Navigating the Evolution of Travel Loyalty: Consumer Shifts and Brand Strategies Unveiled
The world of travel has changed significantly in the past four years, from a complete standstill in 2020 to a resurgence unlike anything the industry has seen in modern times. While travel rewards have always been a vital part of loyalty marketing, their availability has skyrocketed alongside demand. According to a survey from loyalty technology provider Arrivia, 95% of loyalty brands now offer travel rewards compared to 65% in 2022, when the company published its first Travel Loyalty Outlook Report, a portrait of consumer attitudes towards their loyalty programs compared to the priorities of loyalty program providers. In this Q&A with Hospitality Technology, Arrivia Chief Marketing Officer Jeff Zotara shares some insights from the most recent survey and reveals how travel loyalty providers can use technology to maximize customer lifetime value and engagement.
How have consumer attitudes towards travel loyalty programs shifted in the last 12-24 months?
Consumer attitudes towards travel loyalty programs have undergone significant changes over the past 12-24 months, marked by two prominent shifts. The most dramatic change is around value. According to our 2024 Travel Loyalty Outlook Report, 40% of consumers now prioritize value for money more than ever before.
The second is the rise in demand for convenience. With the widespread adoption of mobile technology, constant connectivity, and tools like chatbots, today’s consumer expects succinct and transparent interactions with their loyalty providers across all touchpoints. They don’t want to spend hours trying to understand their benefits, or how to earn-and-burn points; they are looking for efficiency and simplicity from their interactions with loyalty programs.
How does loyalty technology help loyalty brands maximize customer lifetime value?
Loyalty technology plays a pivotal role in helping brands and programs maximize customer lifetime value, a priority that nearly 30% of program providers now consider a top focus, compared to just 16% in 2021. This objective can be accomplished by increasing customer engagement, and this is where best-in-class loyalty marketing technology comes in.
Before the Internet, we had travel agents who were the primary facilitators of personalized deals and experiences, adept at tailoring offerings to match customers’ preferences. Today, technology has seamlessly assumed this role.
Loyalty providers are privy to streams of high-quality member data— data which, when funneled through the right technology platform, enables them to create personalized experiences and offers that align with customer preferences and demands. Utilizing the different data points, from zero-party data or the data the member willingly provides, offline conversations with customer service agents, online chats, search activity, and historical transactions, creates detailed personas of their members, which allows them to deliver engaging content, increases the likelihood of conversion and brand stickiness.
What are some things loyalty brands should consider when evaluating new loyalty technology solutions?
First: is the solution comprehensive, stable, and customizable? Just like consumers, every brand is different and has different needs. The loyalty platform should be able to accommodate personalization for the brand and its customers.
Second: is the solution taking advantage of artificial Intelligence and data. I mentioned that personalization is the best way to maximize customer lifetime value. AI will help us fine-tune customer personas, which is crucial to delivering personalized experiences and boosting customer engagement.
Third, does it offer a frictionless experience? Can the consumer easily engage with the product? In our survey, user experience wasn’t that high on consumers’ priority list. But I would counter that a great user experience is seamless, so people tend to take it for granted. We live in a world where everything is easily accessible. A loyalty platform that can’t deliver this type of experience will not rate high in terms of customer satisfaction.
How does modern loyalty technology enhance customer experience?
As consumers, we have more information available to us now than ever. Yet, it’s still difficult to know if we’re getting a good deal. Modern loyalty technology significantly enhances the customer experience by leveraging available information and seamlessly connecting disparate data points to provide an overall better user experience. For example, curated offers, live price comparisons, and predictive analytics are used to suggest products within the loyalty space in real-time, ensuring that customers receive relevant and enticing offers.
Technology also enables personalized communication through preferred channels, whether that’s chat, phone, or across different devices. Thanks to automation and AI, brands can do this without hiring an army of customer service agents, consequently lowering labor costs, while still providing superior customer satisfaction compared to the past.
How can hoteliers use their loyalty platforms to deliver greater value to their customers in 2024? I’m going to sound like a broken record, but personalization, personalization, personalization!
Getting customers into the loyalty program is critical — the members and guests in your loyalty program, the more insights you can gather, the more opportunities you will have to ask questions that augment the customer experience. For instance, you can ask what kind of room they like. What’s their checkout preference? What’s their preferred method of communication? Are they staying for a special occasion?
From the hotel's perspective, they need to leverage technology that enables true personalization and automate the guest experience at scale so as not to overwhelm their marketing and customer service teams. For instance, if a customer is more likely to interact with the hotel through their app, then that’s how they should be receiving offers.
Ultimately, a loyalty program that puts personalization front and center gives hotels more latitude to connect with guests on a deeper level and retain them long-term.
What do travel reward brands expect from their loyalty programs and how does that compare with consumer expectations?
There’s clearly a disconnect between what consumers expect from their loyalty programs and what brands are offering. For instance, our 2024 Travel Loyalty Outlook Report reveals that consumers want discounts on everyday purchases, which is something many brands don’t think is critical. Brands are focusing more on status perks, yet consumers think this is half as important. I think what this misalignment points to is a failure on behalf of loyalty programs to ask their members and customers enough questions. Yes, they’re collecting data and that’s important, but they also need to be talking to them and asking about how they would like their loyalty program to behave. And then, when they do have these answers, a lot of companies might not have the right loyalty technology platform that can translate them into meaningful experiences.
Brands need to be judicious in selecting their loyalty providers and look for a partner who excels in both technological innovation and possesses ample experience, including strong relationships with travel suppliers. This ensures that loyalty programs can offer members the value they seek, and ultimately positioning them as the preferred travel booking platform of choice for their members.
ABOUT THE AUTHOR
Jeff Zotara is the Chief Marketing Officer of arrivia, a travel technology company that provides travel loyalty, booking and marketing solutions to consumer-facing companies that want to deliver exceptional value to their customers, uncover new revenue streams, and drive growth through exciting travel rewards and member benefits. With more than two decades as a strategic and operational marketing leader, Jeff is focused on driving growth and marketing technology across brands and providing the best member experience at the intersection of travel and tech.