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02/25/2021

3 Trends for Travel Loyalty Programs

The travel and hospitality industry are expected to have one of the most momentous comebacks post-pandemic. Although there are still bumps ahead, 2021 and vaccine rollouts are providing more hope for a return to a new normal in travel and even a travel boom later in the year. In fact, A Harris Poll survey of 2,500 U.S. travelers found the desire to travel had only increased as the crisis deepened. With this in mind, it is time for travel and hospitality organizations to lay groundwork for success in what will ultimately be a brand-new business landscape.

While the future of travel may still feel as uncertain as the global pandemic, there are a few things we can predict when it comes to loyalty programs:

Perks Will Continue (to a Point) as the Pandemic Drags On

Prior to COVID-19, Southwest Airlines was the only U.S. airline that did not charge change fees on flights. As travel restrictions began in the spring of 2020, almost all major airlines followed suit, announcing they were temporarily suspending the much-detested travel burden – change fees.

To the appeasement of many Americans, several U.S. airlines including, Delta Air Lines, United Airlines, American Airlines, and Alaska Airlines, have all made the new policy permanent. However, once the pandemic ends and travel begins to pick up again, there is a high likelihood that airlines will reintroduce change-fees.

Much like airlines, hotels quickly altered existing policies to be more flexible for customers. Organizations will continue to find value in pausing point expiration, extending elite status expiration, and providing other incentives and experiences (like exclusive rewards or virtual content) to loyal customers. Offering flexibility and understanding of customers’ unique and sometimes unprecedented challenges will embolden travelers’ trust in brands, ultimately leading them to reengage with brands and renew or sign-up for memberships in the future.

Travel Will Skyrocket as the Pandemic Ends

Bill Gates has famously predicted the end of the COVID-19 pandemic by the end of 2021, at which time, we can expect to see a tremendous boom in travel. According to Mastercard’s “Recovery Insights: The Shift to Digital,” traveling is one of the top three activities consumers have missed most. Notably, 54% of travelers say they have either already booked travel, are currently planning to travel, or expect to travel in 2021, according to a recent Airbnb report. In fact, we are already seeing these spikes within the U.S., with 4 million travelers traveling over the 2021 President’s Day weekend. As travel begins to bounce back, companies need to reevaluate travelers’ new and evolving priorities and adjust their offerings accordingly.

In response to the strain on corporate and personal budgets during the national recession of 2008, many travel and hospitality groups realized a shift in travelers’ priorities. Consumers began seeking out vacations and experiences closer to home in order to save on expenses.

Similarly, reflecting on the takeaways of the remote workforce that emerged as a result of the COVID-19 pandemic, many organizations have already and will continue to offer “work from hotel” rewards programs. For example, Hyatt now offers a “Work from Hyatt” package, encouraging those working remotely to earn points by relocating their at-home office to a Hyatt location. These programs will continue to rise in popularity as more businesses move to make remote work permanent, and hospitality groups jump to capitalize on the new workforces.

Additionally, when travel restrictions begin to lift, many will rush to book trips to see family and friends who they have not been able to see in person since before the pandemic. Travel and hospitality groups have an opportunity to be customers’ “first” flying or hotel experience as they return to travel and embark on priceless and unforgettable reunions.

It is crucial that organizations understand the significance of these initial trips, as they will be valuable in retaining new and existing customers moving forward. By honing in on travelers’ new comfort levels, companies can increase the likelihood they book these inaugural trips with them. Enforcing strict hygiene standards, mask wearing, and health screenings will be a cornerstone for traveling in the future. Companies that demonstrate a strong commitment to consumers’ health, and the wellbeing of those they are traveling to see, will emerge the strongest in the years to come.

Merchants and Travel Companies with See Collaboration Payoffs

During the pandemic, we have seen many travel companies and merchants join forces to bring consumers unique benefits and offerings. For instance, in October, Marriott announced a partnership with Grab, a food delivery and ride-hailing app. The collaboration brought over 600 of the hospitality giant’s restaurants and bars across Southeast Asia to the on-demand delivery app. Additionally, Mastercard is now providing offers for ecommerce transactions for more than 35 global merchants that sell over 1,000 sought-after brands – a move that allows U.S.-based merchants to engage international travelers at home. These partnerships seek to provide convenience and perks to different, perhaps not yet integrated customer bases.

Airlines can offer "destination partnerships" as a way to deliver distinctive and more all-inclusive experiences by packaging incentives around destinations. For example, an Airline can partner with an entertainment company like Disney to provide a more frictionless experience where transportation, entertainment, and engagement are pre-packaged. These offers can be designed to be safer with decreased interaction with payment and guest service touchpoints.

Post-COVID, we will see big payoffs for these collaborations as customers rush to engage with these unique experiences. Additionally, companies will continue to see the value in these collaborative efforts, as it brings a new set of customers to both parties, while creating novel and convenient opportunities for customers.

While the future of all industries is still to be determined, the COVID-19 pandemic has taught companies to adapt quickly to unprecedented challenges. This has yielded a culture of creativity and innovation that will characterize the future of business long after the pandemic ends. Companies will provide savvier offerings as they continue to adapt to consumers emerging priorities and expectations, as well as a new workforce. While much is still uncertain, once consumers can return to pre-pandemic travel, there will be endless opportunities for hospitality and travel companies to thrive in the new era.

ABOUT THE AUTHOR

Scott has more than 20 years of experience turning ideas into reality and leading technology teams through the challenges of early-stage growth. As co-founder and CTO of SessionM, Scott is responsible for the strategy, development and deployment of innovative technologies that drive customer data management, customer engagement and customer analytics. Prior to SessionM, Scott served as Vice President of Product & Technology for Scientific Games (SGMS). While at Scientific Games, Scott oversaw the development and integration of interactive technologies into MDI’s products and services. Earlier in his career, Scott served as Vice President of Product and Technology at GameLogic (acquired by Scientific Games in 2010), Co-Founder and GM of SnapYap.com, Principle Software Engineer at Terra / Lycos Inc., and Senior Software engineer at Gamesville.com (acquired by Lycos in 1999). At Lycos, Scott spent several years innovating data and advertising platform technologies. At the age of 16, he joined a team of eight motivated geeks to help build the country’s first Internet service provider, later acquired by Conversant Communications. Scott graduated from the University Of Rhode Island with a BS in Computer Science, with a focus in statistics, complex data models and AI.