Consumers Consolidating Travel Loyalty Memberships

by , Jul 28, 2009, 4:43 PM
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Rick Ferguson The recession is taking a toll on travel industry loyalty marketing and rewards programs, according to Colloquy research on U.S. consumer attitudes and perceptions.

Travel programs have seen a 31.2% decline in active participation since 2007, which means the general population actively participated in 1.5 travel-related loyalty programs in 2009 compared to 2.18 programs in 2007, when the research was last completed.

The travel-specific results indicate that customers are consolidating their spend with fewer hotels and fewer airlines as the travel-whenever-you-want-for-business "bubble" has burst, and consumers are no longer able to earn elite status in multiple programs.

But there is an upside. Travel marketers can take advantage of this situation to lock consolidating former frequent travelers into their particular program, says Colloquy Editorial Director Rick Ferguson, who co-authored a white paper with Kelly Hlavinka, based on the research. Those marketers will emerge in a stronger competitive position when the economy recovers and travel ramps back up, he says.

"As business travelers are traveling less for the short term, marketers can really focus on these customers and focus on the retention of these fliers," Ferguson tells Marketing Daily. "It requires smart analysis of their customer data base to know which customers are worth spending the extra effort to try to retain."

Airlines need to look not just at miles logged but travel patterns and the types of fares bought. "That's really going to help them decide," he says. "They need to make sure they get those limited marketing dollars in front of the right customers."

Ferguson gave the example of Delta, an airline he frequently used before travel cutbacks, going the extra mile to retain him and encourage him to travel with them. Delta gave him medallion qualification miles so he could retain his platinum status. "They looked at me and decided I was a flier worth keeping," he says.

Colloquy's travel program research shows that just 48% of respondents would be disappointed if their travel rewards program was discontinued, a lower disappointment rate than for any financial services or retail programs.

Affluents, at 67.4%, reported a higher level of participation in travel reward programs than any other demographic segment. In one of the survey's most surprising results, Millennials view Travel rewards more favorably than any other demographic segment, with 35% saying travel rewards are of increased importance in the recession economy -- significantly higher than the next-closest demographic segment, core women, at 30.1%.

Young adults typically have the weakest purchasing power in the travel category, but they view travel rewards programs more favorably than any other demographic group. "This finding reveals that loyalty marketers have a once-in-a-lifetime opportunity to demonstrate program value to the next generation of U.S. consumers," Hlavinka says.

Colloquy's April 2009 online survey respondents are broadly representative of the U.S. population within each consumer segment. Colloquy obtained a total of 2,152 completed survey interviews.

1 comment on "Consumers Consolidating Travel Loyalty Memberships ".

  1. Kevin Horne from Lairig Marketing
    commented on: July 30, 2009 at 10:17 a.m.

    Did these guys adjust for the consolidations in the travel industry? Fewer airlines, fewer loyalty programs, etc.

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