Travel brands have little choice but to make a fresh start with their loyalty programs, because they can't keep on extending points and status forever.
Consulting company Accenture is helping its travel industry clients figure out what a loyalty program should now look like, because pre-pandemic notions of volume and frequency are poised to replaced by new forces.
Top of the list is sustainability, but factors including experiences, partnerships, retail collaborations and remote work also come into play. But until travel is restarted at scale, it’s too soon to make a call on which direction to head, Accenture’s global travel industry practice lead has warned.
Hotels and airlines in particular are still rethinking how to best engage with customers, and ultimately reward them — a topic raised by The Points Guy’s Brian Kelly during Skift’s Travel Loyalty Online Summit in 2020.
“The biggest issue is the history around loyalty points, it’s always been so volume-based. It’s all about frequency,” said Emily Weiss. “What do you do to maintain loyalty? How do you capture your loyal travelers? How do you define a loyal traveler anymore?”
The infinite extension of loyalty points and their corresponding status could render many programs irrelevant in the near future, warned Bryan Terry, global aviation leader at Deloitte, during a Skift Live event last year. Coupled with the fact certain airlines are also poaching passengers with points-based tactics, there’s a pressing need to reinvent them.
“Everyone should be focused on the conscious traveler, the responsible traveler, who’s thinking about sustainability,” Weiss said. “Do I provide you with opportunities based on your sustainable choices, or vice versa? Do I encourage you to make sustainable choices — and then that captures loyalty?”
It’s especially relevant for the corporate travel sector. Companies are already looking at airlines that use sustainable fuel to align with their own sustainability objectives. But they might also ask if airlines are flying their greenest planes or carbon offsetting. Individual business travelers’ loyalty may also morph, Weiss said, if they become dissatisfied with the airline’s sustainability choices.
Overall brands should now look to offer experiences and “hyper-personalization” to make guests or passengers feel special. It should be more about upgrades than free nights in the future. To do that, hotels and airlines can step up the number of retail relationships, and push traditional tie-ups such as deals with taxi firms even further. Weiss said brands should allow people to spend points on food or beverage, or even a spa day for their family, for example.
“Some of the big hotel chains are collaborating very well. Is it capturing new loyalty? I don’t know yet, but it’s definitely catching people’s attention,” Weiss said.
Meanwhile, subscription models will play a role in the post-pandemic world of loyalty, with remote workers representing an untapped market. “If we start seeing travel companies shift their mentality, so it’s less about volume and frequency, and more about long-term commitment through a subscription model, you could see different types of loyalty customers,” she said. Remote workers might even prefer “points” that can easily be donated to other people, or be transformed into tax benefits, depending on the country they’re in.
The specific types of rewards might be up for debate for some time, but that shouldn’t stop hotels and airlines building up pictures of these new traveler profiles and segments today.
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Photo credit: Travel brands should be focused on the conscious traveler, according to Accenture. Kristina Delp / Unsplash