back icon Back Insights 06/08/2023

Unlocking New Consumer Rewards – Innovations in Travel Loyalty Programs

The vast majority of American consumers are retracting loyalty at a profit-crushing rate, to the tune of nearly 78% of customers who have permanently left loyalty points to sit dormant. Travel loyalty programs are no exception. Member satisfaction does not exceed 50% for airline, car rental, or cruise line loyalty programs, with hotel loyalty programs reporting a mere 37% satisfaction rate.

At a time when American consumers belong to nearly 15 memberships but actively use less than half, it’s never been more important for travel brands to introduce innovative loyalty programs that re-engage customers — or risk losing them for good. Read on to discover the latest innovations that turbocharge customer loyalty programs, drive repeat bookings, and boost revenue for travel brands. 

Personalization and Customization in Travel Loyalty Programs

Though 59% of U.S. consumers are loyal to brands that present them with personalized loyalty discounts, and 41% are loyal to brands that allow them to personalize products, only 2 in 10 existing customers are satisfied with the level of personalization in their customer loyalty programs. This is a shame, being that 20% of consumers spend more when offered personalized loyalty rewards.

Personalization has long been regarded as a crucial element in the customer experience; however, it’s often the most overlooked component in customer loyalty programs. Enter innovative loyalty programs, which capitalize on personalization by collecting and analyzing first-party data to understand existing customer preferences better. Then, this data is used to personalize loyalty rewards, such as: 

  • Customized travel itineraries
  • Individualized email and SMS communications
  • Exclusive discounts based on customer purchase activity 
  • Personalized dining and entertainment recommendations

Artificial Intelligence (AI) in Travel Loyalty Programs 

Beyond personalization, what factors could make a loyalty program innovative? The answer is artificial intelligence (AI), which can not only sort and analyze significant amounts of data, but also help travel brands cater their messaging and recommendations to individual customer preferences. Innovative loyalty programs leverage AI to complete a range of activities, including: 

  • Analyzing an existing customer’s past travel booking and search history 
  • Assessing and engaging in customers’ recent social media activity 
  • Creating personalized travel recommendations for each user 

“Artificial intelligence (AI) will play a critical role in the future of travel marketing by enabling marketers to personalize their messaging and experiences. With AI, marketers will have the ability to analyze large amounts of data, identify patterns, and create personalized recommendations based on the customer’s preferences,” explains arrivia Chief Marketing Officer, Jeff Zotara. 

But readers be warned, innovative loyalty programs will prioritize member privacy over personalization, particularly when applying AI technology to sift through consumer data. A whopping 92% of consumers say it is ‘extremely important’ that companies protect the privacy of their personal information, and 85% are loyal to brands that safeguard their data privacy. 

Gamification and Interactive Elements in Travel Loyalty Programs

While personalization and AI-powered recommendations go a long way in boosting consumer loyalty, they’re not the only innovations to increase customer engagement. Gamification and interactive elements have helped travel businesses create a more enjoyable customer experience, giving way to innovative loyalty programs that enhance engagement and raise revenue. 

Examples of gamification in travel loyalty programs include interactive challenges that help members earn rewards in point systems or badges and achievements earned at new levels of tiered loyalty programs. An impressive 8 in 10 loyalty members will engage with these elements when present; however, only half of customer loyalty programs currently employ them. 

Which brands have a head start on innovative loyalty programs? Approximately 56% of travel loyalty programs include game mechanics, including 66% of airline programs and 65% of online travel agencies (OTAs). For gamification that encourages customers to engage, be sure to align interactive elements with overall business objectives and offer clear and achievable rewards. 

Digital Integration and Mobile Accessibility in Travel Loyalty Programs

Did you know that 51% of customers are loyal to the brands that interact with them through their preferred channels of communication? Innovative loyalty programs maximize digital integration and mobile accessibility to help travel brands reach their customer base wherever they are. This unparalleled communication helps create a seamless customer experience that drives loyalty.

Examples of digital integration and mobile accessibility in travel loyalty programs include but are not limited to: 

  • Mobile-friendly booking engines
  • Offering rewards through digital wallets
  • Engaging with loyal customers through a mobile app

Whether you offer a loyalty app or mobile booking engine, ensure your digital tools are user-friendly and accessible across all devices. Likewise, focus on interoperability between your various digital channels, like syncing each customer’s website and mobile app activity. Only 25% of loyalty members agree that their program currently interacts with them on the proper channels. 

loyalty program

Augmented Reality and Virtual Reality in Travel Loyalty Programs

Speaking of digital tools, innovative loyalty programs have begun to keep customers engaged with emerging augmented reality (AR) and virtual reality (VR) tools that help travel brands create immersive customer experiences. These tools come at a time when 33% of customers are loyal to brands that engage them in ‘multi-sensory’ experiences, such as virtual reality adventures.

Both AR and VR enable travel brands to completely engross customers in their loyalty programs and showcase their travel offerings in a unique, actionable way. Examples of augmented reality and virtual reality in travel loyalty programs include augmented reality city guides, virtual tours of hotels and resorts, and early virtual access to upcoming dining and entertainment experiences. 

With 41% of customers loyal to brands that present them with new experiences or services, AR and VR are the ideal innovation to spark engagement and drive revenue for travel loyalty programs. As you navigate these new tools, ensure your augmented reality and virtual reality experiences are high-quality, relevant to your loyalty members, and easily accessible through your digital devices.

Arrivia: Innovating Travel Loyalty Programs for Businesses

A recent survey of American travelers revealed that 80% plan to travel more or about the same amount this year. Just how many of them will capitalize on your travel loyalty program? Without innovative loyalty programs, you will begin to lose the engagement of loyalty members, who can eliminate their spending power — and current loyalty points — from your potential profit. 

To turbocharge your travel loyalty program, partner with arrivia. Arrivia offers a range of customizable travel loyalty programs, data analytics tools, and expert support to help travel brands innovate and remain ahead of the competition. To discover how arriva’s technology and travel expertise can enhance customer engagement and drive revenue, request an arrivia demo today.