Hotels, airlines and now destinations are embracing loyalty and rewards programs in 2022, poised to capitalize on pent-up global demand. But consumers have different needs than before the pandemic. The most noticeable change is that they will want more freedom and flexibility when choosing rewards after being deprived of the luxury of making choices for the better part of two years. Importantly, they are also becoming more aware of the impact their travels have on the planet.
Skift’s Travel Loyalty Summit, which took place as a virtual event on Thursday, saw a number of travel industry innovators share their insight into the future of loyalty in a post-Covid world. .
Sustainability is a work in progress
Greener travel habits were slowly taking hold before the arrival of the coronavirus. But today’s brands should really think about how to integrate sustainability into their programs, said Wouter Geerts, senior research analyst at Skift, during the summit kick-off presentation.
Was Delta Air Lines looking to encourage sustainable travel? “We are figuring out what would have a significant impact,” said Prashant Sharma, vice president of loyalty, who added that Delta was the first airline to hire a director of sustainable development. “We are looking for how we can have the greatest impact.”
Besides air travel, he said passengers can donate air miles to organizations promoting sustainability. He was also proud of his partnership with American Express, which used recycled ocean plastic for its cards. “It demonstrates that we are making a difference, but there is so much more to do,” Sharma told Skift Editor-in-Chief Brian Sumers during the session “Evolution of Airline Loyalty and Innovation to Engage Customers.” “.
Meanwhile, Mark Nasr, senior vice president of product, marketing and e-commerce at Air Canada, said the airline is donating 100 million Aeroplan points to bring Ukrainians to Canada. “We are working with Miles for Migrants, and the goal is to bring 10,000 Ukrainians to Canada,” he said.
These are perhaps the destinations that are the most authentic when it comes to combining sustainability and loyalty. “Biological fidelity” is probably overlooked by many tourism boards and marketing bodies, but several destinations are now taking their toes in the water with more structured rewards programs, including the Maldives, Visit Mexico and more recently Grenada, which last month launched a program called 473 Connect for the island’s 360,000 diaspora members.
“These are the unsung heroes who promote our island tirelessly,” said Petra Roach, CEO of the Grenada Tourism Authority. “Why not create a tangible program, then they will become an extended sales force. We train this group of people, the same way we would train a travel agent or a consultant.
There would be promotional evenings, familiarization trips, discount cards in bars and restaurants. Even a gas station had signed up, she told Skift Global Tourism Reporter Lily Girma during the New Paths to Building Tourism Loyalty panel.
And by using the 473 area code, it “took those heartstrings, that nostalgia” and sparked new energy and new business into the country, she added.
Other countries can easily follow suit. “You don’t always need a program, it can be expensive,” said Ramya Murali, principal at Deloitte Consulting. “Think about the layers and the complexities. You can start using emotional connections with a brand, without going through the steps to build a program. »
The consultant said 473 Login worked because it was focused on a specific customer segment. “You don’t need all the trappings of a program to drive a program,” she added, but cautioned that destinations need to think about constantly evolving it, because “standing still means becoming stale” .
Destinations are also well positioned to tap into travelers’ desire to be greener citizens through regenerative tourism experiences. Roach noted that there is already an extensive “voluntourism” program, which allows people to get closer to the community, with activities such as planting mango trees or cleaning beaches, which cost nothing. “They will repeat and they will come back. It’s a natural extension, it’s not artificial,” she said.
Murali concluded that the pandemic has moved the needle a lot when it comes to our awareness of the planet, and has forced big brands to become relevant. “The key to introducing sustainability is making sure it connects to the brand. It can fail if it’s seen as something they need to do,” she warned.
Hotels now see more relevance and opportunity in loyalty
Hospitality is another sector well positioned to leverage loyalty in the years to come.
Winning a greater share of direct bookings has long been a goal of hotel companies, in order to reduce their reliance on online travel agencies. IHG is now using a revamped loyalty program in tandem with a new reservations app to solve this problem. The benefits will go beyond free nights and upgrades, according to its senior vice president, global loyalty and partnerships.
“We are proud of what we have brought to market. But building loyalty at scale with 6,000 hotels is complex,” Heather Balsley told Skift editor Sean O’Neill.
After research, IHG found that, yes, customers wanted to earn points for free nights. But it went beyond basic expectations for perks, such as free breakfasts or free upgrades, she added.
Its 100 million registered loyal members are also nine times more likely to book direct.
IHG launched a new app on April 19, offering faster booking, improved customer account management and a mobile wallet. It also acts as a way to raise awareness of the different brands and inspire the kinds of experiences young travelers want.
There will also be “dynamic reward night pricing” for IHG customers, which was a deliberate strategy to improve value. Hotels may price reward nights in line with average daily rates.
“Guests tell you they want more, but our hotels can’t give everything to everyone. So we’re giving them more choice — that was at the heart of giving members control, treating them as individuals,” she told the conference, “How are hotels revamping their programs to stay competitive? ? interview.
“Diamond and Platinum members also get exclusive access to reward night discounts,” she added. “It launched last week, consider it flash sales.”
The new app also helps users better understand where they are on the way to the next stage, while there’s targeted messaging to make it easier to interact with people before they arrive, meaning less burden on users. hotels.
The additional choices also save hotels from incurring higher operating costs. Balsley said the new loyalty program was neutral or cost-effective for more than 95% of its hotels. “It creates the ability to build loyalty and drive profitability for third-party owners. It’s about attracting the most profitable customers to our hotels,” she said.
In terms of sustainability, IHG’s Balsley said customers can opt out of housekeeping or donate points through the website. “There are a number of different ways that our corporate social responsibility comes through the loyalty program,” she said.
And as Skift Research shows that short-term rentals have taken 6% market share from hotels during the pandemic, one question to ask is: what would an Airbnb loyalty program look like, if it produced one. It could be a great innovator and help the brand grow its business travel division, Greets believes.
Customers want more choice, fewer restrictions
Another broader theme from the summit was that brands need to offer more choice to their most loyal customers, many of whom are new post-lockdown.
Delta Air Lines, for example, saw a record number of people sign up for its Skymiles program in the first quarter, and a higher proportion of young people.
“We’re thrilled that these are customers who cross various demographics,” Sharma said. “It’s strong across hubs, but also large numbers are joining outside central hubs and through digital channels.”
It now works with American Express’ Plan It, which is a buy-it-now, play-later program to provide “more flexibility and convenience,” he added. “Miles are a currency like cash, we want to provide value when they want it and where they want it.”
He also told Skift’s Sumers that members want to invest more in experiences, not just flights. “There is a stronger desire because they have been constrained for a few years. We’ve made changes to make sure customers get more value. One way to do this was to remove the mileage cap.
IHG’s Balsley noted earlier, “There are so many different, next-gen needs, but customers don’t want constraints after pandemic shutdowns either.”