Reward Diversity Growing in Significance for Airlines, Hotels


Are you old-school or old-fashioned? A purist or a relic? In the world of travel loyalty programs this sort of distinction is becoming increasingly significant. Programs offer more choices than ever before, both for earning and redeeming points, and consumers are reacting to that level of choice with a strong voice. The voice was given shape and structure most recently in a survey of 2,250 travelers commissioned by Collinson Latitude to look for trends, habits and even some of the emotional factors which come into play when consumers shop and redeem; a few stats in the findings are notable.

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Some of the stats are relatively consistent with previous numbers. We have long known that people like awards and when they redeem awards they want more points to do it all over again. The Collinson research shows that is still the case, with solid repeat business from those redeeming; the numbers are even higher in the US market.

Read More: Which type of loyalty junkie are you??

Where the Collinson Latitude data becomes more interesting is as it looks into what makes a program appear modern and desirable to members. It turns out that breadth of redemption options really matters to a significant portion of members.

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To be fair, this is still below half of the participants so saying that it is an absolute requirement is probably a reach today. But this is just one of the many, many signs of evolution in the industry. Not only are such programs allocated a negative moniker but consumers acknowledge that they’re looking for more, lots more.

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Perhaps more importantly, these customers are finally backing up their words with actions. Rather than just talking about wanting more options for redemptions program members are actually cashing in on these awards in ever growing numbers. I’ve looked at the numbers for a few airline programs in the past and indirectly shown the trend of such redemptions growing. This data from Collinson Latitude shows it from the consumer side as well; denying this as a trend, one which is gaining significance, is a losing battle.

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We are well past the tipping point where non-core rewards are considered a luxury within a travel rewards program. More and more consumers expect more options for redeeming their points. And they’re happier – and more likely to accrue – when they get those options. How much happier? The study suggests an overall rate of 71% of members engaging to earn again after redeeming for a core award while that number jumps to 77% following non-core redemptions.

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Does this mean that the core rewards – air and hotel redemption options – are dead? Far from it. The majority of award bookings are still coming from the “old-fashioned” side of the operation; the “purists” do not have too much to worry about on that front. Still, it is undeniable that the landscape is shifting and that the broader membership rolls comes

Read More: Will Targeting Millennials Change Loyalty As We Know It?

 

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, LinkedIn and .

2 Comments

  1. It is not at all controversial that redemptions increase engagement and future earning.

    But there’s something funky about the slide deck putting out that non-core redemptions have a higher degree of future engagement than core redemptions based merely on a survey where the difference in responses won’t be statistically significant. (71% – 76%)

    Besides there are non-core redemptions and then there are non-core redemptions, and *low value*-for-hard earned points may drive down overall satisfaction and engagement (just as redemption provides proof in the value of past engagement, getting poor value may demonstrate the opposite).

    Providing high value non-core redemptions is of course much more costly!

    Should help drive some programs to buy non-core redemption services through Collinson Latitude though…

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