The Reinvention of Airline and Hotel Loyalty Programs

by Jeremy Kressmann + Skift Team - Feb 2014

Skift Research Take

Loyalty programs have become a multi-billion dollar revenue stream for travel companies, yet this success has come at the expense of their original purpose: forging stronger connections with customers. How can marketers capitalize on new innovations in technology and shifts in traveler behavior to build more genuine customer loyalty and larger profits in the future?

Report Overview

Loyalty marketing is a multi-billion dollar revenue stream for the travel industry and the programs, as measured in terms of total number of enrollments, are more popular than ever. But changes to the industry landscape and changes in consumer behavior have many observers questioning if they still serve their original purpose: building connections with customers. This question is all the more urgent as new technology tools give travelers access to better information about their travel experience, opening up more information about everything from prices to customer reviews than ever before. This information is also creating new learnings for travel marketers as well, who are gaining more ability to selectively personalize the travel experience and identify pain points as they happen.

While the “points for rewards” loyalty paradigm still rules, there are plenty of new loyalty strategies that are challenging this model. A tidal wave of data, coming from customer mobile phones, social media and digital behavior on booking websites offers new opportunities to better personalize services, surprise and satisfy customers. Meanwhile, this huge wealth of information is also forcing many companies to rethink how and why they are deliver rewards to loyal customers, becoming more transparent and responsive in the process. Those companies that manage to incorporate this wealth of travel data into their loyalty offering stand to reap significant rewards, both in terms of customer perception, but also in terms of their bottom line.