News Briefs

Findings from arrivia's comprehensive new 2024 Travel Loyalty Outlook report include a clear intent by American consumers to travel more in 2024 and increased focus on value-seeking around travel planning and shifting expectations when it comes to utilizing travel loyalty program offerings. 

In addition to changes in consumer sentiment around travel planning, the new report from arrivia, a travel technology company that provides travel loyalty, booking and marketing solutions to consumer-facing companies, also analyzes how loyalty program goals have shifted since a similar study of program professionals and American consumers was conducted in 2021.

Based on findings from a September 2023 survey of more than 2,200 U.S. consumers about their 2024 travel plans and the role of travel rewards and loyalty programs, combined with a concurrent study of over 100 loyalty decision-makers about their program strategies and priorities for the upcoming year, the 2024 Travel Loyalty Outlook report compares differences between the 2021 and 2023 responses while highlighting current trends among brands that offer travel rewards programs and the consumers and members that use them.

The full report builds upon The Pathway to Program Profits, a preview of the survey findings designed to assist loyalty program administrators during 2024 planning. It contains complete results and analysis of value to a wide range of travel brands, industry participants, suppliers, and loyalty professionals. Representatives from financial services institutions, airlines, membership-based organizations, hotels, resorts, cruise lines, and those seeking to add or improve travel rewards tied to other loyalty programs can benefit from report takeaways.

"While 2024 is looking to be another banner year for leisure travel among American consumers, our report identifies both challenges and opportunities for brands when it comes to meeting changing traveler needs," says Jeff Zotara, arrivia Chief Marketing Officer. "Those travel brands and loyalty professionals that pay attention to what consumers are asking for in today's economic environment – including greater value and more options – and adjust loyalty strategy to address these needs will benefit from a distinct advantage in the months to come."

The 2024 Traveler Perspective

Consumers, including those who belong to loyalty programs, remain eager to travel, but value for money is their chief consideration, as inflation and high travel prices weigh on their decision-making processes.

• "Price/value for money" was ranked #1 by consumers when asked about their top consideration when trip planning, with 37% of consumers saying that is their biggest priority.
• 72% of consumers said the rising cost of travel is impacting their plans for this year or next – yet only 23% called out using their miles/loyalty points to defray the cost of the trip as a potential solution.
• When booking a trip, loyalty members expressed frustration that prices are too high overall (44%), while 23% responded that they are never sure they are getting the right value.

Both pricing and overall value proposition are driving forces when booking travel in 2024. Today's consumer is looking for a variety of ways to reduce travel costs, including redeeming points to lower the overall expense of their trip (46%), booking discounted travel through their program's booking portal (31%), and using their membership to secure discounts with travel providers (29%).

The Evolving Goalposts for Loyalty Programs

One of the most notable changes in loyalty program goals between the 2021 and 2023 surveys is the shift from member attraction and retention to profitability goals – including encouraging existing members to move up a tier, increasing total spending through the program, and introducing new rewards or redemption options.

• The size of program membership has also increased since 2021, particularly in the one to nine million range, from 10% of companies polled to 21%. Consequently, rewards programs with fewer than 10,000 members have sharply declined, dropping from 30% to 11% in the past two years.
• A larger proportion of 2023 respondents offer travel rewards (95% vs. 65%), and programs with direct travel booking capabilities on their platforms have significantly increased, soaring from 61% to 84%.
• Many of these companies (84%) also plan to offer new travel rewards or benefits soon, up from 63%.
• Meanwhile, challenges around introducing new redemption options have also grown (from 9% to 14%), as have maintaining appropriate customer service levels (21% to 26%).

While overall program membership is thriving, especially among larger providers, survey results illustrate that demonstrating the value of rewards remains a struggle across industries, with one in five loyalty program providers citing this as a significant challenge in both report years.

Connecting with Today's Consumer – Opportunities to Drive Engagement and Customer Lifetime Value

Survey findings illustrate that brands aiming to increase engagement and profitability must focus on value. That means improving the variety of rewards available through their programs, making it easier for members to redeem them, and highlighting their discounted rates.

• 43% of consumers want discounts on everyday purchases vs. 25% of businesses who think that's what their members value most.
• 19% of providers think consumers value status perks, while the survey indicates the actual number is less than half on the consumer side.
• 20% of brands say poor website user experience is what they think members find most frustrating about loyalty, while a small fraction (5%) of consumers cite this as their main frustration. By comparison, 21% of consumers are more frustrated by the difficult or complex processes of earning/redeeming miles.

In addition to incorporating more reward options and reducing friction around reward redemption, strategies outlined in the report for bridging these disconnects, and others identified, include deeper discounts, offering more flexible loyalty currencies, more effective communications around discounts, travel rewards and booking capabilities, and catering to niche travel segments prime for expansion opportunity, including the cruise market.

"Travel rewards have become a core component of many loyalty program offerings, largely due to their popularity and ability to drive revenue," added Zotara. "However, consumer demand is no longer enough to meet program goals given increased competition and options available; brands must provide greater value in more ways than before, including the ability to personalize the experience with more feature- and option-rich offerings on more flexible and responsive user-friendly platforms."

