byronczimmer: Firstly, I am not a hotelier. I am a civil servant and development economist who was seconded to hotels for 4 years and is out of it now. So, most of my research is from the consumer's point of view. Yes, even a 5-hotel chain (even a standalone hotel) should have a loyalty proggramme if the competition does. It can be an easy-to-administer prog (you get one free night for every five you pay for)
In a few weeks I hope to post my research on whether restaurants should accept bookings: in the West (North Am+ Europe), where labour is very expensive, the admin of bookings wipes off 1/3 of the already-slim profits. So restts scrap advance bookings. Sales fall. They reinstate bookings!!! The industry has still not found the formula
In India labour is still cheaper than in he West (might not remain so): but even for us the admin of points based systems is expensive