stage while building toward compounding advantage begins with foundations. Before personalisation, unify identity and consent. Before automation, establish the true cost of the channel mix and where incremental margin from direct bookings is available. Before AI decisioning, ensure the data infrastructure feeding it is reliable and comprehensive. Before a loyalty refresh, understand what the current programme actually delivers in terms of incremental room nights and where guests are disengaging.

This is not a cautious argument. It is a commercial one. Brands that rush to visible innovation such as the chatbot, the AI recommendation engine or the gamified loyalty feature, before the underlying infrastructure is sound, will see modest returns at best, and often negative ones: they add complexity without the data quality to support it. Brands that invest in foundations, then intelligence, then customer-facing innovation in that order build advantages that are genuinely difficult for competitors or platforms to replicate, because they are grounded in proprietary data and organisational capability rather than licensed technology any competitor can acquire.

“The brands that will outperform are not those that invest most, but those that invest in the right order. Foundations before intelligence. Intelligence before innovation. Measurement before expansion. Every time.”

The Commercial Case Is Strong Enough to Act on Now

The direct financial return from winning a meaningful share of the consumer relationship is material and calculable. OTA commission rates run at twelve to twenty-five per cent of the booking value. For a mid-to-large hotel operator, shifting even a modest proportion of bookings to efficient direct demand can unlock millions in annual contribution margin, before factoring in the retention, ancillary spend and lifetime value benefits that compound over time. This is the arithmetic of distribution economics applied to the gains that direct channel investment can deliver when executed with genuine discipline.

Beyond the margin arithmetic, direct relationships enable increasingly precise marketing. A brand that understands its guests well enough to reach them with relevant messaging at the right moment, through a channel it controls, at a cost of sale it manages, is in a fundamentally stronger commercial position than one that rents access through intermediaries on terms it does not set. Better first-party data enables better personalisation, which improves conversion, which generates richer data, a flywheel that sophisticated digital businesses have operated for years and that hotel brands are only beginning to build.

The downside of inaction is not maintaining the status quo. It is accelerating dependency on platforms whose incentives are misaligned with hotel brand differentiation and pricing power, in a direction that becomes progressively harder to reverse as platforms’ data advantages deepen. The battle to own the consumer is not a single initiative. It is a sustained, sequenced commitment to knowing consumers better than the platforms trying to claim them, reaching them through channels a brand controls, and delivering a direct experience that is genuinely superior to the intermediated alternative.

Companies that commit to this sequence, investing in infrastructure before innovation, measuring at every stage and changing the operating model to exploit the technology, will find the advantage compounds in ways that become difficult for late movers to close. Those that continue to treat consumer relationship investment as a marketing programme rather than a commercial strategy will find the balance of power shifting in a direction that is very difficult to reverse.

“Building personal relationships with consumers at scale is not a programme. It is the operating model that separates the companies that compound advantage from those that merely participate in a market they do not control.”

About PACE Dimensions

PACE Dimensions is a research and consulting firm founded in 2010 with deep industry experience and a practitioner’s expertise in helping Travel and Hospitality companies excel through strategic clarity and operational excellence. The firm specialises in translating market insights and strategic imperatives into practical initiatives that deliver measurable performance improvement. Its consultants bring proven track records of success working with hotel groups of all sizes across upscale and luxury segments, combining rigorous analysis with pragmatic implementation approaches that drive sustainable results.

References

¹ PACE Dimensions (2026). Focus Areas in a Flat Growth Environment: Strategic Imperatives and Winning Ways for 2026. https://pacedimensions.com/strategic-imperatives-winning-ways-2026/

² PACE Dimensions (2026). Who Owns the Guest in the Age of AI? https://pacedimensions.com/who-owns-the-guest-in-the-age-of-ai/

³ Edelman (2025). 2025 Edelman Trust Barometer Special Report: Brand Trust, From We to Me. https://www.edelman.com/trust/2025/trust-barometer/special-report-brands

⁴ Skift Research (2024). Hotel versus OTA Direct-Booking Tussle Will Shape Distribution for Years to Come. https://skift.com/2024/12/23/hotel-versus-ota-direct-booking-tussle-will-shape-distribution-for-years-to-come/

⁵ PhocusWire (2025). Online travel giants spent $17.8B on marketing in 2024. https://www.phocuswire.com/online-travel-marketing-spend-2024

⁶ CBRE (2025). Hotel Loyalty Programs Continue to Prove Their Value: Key Findings from 675 Million Members. https://www.cbre.com/insights/articles/hotel-loyalty-programs-continue-to-prove-their-value-key-findings-from-675-million-members

⁷ Marriott International (2026). Q4 and Full Year 2025 Earnings Release. https://www.sec.gov/Archives/edgar/data/0001048286/000104828626000005/mar-2025q4xex99earningsrel.htm; Hilton Worldwide (2026). Q4 and Full Year 2025 Earnings Release. https://stories.hilton.com/releases/hilton-reports-2025-fourth-quarter-and-full-year-results

⁸ Expedia Group (2023). Expedia Group Announces One Key, a Groundbreaking New Loyalty Program. https://www.expedia.com/newsroom/expedia-group-announces-one-key-a-groundbreaking-new-loyalty-program-that-rewards-every-traveler/

⁹ Booking.com (2025). Genius loyalty programme. https://www.booking.com/genius.html

¹⁰ Gartner (2024). Customer Data Platform (CDP) Definition. https://www.gartner.com/en/information-technology/glossary/customer-data-platform