American consumers intend to travel more in 2024, but that doesn't mean rising travel prices and the increased cost of living aren't affecting how they view trip planning and travel reward programs, according to The Pathway to Program Profits, a preview of an upcoming survey report from Arrivia, a travel technology company that provides travel loyalty, booking and marketing solutions to consumer-facing companies.
Arrivia's comprehensive 2024 Travel Loyalty Outlook report will be available in early 2024 and will explore trends among brands that offer travel rewards programs and the consumers and members that use them. The report's findings reveal challenges facing those loyalty programs and identify opportunities to attract, retain and engage with members based on changing attitudes toward loyalty, value and travel.
The report analyzes a September 2023 survey conducted by Arrivia of more than 2,200 U.S. consumers about their 2024 travel plans and the role of travel rewards and loyalty programs, alongside a concurrent study of over 100 loyalty decision-makers about their program strategies and priorities for the upcoming year. It compares consumer and business perspectives on program effectiveness and goals and examines changes in brand and traveler priorities since Arrivia's 2021 study of loyalty professionals and American consumers.
Over two-thirds of surveyed consumers (67 percent) find value-oriented issues most frustrating when booking a trip, with 42 percent saying they prioritized value more in recent months. In contrast, only 20 percent of the surveyed program managers view demonstrating the value of their travel rewards as a major challenge.
"Our report findings suggest that not all brands recognize how crucial value has become to the American consumer in today's economic environment," Arrivia Chief Marketing Officer Jeff Zotara said in a statement. "To remain competitive and capture their members' travel dollars, brands must identify new ways to provide that value better than anyone else and then make sure they clearly convey these differentiators to members."
Travel Loyalty Programs Shift Focus
While travelers have increased focus on value, travel brands have shifted priorities from overall membership growth and retention to profitability, emphasizing improving member engagement and increasing incremental spending among program members and customers.
Only 8 percent of brands identified customer retention as the top objective of their loyalty strategy, compared to 30 percent in Arrivia's 2021 survey; 57 percent chose new member acquisition as a program goal for the year ahead, down from 70 percent in 2021.
The findings also show a notable shift in travel brand goals: customer lifetime value and program revenue have gained prominence, with the importance of increasing customer lifetime value rising from 16 percent in 2021 to 29 percent, and the goal of boosting total member spending jumping from 41 percent to 54 percent.
Bridging Potential Disconnects
The report concludes that brands can reach their engagement and profitability goals by providing strategic discounts on the most popular travel products like hotel stays and expanding earning and redemption options to improve their members' experience.
A successful way to increase the appeal of offers and conversions is through niche market offerings with a strong following, like cruise travel. Cruise enthusiasts represent more than one-third of the total travel market and have specific preferences that can be catered to through loyalty programs and reward options.
Cruises are also a market prime for expansion; 32 percent of consumers expressed immediate interest in a cruise deal, while 50 percent would consider the offer.
"In today's economic environment, brands across the spectrum are under pressure to generate more revenue from customers, and the travel industry is no exception," added Zotara. "The most obvious way for travel loyalty programs to drive more revenue from existing customers is by taking a member-centric approach to value—leveraging technology, like big data, machine learning and AI—to gather data and develop personalized offers that speak to member preferences."
Copyright 2023 Questex LLC. All rights reserved. From https://www.hotelmanagement.net. By Jennifer Glatt.