Arrivia's 2024 Travel Loyalty Outlook report identifies opportunities for brands to boost revenue and conversions while deepening member relationships by addressing the importance of the value and utility of travel rewards – including the right selection of reward options combined with the right level of customer service.

For more information about the report or to speak with Jeff Zotara, Chief Marketing Officer at arrivia, please get in touch with Vanessa Horwell at [email protected] or download the 2024 Travel Loyalty Outlook here.

Domino's Pizza Inc. introduces its new and improved loyalty program. 

Domino's Rewards offers loyalty members even more opportunities to earn and redeem points across its corporate and franchise store locations. Domino's enhanced rewards program allows customers to:

• Earn points for less
  • Loyalty members will now earn 10 points on every order of $5 or more
• Redeem points for even more menu items – and earn free Domino's after just two orders
  • Members can redeem a variety of points for more menu items:
    • 20 points: A free dipping cup, a 16-piece order of Parmesan Bread Bites or a 20 oz. drink
    • 40 points: An order of Bread Twists or Stuffed Cheesy Bread
    • 60 points: A medium, two-topping pizza; pasta; Oven-Baked Sandwich; or a 3-piece order of Chocolate Lava Crunch Cakes
• Earn more rewards
  • Loyalty perks are now even better, as members will have exclusive access to member-only deals, special discounts and opportunities to earn bonus points!

"We are thrilled to give the brand's loyal customers additional ways to earn free Domino's items more often," said Mark Messing, Domino's vice president of digital experience and loyalty. "At a time when most brands are scaling back their loyalty programs and making it more difficult to earn and redeem points, Domino's is doing the opposite. We want to make it easier to reward our customers and give them more options so they can get rewarded faster."

Marketing a LTO 

From now until Oct. 22, 2023, rewards members can take advantage of a limited time offer to redeem 20 points for a free order of Domino's new Pepperoni Stuffed Cheesy Bread, which is normally a 40-point redemption, in celebration of the product's recent launch. 

Smokey Bones, owned by FAT (Fresh. Authentic. Tasty.) Brands Inc. unveiled its new and improved Bones Club loyalty program. The revamped program offers guests an instant reward upon joining, exclusive ongoing deals and offers, the opportunity to earn valuable points to be redeemed towards future purchases, and special surprise and delight features. 

After enrolling guests receive an instant $5 reward and 50 Bones Club points to use on a future visit, and they earn five points for every dollar spent. Points are redeemable for favorite food items, as well as get access to exclusive features, including drink specials, limited time offers, birthday treats, and other promos reserved. 

“In a time where guests are placing increasing value on exceptional experiences, we're thrilled to introduce our refreshed Bones Club. The enhanced program is customizable and better in tune with our guests’ desires, allowing it to work harder for them – and thereby inspire true loyalty,” said Cole Robillard, Chief Marketing Officer at Smokey Bones. “The Bones Club is our way of recognizing our most engaged and important guests, providing exclusive offers and privileges designed to resonate with meat lovers and eating out enthusiasts alike, thus amplifying the impact of every dollar they spend at our restaurants.”

Current Bones Club members will experience a seamless and automatic update to their program with no action for any additional steps. 

Are influencers the next generation of travel agents? Arlo Hotels, an independent, experience-driven lifestyle hotel brand with properties in New York, Miami and Chicago, and Washington D.C. launching in 2024, is further innovating the hospitality industry with the launch of their If You Arlo app. The unique loyalty program ushers in a new era of travel where traditional travel agents are superseded by social media agents composed of influencers, friends & family, and content creators who creatively drive bookings while earning perks along the way. Through the If You Arlo (IYA) app, influencers can share insider discounts and tips with their followers while being rewarded with credits, status, and surprise rewards at any of the Arlo Hotels.

[Related Content: @hotel describes itself as an OTA for Instagram and has found that social media is the perfect spot to find, attract and market to valuable leisure consumers.]

According to a recent survey, 83% of millennials said they are more likely to book a hotel after seeing images from someone they follow on social media. Social media is the number one medium to influence travelers’ decisions. Arlo Hotels is carving its path to acknowledge and reward those who truly drive their guests’ decision-making process.

“Social influencers are a new class of travel agents, but they have lacked the infrastructure to make it actionable - until now,” explains Jimmy Suh, chief commercial officer at Arlo Hotels. “Travel is tailor-made for socially driven commerce. Our aim with the If You Arlo app is to offer influencers an opportunity to capitalize on their passion for travel and Arlo Hotels. We recognize that many of our guests’ decisions stem from the folks they follow and trust, i.e. their social network. With the app, we can now understand who these folks are and reward them for it. We’re also very community-driven, and if we can offer our community a program to pay it forward by offering their friends and followers exclusive discounts, it’s a win-win.”

Independent, lifestyle hotels are at a disadvantage compared to big chain hotel brands as they do not have the distribution reach. Further, independent hotels rely heavily on online travel agents (OTAs) for much of their distribution. OTA’s do not offer the consumers the insight of the unique stay experiences that many of the lifestyle hotels, such as Arlo Hotels, offer to their guests. Social media can level the playing field between independent hotels and big chain brands while offering more relevant information about the hotels. If You Arlo app capitalizes on both opportunities and along the way paves a unique path to a powerful new distribution channel.