New Travel Rewards Insights: Discovering What Consumers Value Most

This sponsored content was created in collaboration with a Skift partner.

Despite persistent inflation, the looming threat of recession, and other economic headwinds, demand for leisure and business travel remains high as consumers continue to make up for lost time due to the lack of travel opportunities during the pandemic.

Expedia Group recently completed new consumer research with Wakefield Research, gleaning insights into the categories in which travelers plan, changes to prior year spending, and the factors that will help retain share of wallet in the months ahead, including sentiment around reward and loyalty programs.

The research showed business travel intent is up year over year, and plans for leisure travel remain strong. Eager to continue traveling, consumers are paring down budgets as a trade-off. They plan to spend less in areas such as retail — including clothing, souvenirs, and luggage — and dining.

In addition, the research revealed that reward and loyalty programs can increase travel provider opportunities to engage with consumers and boost spending, with booking discounts and other pricing incentives topping the list of respondents’ preferences for reward offerings.

“Loyalty members are high value travelers — they travel more, spend more, and stay longer,” said Ariane Gorin, president of Expedia for Business. “That’s why travel providers want to attract these customers. However, what travelers value in loyalty programs has evolved. Understanding these changes is key to building a loyalty program that stands out.”

Here, SkiftX highlights insights from Expedia Group’s March 2023 online survey — which polled 5,500 adults ages 18 and older from the U.S., UK, France, Canada, Mexico, Germany, Japan, and Australia — to help travel providers and professionals understand consumer behaviors around loyalty.

Travel Spending Remains Strong, in Spite of Economic Concerns

Despite ongoing fears of a recession, inflation continues to show signs of moderation, falling in the U.S. for the 11th straight month to 4.9 percent in April, according to a June report from the Bureau of Labor Statistics. That’s down from the June 2022 peak of 9.1 percent — the highest reading in more than 40 years, according to The Washington Post. However, even with the easing of inflation, travel prices remain high. Skift Research found that 71 percent of U.S. consumers experienced higher travel prices while booking their personal trips in Q1 2023 compared to Q1 2022.

Regardless of these higher price tags, travel demand is strong. Only 5 percent of Expedia Group’s research respondents said they plan to significantly decrease their budget for a single trip compared to last year, and 81 percent said they plan to either increase spending or maintain their 2022 budget for a single trip. Respondents expressed less enthusiasm for travel-related retail spending, planning fewer purchases of new clothing for travel (46 percent), souvenirs (43 percent), and new luggage (42 percent).

Leisure and Business Travelers Are Making Plans

Most respondents (72 percent) said they plan to travel more for leisure in 2023 to make up for lost travel opportunities over the past few years. That figure rose to 78 percent among Gen Z and millennial respondents. Consumers in the Americas and the EMEA (Europe, Middle East, and Africa) region continue to lead in travel intent, with 83 percent and 84 percent planning for leisure trips, respectively.

Respondents indicated they are planning trips to “relax and disconnect” (62 percent), “connect with family or friends” (50 percent), and “explore a new location” (39 percent), but business travel is also top of mind.

The number of U.S. consumers planning to travel for business is up significantly year over year, from 29 percent in July 2022 to 51 percent, according to the research. And 39 percent of respondents said they plan to take a business trip in the next 12 months, up from 32 percent in July 2022.

Flexibility, Price, and Convenience Carry More Sway with Travelers

Travel providers may find Expedia Group’s insights valuable when weighing reward and loyalty program updates or changes. First, consumers want to use travel rewards across different trip elements and brands, with 77 percent saying they’re most interested in rewards they can apply to any individual element of a trip such as a flight or hotel, regardless of brand. That was especially true among younger consumers: 83 percent of millennials and 82 percent of Gen Zs indicated an interest in more flexible rewards.

However, members of travel reward programs are willing to keep their options open. About half said they look outside of their rewards programs to book with alternative providers, especially if another provider offers a cheaper option. Meanwhile, 40 percent of members said they would book with brands or providers of which they are not members if they find options that work better with their trip dates or times.

“Our new rewards program, One Key, was designed to give travelers the flexibility they want while providing our travel partners with insights, tools, and strategies to grow their businesses,” Gorin said. “With One Key, our members have the flexibility to earn and spend rewards across Expedia, Hotels.com, and Vrbo. For our travel providers, this translates into accelerated demand and greater exposure to high-value travelers.”

On average, reward members are planning 3.06 leisure trips in the next 12 months, compared to 1.38 trips for non-travel reward members. It’s worth travel providers’ time and focus to listen to consumer feedback on the incentives they want and how they hope to use them.

Providers will be happy to find that reward and loyalty program members are more confident about travel in the next 12 months, with 95 percent of reward members indicating they plan to travel for leisure in the next 12 months, compared to 67 percent of non-reward members.

“Reward programs present a phenomenal opportunity for travel providers to connect and engage with travelers,” Gorin said. “The key to success is to build a program that can evolve as traveler expectations change. At Expedia Group, our aim is to help our travel partners navigate these shifts and drive opportunities, while giving travelers the options they value.”

For more information about Expedia Group’s One Key travel rewards program, click here.

This content was created collaboratively by Expedia Group and Skift’s branded content studio, SkiftX.