Redefining loyalty in travel – the rise of the experience economy  29th Jan 2018

The traditional business model for loyalty in travel isn’t dead, it’s just evolving.

As mobile and cognitive technologies continue to advance, consumer expectations are changing, forcing loyalty programs to adapt to remain relevant in an over-saturated marketplace.

Throughout numerous areas of the loyalty landscape, change is inevitable. To keep up, travel firms will need to find a balance between the demand for both consistency and change if they’re to thrive and build long-lasting customer relationships.

Loyalty schemes have a long history when it comes to the travel industry, with everything from airline frequent flyer memberships to hotel loyalty programs. And while many travellers are still active on such programs, most are suffering from fatigue.

Research from the 2017 Colloquy Loyalty Census shows that even as loyalty continues to proliferate, more than 54% of loyalty memberships in the United States are inactive.

Then there are those who believe loyalty programs just aren’t worth their time, with 28% of consumers have abandoned a program altogether without ever redeeming a single point or mile.

Writing for Skift, Head of Travel and Tourism Research at Euromonitor International Caroline Bremner, suggests that the lack of mobile readiness in most loyalty programs could be a challenge for travel firms anxious to retain customers.

In fact, 26% of Colloquy’s respondents abandoned a loyalty program because it did not offer a smartphone app. Other reasons included the time it took to accumulate the points or miles needed to be rewarded and a lack of personalisation.

According to findings from a UK consumer survey carried out by Deloitte, securing a customer’s loyalty will soon go beyond having a traditional loyalty program.

Deloitte’s study revealed that most consumers consider being rewarded for their loyalty as the norm, but not a differentiator. When asked, 42% indicated that they needed more than points to shop with a brand.


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