New Paths for Building Travel Loyalty Programs

Loyalty is a key priority for travel and aviation companies. It's more imperative now than ever to incentivize travelers by offering awards and vouchers for loyalty program members. These were key themes at the April 21 Travel Loyalty Summit hosted by Skift.

Wouter Geerts, Skift’s director of research data products, joined the event to discuss travel loyalty programs. Skift released a report on the health and latest developments within loyalty programs the same morning as the event.

Airline loyalty programs are becoming more valuable than hotel loyalty programs, according to Geerts. The large U.S. airlines generated between $3 billion to $4.5 billion in revenue from their loyalty programs last year.

Geerts introduced three loyalty program trends that Skift has identified through its research:

1. Business travel is down and may never fully recover. The design of loyalty programs has been adapting to meet the changing needs of travelers.
2. Short-term rentals have become increasingly more popular. According to Skift’s research, short-term rentals have taken 6 percent of the market share from hotels in the United States. Airbnb, one of the top short-term rental companies, doesn't offer a loyalty program, putting it at a disadvantage.
3. Sustainability is key. Loyalty programs have been linked to excessive travel, which no longer reflects the growing concern for sustainability. Airlines have an opportunity to provide more sustainable options for redeeming loyalty points.

Loyalty programs are at the forefront of pandemic recovery for airlines and the travel sector. Brian Sumers, Editor-at-Large at Skift, spoke with Prashant Sharma, vice president of loyalty at Delta Air Lines, about the changes the business has seen in the past few years, particularly as it related to loyalty.

Newer, younger travelers are becoming increasingly more interested in loyalty programs, according to Sharma. A high percentage of young travelers have used digital platforms to join loyalty programs, taking advantage of the programs and platforms available.

Without loyalty programs and repeat customers, airlines have trouble drawing in travelers. Delta cares about consumers' needs and wants and uses these to provide relevant and valued benefits in its loyalty program.

“Our focus is to really understand customers and engage with them the way they want to engage with us,” Sharma said.

The newfound digital age of travel and hospitality allows brands to reach audiences in ways they never have before. An adult in their early 20s most likely will not be signing up for a loyalty program in person; he/she wants to do their own research online and sign up from the comfort of their own home.

The pandemic left people itching to travel, and many had too much time on their hands to plan their future trips down to the exact detail. With the help of loyalty programs, they can drive down the price and commit to a trip with no doubt.