The report reveals that American travelers seek value in 2024. Loyalty programs shift focus to profitability, offering new travel rewards and facing challenges in demonstrating value to members. Learn how to win in the evolving travel landscape.
Americans are gearing up for more travel in 2024, but their approach is changing. According to Arrivia’s latest report, the focus is now on seeking value and optimizing loyalty program benefits. Jeff Zotara, Chief Marketing Officer at Arrivia, emphasizes that travel brands must align with evolving consumer needs to thrive in the competitive market.
Based on surveys of over 2,200 U.S. consumers and 100 loyalty decision-makers, the report reveals significant shifts in travel preferences and loyalty program strategies since 2021. Here’s a deeper dive into the findings and their implications:
- Value Reigns Supreme: While travel remains a priority, rising costs are causing consumers to prioritize value. “Price/value for money” ranked as the top consideration for trip planning, with 72% acknowledging the impact of inflation on their travel plans. Interestingly, only 23% considered using loyalty points to offset costs, indicating a potential disconnect between program offerings and consumer needs.
- Loyalty Members Seek More Value: Loyalty program members expressed dissatisfaction with pricing and value propositions. They cited high overall prices (44%) and uncertainty about getting the best value (23%) as key concerns when booking travel. This highlights the need for programs to offer diverse options to reduce costs, such as points redemption (46%), discounted booking portals (31%), and travel provider discounts (29%).
- Loyalty Program Goals Shift: The report identified a shift in program goals, with profitability taking precedence over member acquisition and retention. Encouraging tier upgrades, increasing program spending, and introducing new rewards are now key priorities. Additionally, program size has grown, with the 1-9 million member range experiencing a significant increase (from 10% to 21%).
- Travel Rewards on the Rise: The survey found a significant increase in programs offering travel rewards (95% vs. 65% in 2021) and incorporating direct booking capabilities (84% vs. 61%). Furthermore, 84% of respondents plan to introduce new travel rewards, highlighting the growing importance of travel in loyalty programs.
- Challenges and Opportunities: Despite the growth in program size, demonstrating value remains a challenge, with 20% of providers citing it as a significant hurdle. The report suggests strategies to bridge the gap, including offering various rewards, simplifying redemption processes, and providing deeper discounts. Additionally, catering to niche markets like cruises presents an opportunity for expansion.
In today’s competitive landscape, loyalty programs must prioritize value to be successful. This means offering diverse rewards, streamlining redemption processes, and communicating discounts and travel options effectively. By catering to the evolving needs of value-conscious consumers, programs can foster stronger relationships, drive engagement, and achieve their business goals.
