Travel loyalty programs are facing a unique moment. Consumer demand for travel remains strong, but rising costs are pushing budget-conscious travelers to seek maximum value. At iSeatz, we recently released a report exploring this dynamic and how programs can adapt to offer consumers the value they’re demanding while meeting their retention and customer engagement goals.
The overwhelming finding in the survey data that forms the foundation of our report, 2024 Loyalty Trends: The Role of Travel Loyalty Programs in the New Value Economy (part of the iSeatz Tipping Point report series) is that value is the top consideration for today’s travel loyalty program member. According to our poll of 2,116 U.S. consumers, 49% said what they valued most in their loyalty program was saving money on travel, and 65% would engage more with their loyalty programs if they offered better discounts.
Value is the driving motivator for travelers, but how are programs – and the brands behind them – addressing this demand? And how are they deploying loyalty technology to unlock additional value for members?
Brands’ Evolving Priorities
The answers to those questions lie in how brands balance consumer demand with their loyalty program priorities. Program members’ desire for value is clear, but our survey of U.S. loyalty professionals shows that brands have their own program goals, specifically customer retention, the number one survey response cited by 66% of respondents. Financial results also matter, with “impact on revenue” ranking highly (65%) as a success factor. These priorities shape how brands invest in their programs.
The focus is shifting toward member engagement and program optimization—a significant portion of brands (48%) plan to invest in features that encourage member interaction. Advanced technologies like AI and machine learning (36%) are seen as potentially impacting consumer behavior. Improvements in how members earn and redeem rewards (35%) are another critical investment area. This shift suggests a strategic move to maximize value for existing members rather than just attracting new ones.
Seeking Help from Loyalty Technology Experts
To advance that strategy, brands are increasingly seeking external support to implement advanced program features. A growing number of brands (63%) are partnering with third-party technology providers. Previously, a larger percentage (67%) developed their programs in-house, but now that figure has dropped to 37%.
Companies that leverage the expertise of specialists in travel technology and loyalty platforms fall into three categories: travel technology solution providers (48%), loyalty platform solution providers (45%), and travel loyalty platform providers (36%).
Brands recognize the value that this expertise brings, allowing them to optimize program strategy and tactics for maximum return on investment. This shift highlights the growing complexity of travel loyalty programs and the importance of specialized knowledge for success.
Persistent Disconnects, But Also Areas of Alignment
Even with increased investment in technological capabilities, there’s a gap between what travel loyalty programs offer and what members expect. While brands see themselves as the preferred booking option (76%), only half of consumers prioritize their program for booking (51%). This disconnect extends to user experience, with most consumers (62%) frustrated by program interfaces.
But there are areas of agreement. Consumers value features that ease travel planning, like canceling for any reason and price alerts, and programs are delivering (34% and 30%, respectively). Similarly, both sides prioritize sustainability. Over half of consumers (55%) would choose an eco-friendly program, and brands are responding with planned investments in sustainability-related rewards (60%). This focus on sustainability has shown positive results, with brands experiencing reduced member churn after implementing such initiatives (60%).
Unlocking Value with a Positive Loyalty Experience
These findings show that travel loyalty programs can be a win-win for both members and brands. Programs can create a stronger connection with travelers by focusing on what members want (positive experiences and value). This means delivering core benefits, investing in features that keep members engaged, and partnering with technology experts to make it happen. By prioritizing member needs, brands can leverage the current travel climate to maximize the value of their loyalty programs for both themselves and their customers.
At iSeatz, we believe these prevailing trends and dynamics in the U.S. loyalty marketplace represent a significant opportunity for brands—not only to capitalize on consumers’ desire for transactional travel benefits but also to develop deeper, more engaged relationships with their members that can drive increased customer lifetime value. All they need to seize that opportunity is an appetite for technological investment, a willingness to orient their travel loyalty strategies around value, and the right partner to help them realize their loyalty vision.
