Travelers’ choice in 2024: Loyalty worth paying for

In 2024, booking travel still presents challenges such as price fluctuations, hidden fees and uncertain cancellation policies. Additionally, noisy online platforms and poor customer service add to the complexity. While these challenges may not be top priorities for travel retailers focused on innovative products, addressing them can significantly enhance customer satisfaction and loyalty. 

Brands that strike a balance between security, transparency and tailored offerings are poised for success in the evolving landscape of travel booking. Overcoming travel booking fatigue requires a re-evaluation of basic principles and a focus on identifying what customers are willing to pay for in terms of service and curation. 

What business model for loyalty? 

Leading financial institutions like American Express, Revolut and JPMorgan Chase have entered the field by providing premium benefits and/or travel discounts to specific audiences. Neobanks with subscription models are taking it a step further, capitalizing on unique upsell propositions. While paid loyalty programs in travel are still niche, they represent the most profitable and engaging approach at the pinnacle of the loyalty ladder. 

Many loyalty programs looking to achieve similar high retention goals by adding travel bookings, or a co-branded white label, are relying on a limiting business model: capture a revenue share of their users' travel transactions.

Is the retail partner butting in on the relationship that the brand has with its clients? One could argue that brands are actually “de-loyalizing” their programs. In opposition, a focus on customized benefits and user experience can allow brands to cultivate their customer relationships and achieve long-term profitability.

Owning your customers through the entire journey is key. Why enrich the brands of others just to grab a measly buck or two of transactions? 

As technology evolves, custom software solutions enable brands to capture revenue and customer engagement opportunities efficiently, in their ecosystem, ushering in a new era of travel loyalty and with limited resources needed. 

Curation, instant gratification and reward options 

Launching personalized paid programs or implementing discount clubs based on customer data can be a rewarding strategy. Brands can tailor promotions, discounts and experiences to individual preferences, making customers feel valued. For instance, with the rise of "workcations," offering affordable lodging with co-working space options can appeal to a niche market where travel represents a significant share of their spending. 

Instant gratification is crucial in the transformed landscape of travel loyalty as many consumers are shifting their focus away from earning points as the sole determinant of where they spend their travel dollars.

Successful programs combine immediate discounts with long-term rewards, keeping members engaged and motivated to spend more. Having the capability to truly balance how value should be distributed for a specific program is a major step toward differentiation.

Implementing tiered structures with increasing benefits as customers also move up the loyalty ladder is another example of best practice. This motivates customers to spend more to unlock higher levels or simply to upgrade. Not tapping into the most loyal customers who are just asking for more is a significant missed revenue opportunity. 

An elevated customer experience is key 

Today's travelers demand tailored experiences, with 80% expecting personalization from their preferred brands. Accessibility across various channels and a focus on in-person interactions deepen customer engagement. This enables customers to engage with the program seamlessly, regardless of their preferred platform. Focusing on a solution provider who can deliver in-person interactions in the form of a 24/7 concierge service or personal travel agent can be a true differentiator. 

According to Zendesk Trends 2024, 60% of consumers make purchases based on expected service levels, a particularly relevant factor in the complex travel industry. A robust artificial intelligence strategy complements the human touch, merging online and in-person experiences, making it essential when selecting a travel partner.

Be sure your users can benefit from the same - or elevated - customer support levels that you have defined are crucial for your brand. 

This can translate into giving access to a knowledgeable agent before a booking is completed or allowing communications and notifications to be omnichannel and personalized. While this human touch is essential, a powerful artificial intelligence strategy will help merge what happens online and in person. In a word, it should be a priority when selecting a travel partner to ensure that this level of service is available. 

Travel can easily be combined with lifestyle rewards 

Travel club builders and custom software companies can enhance loyalty experiences by offering end-to-end solutions. Access to a wide range of benefits beyond travel insurance or affiliate travel deals fosters an emotional bond with customers daily, making the program more than just another loyalty club. Providing concierge assistance every day of the year and access to discounts on restaurants, theme parks and activities close to home are a few options among many to consider. 

In summary, a differentiated travel experience, including diverse benefits, opportunities for earning and redeeming rewards and elevated customer assistance, is worth the investment. 

Lastly but most importantly, securing recurring revenue based on access rather than transactions mitigates risks associated with seasonality and economic factors.