Overview 
One Key, Expedia Groups’ new loyalty program, is designed to knit together their three main businesses: VRBO, Expedia and hotels.com. The program claims 168MM members worldwide, introducing the first vacation rental loyalty program and an advantage for VRBO over Airbnb. One Key provides an easy way to earn some Elite benefits for those who don’t frequent any one hotel brand. While the point earning rate is low at an average of 1% between airfares and other travel products, members can earn up to 3% by consolidating all bookings with Expedia, and the points are as easy to use as cash in most cases. Perhaps even more importantly, the exclusive hotel discounts of up to 20% provide a real value.
However, users must choose between One Key and programs offered by the car rental or hotel companies -- no double dipping between One Key and Marriott Bonvoy for example. Double dipping is allowed with airline programs, however the base earning rate is only .2% for airline spend -- significantly lower than the 1% earn rate offered by Orbitz (see our review of Orbitz Rewards). The Elite benefits are lesser than the VIP treatment the hotel programs provide their own best guests, though the free price drop protection benefit the upper tiers enjoy is a nice perk.
Overall, the program is a solid play to build back bookings through the OTA’s, which have declined from 60% to 52% of all bookings from 2012 to 2022. A big part of the strategy is hotel and activity bookings, as well as taking a share of the vacation rental business. The program skews more towards leisure travelers, and aims at getting a bigger share of each vacation (flights, car rentals, activities, etc). Members then build up some significant benefits that will encourage the next booking as well.
Points Rewards Program
The One Key Cash points rewards program offers modest earn rate: about 1.4% for those who split their spend evenly between airfare (which earns .2%) and hotels/activities/vacation rentals/car rentals which earn 2%. Higher tier members can triple their earn rates -- earn up to 6% at VIP Access hotels, a grouping of 10,000 properties that represents about 10% of the total available through Expedia.
As an example, a $5K vacation could yield up to $72 as a base member – not compelling. At the highest tier the total would be roughly 3% or $300 for spend at the VIP Access hotels which represents about 10% of the total inventory. This limitation, combined with the fact that less than 10% of the members will likely reach the top earning tier, means the highest earning rates will only apply to a sliver of the total activity.
One Key Earning Scenario
Numerous credit card points rewards programs offer a 2% or better cash back rate which is seen as compelling, in large part because users can earn on every dollar they spend, not just their travel dollars. 1-2% of vacation spending is a nice perk for an existing user, but it won’t draw in many new members to the program and encourage them to switch to Expedia.
VIP Access Hotels
A key element of the One Key program is the special benefits that Expedia has negotiated with the 10,000 VIP access hotels. These include special recognition, accelerated point earnings and up to 10% extra savings for members. The key question here is the quality of the VIP access hotels – if these are quality hotels than this can become a valuable benefit. In reviewing the inventory, here are a few facts:
The vast majority of the 10,000 VIP Access hotels are top tier independents or small chains like Langham, Millenium, Outrigger Resorts and similar. In Boston Downtown for example, participating independents include the Godfrey Hotel, The Bostonian, Harborside Inn and Boston Harbor Hotel. These are all quality properties, and the Member Prices and One Key Cash earnings are all clearly displayed. Interestingly, Boston Harbor Hotel is offering an extra 5% discount to members.
Examples of One Key Search Results
The focus on Independents makes sense due to the conflict national chains have with their loyalty programs. In essence, One Key serves as an loyalty umbrella program that helps to knit this substantial group of hotels together, enabling them to compete with the likes of Marriott, Hyatt, IHG and Hilton. Most tend to be luxury hotels which carry a high price point, though with the discounts of up to 20% and One Key Cash they can become more affordable.
Tiered Loyalty Program
As part of a Tiered Loyalty Program scheme members can earn elevated status, though the benefits are limited to stays at the VIP Access hotels. There are no additional benefits for users of VRBO, purchases of flights or car rental benefits.
To determine level within the Tiered Loyalty Program, One Key track trip “Elements”. Each purchase of a trip component including air ticket, hotel night, car rental day or activity purchase valued at $25 or more counts as 1 Element. This hierarchy reveals the relative value of the various bookings to Expedia Group – an air ticket that might cost $800 counts equally to a $70 excursion or activity ticket. It is certainly worth remembering to buy activities through Expedia if you are a program member!
One Key Tier Benefits
Members can easily earn Gold or Silver membership in the tiered loyalty program after just one family trip, because the Elements add up for each family member on flights and activities. In addition to the accelerated One Key Cash earning rate, members receive discounts of 10% at all hotels and up to 20% at the VIP Access hotels for the elevated tiers. These savings can up up to $100 or more per night on the hotel, which is by far the biggest benefit of the program. In addition, tier members will receive special offers at selected VIP access hotels such as free breakfast, spa certificates or resort fee waivers. Members may also receive room upgrades as available — a number of members report receiving the upgrades though recommend persistently requesting availability. Silver and Platinum members receive price drop protection, which can cost $5 to $30 per ticket — a substantial value that makes smart use of their platform’s capabilities.
Overall, this Tiered Loyalty Program is easily accessible and delivers some extra incentives to use the VIP Access hotels -- everything else being equal it's an incentive to consolidate with the Expedia platform. To achieve a stronger draw though, they need benefits that apply to VRBO users, which will be an increasingly important segment. Further, additional benefits that leverage their tech platform capabilities, like Price Drop Protection, will add value in a way that will be difficult for competitors to duplicate.
LoyaltyLevers Take
The One Key loyalty program scores a 7 out of 10 overall, hampered by the low earning rate and limited program applicability beyond the VIP Access hotels. The program likely works well to drive repeat usage and conversion among regular users, and provides a good reason for members to try VRBO over Airbnb.
To fully realize the potential, the program needs to deliver higher impact benefits for trying VRBO’s to rapidly grow their 50MM users and close the gap to Airbnb which has over 150MM users. For example, offer a hefty One Key Cash bonus for booking both airfare and VRBO.
Additional tech enabled benefits will also help add value and differentiate the program. The current benefit of Price Drop Protection offers high value and a sense of assurance to the member at a low cost to Expedia Group. The ChatGPT integration provides a great opportunity to increase conversion and build revenue with complete itineraries chock full of activities and ancillary services. Finding a way for a member to easily send their itinerary to ChatGPT for additional suggestions would be a big win both in terms of customer experience and revenue gain.
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