With Marriott Bonvoy making loyalty inroads, and subscription programs having a moment, Expedia Group is consolidating its far-flung loyalty programs in a move that coincides with its strategy to simplify its operations.
In Expedia Group’s ongoing bid to simplify its operations, the company decided to consolidate its current three loyalty programs into one globally, and for the first time members will be able to earn and burn rewards for vacation rentals.
Without providing excessive detail, such as the name of the new loyalty program that will take in all of its brands globally, Expedia Group announced Tuesday it intends in 2022 to expand Expedia Rewards, Hotels.com Rewards, and Orbitz Rewards into one loyalty program around the world. For the first time, far-flung brands in the Expedia Group portfolio, including eBookers in the UK, Wotif in Australia, and Travelocity in the U.S., will offer loyalty rewards for their users.
And in a rare circumstance, the roughly 145 million members across the three loyalty schemes will be able to earn and burn rewards on vacation rentals.
In a Skift interview Monday, Expedia Group CEO Peter Kern said the revamped loyalty program will include all of its brands around the world — vaulting beyond Expedia, Hotels.com and Orbitz — and all products ranging from flights and hotels, to cruise and vacation rentals.
Kern explained that loyalty programs are a cost but they can also be considered a marketing and customer acquisition expense that generates more bookings and creates more stickiness. At the end of 2020, Expedia Group had $769 million in deferred loyalty rewards on the books, and Kern said there’s no reason to believe that the new program would be more expensive.
Kern said the company is “happy” to provide rewards to customers as an alternative to marketing through Google to get new customers.
Behind the scenes at Expedia Group, consolidating the three loyalty programs into one reduces the complexity of Expedia, Hotels.com and Orbitz competing against one another in loyalty with their teams offering disparate products and sometimes-confusing messaging.
Kern said the consolidation gives Expedia the opportunity to provide a more clear value proposition to customers and to maximize the program. He argued that it also provides an enhanced opportunity for suppliers to make inroads with Expedia customer.
The company was not prepared to provide a lot of detail Monday on how the new program would work as Kern said a lot of tech work and product formulations need to be done.
In April, Expedia added about 25 million members to Expedia Rewards by automatically enrolling them in the plan instead of having them opt-in to sign up.
Kern said the changed loyalty program was on an independent track, and was not a reaction to the deep discounts offered in Tripadvisor’s new subscription program, Tripadvisor Plus, which announced an about-face Monday, and will transition from immediate discounts for hotel bookings to cash back at check-in over hotels’ rate-parity concerns.
Since late 2019, Expedia Group has been trying to simplify its operations, consolidating various teams and technology, and shedding non-core brands. For example, Expedia Group has a pending deal to sell its corporate travel division, Egencia, to American Express Global Business Travel in exchange for an equity stake.
“Everything we do is in service to customers, creating travel products and features that are simple to use and even more rewarding for those who travel with us,” said Jon Gieselman, president of Expedia Brands, in the Tuesday morning announcement. “We want our customers to get the most of their travel experiences, plain and simple. No one needs to do anything right now, but soon their current rewards will be even more valuable, as they will gain access to the world of Expedia Group through one consolidated, easy to use program.”
Booking.com in recent years has been focusing on developing its Genius Loyalty program, and both eDreams and Tripadvisor have been developing subscription programs to enhance loyalty. It’s difficult to believe that Expedia Group’s loyalty enhancements aren’t tied to these trends.
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Photo credit: What will happen to Captain Obvious, who touted Hotels.com Rewards now that Expedia Group is trimming its loyalty programs? Hotels.com