Back Understanding Preferences Along Generational Lines
The travel loyalty landscape is shifting, and loyalty programs cannot afford to stay static. New technology or competition from online travel agencies (OTAs) are no longer the only factors at play; the traveler profile itself is changing, as preferences, priorities and behaviors continue to evolve. Younger generations are traveling more often and spending more of their income on travel than their parents and grandparents. It’s projected that by 2030, Gen Z and Millennials will comprise half of all U.S. leisure trips, making them a must-reach demographic for travel loyalty marketers. How can brands better engage these loyalty-skeptic groups without alienating their existing base, many of whom remain highly engaged and continue to expect considerable value from the programs they know and love?
In arrivia’s latest study, Loyalty and the Changing Traveler, we explore how to strike this balance. Drawing on survey responses from 1,089 U.S. adults who traveled in the past year, our report highlights key generational travel trends, booking behaviors and loyalty preferences that program leaders must understand to engage a multi-generational audience. It also uncovers new opportunities by examining the Zillennial micro-generation—travelers who straddle the line between Gen Z and Millennials, but bring distinct values and expectations to the loyalty space.
Here is a breakdown of our findings.
Cost Still Drives Decisions; Value is Nuanced
Despite economic and political uncertainty, leisure travel demand remains strong, particularly among younger travelers. In fact, 55% of Gen Z and 42% of Zillennials expect to travel more this year than last. But cost remains the top factor influencing whether—and where—travelers book. That’s true across all age groups.
It’s the definition of value that varies. While Baby Boomers are more likely to respond to discounts and deals, younger generations are also motivated by more payment options and better choices for how and where they can use their points. Gen Z is especially interested in experiences, more destination options and the ability to book entire trips in one place.
Booking Habits Aren’t One-Size-Fits-All
Most loyalty programs are designed around standard categories—flights, hotels, car rentals—but travelers are looking for more options. Our survey found that vacation homes are now the top accommodation pick for Millennials, while Zillennials showed a higher interest in bundled packages that include cruises.
Younger travelers are also more likely to travel with friends or extended family, making shared bookings and flexible payment tools more important than ever. Even though many are paying for trips themselves, they’re navigating increasingly complex group dynamics, notably when planning milestone trips.
Zillennials: The Overlooked Opportunity
Though Gen Z and Millennials tend to get the most attention in marketing plans, Zillennials are worth a closer look. A large share of Zillennials report full-time employment with household incomes of $100,000 or more. Yet, nearly half still live with their parents, giving them more discretionary income for travel. Compared to the survey average—and even their closest generational cousins—they’re more likely to be interested in international travel, rent cars for their trips and use loyalty programs when offered bundled options or experiences that align with their values.
Loyalty programs that ignore this micro-cohort risk losing market share to competitors who recognize the distinct opportunity Zillennials provide.
What This Means for Loyalty Programs
Only 18% of survey respondents said they booked their last trip through a loyalty program—yet 55% said lower prices, discounts and exclusive deals would make them more likely to do so. That’s a clear opportunity—and a challenge. Closing this gap should be a top priority for loyalty programs. Our report can help. It doesn’t just lay out trends; it gives decision-makers the data and crucial insights to respond. From personalization strategies to product development, it highlights how loyalty programs can remain competitive across generations by offering their members the right mix of relevance, usability and choice. It’s not about guessing what travelers value. It’s about listening and adapting. By understanding the specific needs of each generation, including the nuances within them, and working with the right partners, travel loyalty programs can set themselves up for a future that leaves broad-based assumptions firmly in the past.