Hotel owners say Marriott’s reward program is ripping them off

Hotel Owners Say Marriott’s Reward Program Is Ripping Them Off

Franchisees Criticize Loyalty System’s Financial Impact

Hotel owners say Marriott s reward - A coalition of hotel operators is increasingly vocal about the financial strain caused by Marriott’s Bonvoy loyalty program, which they argue places an unfair burden on their businesses. These owners, who manage most of the Marriott-branded hotels travelers encounter, claim they are being forced to subsidize the rewards offered to customers who redeem credit card points for discounted stays. Despite operating as independent franchisees, they remain tethered to Marriott International’s revenue model, which prioritizes credit card partnerships over direct cost-sharing with its affiliated properties.

How the Program Works and Why It’s Costly

Bonvoy, Marriott’s customer loyalty initiative, allows users to accumulate points through credit card spending, which can later be converted into travel rewards. While this system appeals to travelers seeking maximum value from their financial tools, it has created a ripple effect for hotel owners. These operators must absorb the cost of discounted stays, even though the points are earned by customers who never set foot in their hotels. The program’s flexibility, which lets users accumulate rewards for non-hotel purchases, has expanded its reach beyond traditional stays, leaving franchisees to bear the brunt of the associated expenses.

Revenue Growth Contrasts with Franchisee Struggles

According to reports from *The Wall Street Journal*, Marriott’s Bonvoy program has seen significant growth, adding roughly 43 million members in the past year. By the end of the first quarter of 2026, the program’s total membership had reached approximately 283 million. This surge has driven substantial revenue for Marriott, with the company projecting a 35% increase in credit card fee income for the current year, potentially reaching $1 billion. However, the hotel owners argue that these gains are not being fairly distributed, as they continue to cover the costs of loyalty discounts while Marriott retains the lion’s share of the profits.

Shift in Loyalty Program Rules Sparks Backlash

The recent evolution of the program has intensified the owners’ complaints. Previously, loyalty points were tied directly to hotel stays, meaning guests earned rewards only after booking rooms. This system created a balance where franchisees contributed to the program’s costs through a shared fund. Now, travelers can earn points through everyday purchases—groceries, gas, and other expenses—before converting them into travel benefits. This change allows users to secure free nights without spending money at Marriott properties, shifting the financial responsibility entirely onto the hotel operators.

Owners Demand Fairer Revenue Split

In response to the growing financial pressure, a group of 51 hotel owners—representing around 1,000 Marriott-branded properties—sent a formal letter to Marriott’s leadership. They called for Marriott to take a more equitable share of the revenue generated by the Bonvoy program, particularly from credit card transactions. The owners also suggested that Marriott should align its reimbursement rates with third-party platforms like Expedia, which offer competitive discounts to hoteliers.

“The group emphasized that hotel owners are bearing a growing portion of the program’s expenses, while Marriott retains a larger share of its revenue.”

This demand highlights a longstanding frustration: franchisees have long believed they were shouldering an increasing share of the loyalty program’s costs, while Marriott captured most of the benefits. The letter, addressed to CEO Anthony Capuano and Chairman David Marriott, underscores the need for transparency and a revised revenue-sharing model.

Marriott’s Response to Franchisee Concerns

Marriott has acknowledged the owners’ grievances, as noted in a recent *WSJ* report. The company claims it is taking steps to address the issue, including raising the compensation provided to franchisees for loyalty bookings on high-demand evenings. Additionally, Marriott has shared financial details of the program with its partners for the first time, offering a glimpse into how the rewards system is structured. While these measures may ease some of the financial strain, the owners remain skeptical, arguing that the adjustments are insufficient to offset the broader impact of the loyalty program’s expansion.

Historical Context and Current Challenges

The loyalty program’s original design, which linked points to actual stays, had a more predictable impact on franchisees. Even when discounts were occasionally required, the system encouraged consistent guest traffic to Marriott hotels. However, the shift to credit card-based earning has disrupted this balance. Now, guests can accumulate rewards without visiting the properties, leading to a situation where franchisees are incentivized to cover costs for stays they never facilitated.

Franchisees Call for Systemic Changes

The owners are not just seeking immediate compensation; they are pushing for a fundamental restructuring of how the program operates. By demanding that Marriott match the rates offered by external booking platforms, they aim to create a level playing field. This would ensure that franchisees are not disadvantaged by a system that allows customers to redeem rewards without direct engagement with the hotels.

Marriott’s reliance on credit card partnerships has become a double-edged sword. While it expands the program’s reach and increases revenue, it also places an unfair financial burden on franchisees. The hotel owners argue that this model is unsustainable, as they are left to absorb costs without corresponding revenue gains. The debate over revenue sharing reflects a broader tension between the parent company and its independent operators, with both sides vying for control over the program’s financial structure.

As the Bonvoy program continues to evolve, its impact on franchisees remains a critical issue. The owners’ calls for change highlight the need for a more transparent and equitable approach to loyalty rewards. Whether Marriott’s latest adjustments will satisfy these demands or require further concessions remains to be seen. For now, the franchisees are left navigating a system that rewards customers while penalizing the very properties that make the program possible.

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