The travel landscape has transformed significantly in recent years, with loyalty programmes emerging as a powerful tool for both travellers and businesses. As demand for travel rebounds post-pandemic, loyalty schemes are evolving to provide greater value, enhanced redemption options, and seamless booking experiences. This shift is particularly evident in the rise of direct booking capabilities and an increased emphasis on diverse travel rewards. I came across a 2024 study by Arrivia and reviewed it for you.
The Growing Popularity of Travel Loyalty Programmes
Loyalty programmes are no longer an afterthought for travel brands—they are becoming a core element of the industry. According to recent data, 95% of businesses now offer travel rewards within their loyalty schemes, a significant increase from just 65% in 2021. Additionally, the number of companies offering direct booking capabilities has surged from 61% to 84% in the same period. This means travellers now have more opportunities than ever to book flights, hotels, car rentals, and even cruises directly through their loyalty programmes.
For businesses, the focus has shifted from simply attracting new members to increasing the lifetime value of customers. In 2023, 29% of loyalty providers prioritised maximising customer engagement, up from 16% in 2021. Similarly, the percentage of businesses aiming to increase total member spend has grown from 9% to 11%.
The Shift Towards More Flexible Redemption Options
One of the biggest frustrations among travellers using loyalty programmes is the limited scope of redemption options. In response, brands are expanding their offerings to include more diverse travel experiences. Traditionally, air travel and car rentals dominated loyalty redemptions, but recent trends indicate a surge in demand for alternative lodging, travel insurance, and bundled cruise packages.
From 2021 to 2023, the availability of third-party travel products on loyalty platforms jumped from 47% to 84%, enabling members to book an entire trip—including accommodation, activities, and transportation—within a single ecosystem. This transition also highlights a move away from proprietary loyalty platforms, with companies increasingly opting for hybrid and white-label solutions that offer a more seamless and user-friendly experience.
Addressing the Value Perception Gap
While businesses invest heavily in loyalty programmes, a disconnect remains between consumer expectations and perceived value. A recent survey revealed that only 7% of consumers turn to their travel loyalty programmes as a first option when planning a trip. Additionally, 44% of travellers believe the prices on loyalty platforms are too high, and 23% feel uncertain about whether they are getting the best value.
The primary reason for this gap is a lack of transparency in pricing and redemption value. Many travellers compare loyalty programme rates with traditional online travel agencies and find them uncompetitive. To address this issue, businesses must focus on exclusive discounts, increased flexibility, and better communication of their loyalty programme’s benefits.
The Rise of Cruise Loyalty Programmes
Despite its reputation as a niche sector, cruise travel is gaining traction within loyalty programmes. Around 37% of loyalty providers now offer cruise-related benefits, but many consumers remain unaware of these options. Data suggests that 25% of travellers plan to take a cruise in 2024, yet only 12% intend to book it through a loyalty programme.
One key insight from the research is that nearly 50% of cruise travellers prioritise savings on bundled shore excursions and destination-based activities over upfront ticket discounts. Loyalty programmes that can integrate these offerings into their redemption options stand to capture a highly engaged segment of the market.
The Importance of Direct Booking Capabilities
Direct booking has become a cornerstone of modern loyalty programmes. Between 2021 and 2023, the ability for members to book all components of their trip within a single platform rose in prominence from 19% to 31%. This is not just a matter of convenience—it also enhances the overall customer experience by offering exclusive discounts and simplifying the redemption process.
Companies that prioritise direct booking integration are also better positioned to offer supplier-funded discounts, increasing the perceived value for members. This approach reduces the reliance on external travel agencies and helps businesses drive loyalty engagement while maintaining competitive pricing.
Overcoming Customer Service Challenges
While loyalty programmes are evolving, customer service remains a major pain point. Approximately 21% of businesses report difficulty maintaining adequate customer service levels, and 14% struggle with introducing new redemption options. For travellers, this often translates into long wait times, complex redemption processes, and unclear reward structures.
To enhance customer satisfaction, brands must ensure seamless booking experiences, clear communication of programme benefits, and flexible redemption policies. Partnering with third-party loyalty technology providers can also help streamline customer service operations, improving response times and reducing friction in the user experience.
Key Takeaways for Travellers
- Compare Loyalty Redemptions: Before using points for travel bookings, compare redemption values across different options. Some programmes offer better deals for car rentals or cruises than they do for flights or hotels.
- Take Advantage of Split Payments: Many programmes now allow members to combine points with cash, maximising their savings without depleting their points balance.
- Book in Advance: Travel demand fluctuates, and booking early through a loyalty programme often yields better rates and availability.
- Consider Cruise Bundles: If you are planning a cruise, look for loyalty programmes that offer bundled shore excursions, as these provide better value than standalone discounts.
- Leverage Direct Booking Benefits: Loyalty programmes with integrated direct booking capabilities often provide exclusive discounts that are not available through external travel agencies.
In a Nutshell
As travel loyalty programmes continue to evolve, travellers must stay informed about the latest trends to maximise their benefits. The industry is moving towards greater flexibility, improved redemption options, and seamless direct booking experiences. However, the perceived value gap remains a challenge that businesses must address through transparent pricing and better communication of benefits. By understanding these trends, travellers can make more informed decisions and unlock the full potential of their loyalty memberships.
Every journey leaves a mark, and small choices can make a big difference. Choosing eco-friendly stays, supporting local communities, and being mindful of plastic use help preserve the beauty of the places we visit. Respecting wildlife, conserving resources, and traveling sustainably ensure future generations can experience the same wonders. By treading lightly and embracing responsible travel, we create meaningful connections and lasting memories. Here’s to adventures that inspire and footprints that honour our planet.
Safe and mindful travels!