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Frequent Travel Programs - US - June 2017

"The travel market continues to benefit from a strong US economy and continued interest in travel. Many adults are enrolled in a frequent travel program, with frequent flyer and hotel loyalty/rewards programs boasting the highest memberships. As travel loyalty programs innovate to provide a wider variety of ways to accrue and redeem points and miles, members are still most interested in rewards that help reduce travel costs."
- Gina Cavato, Lifestyles & Leisure Analyst

This Report discusses the following key topics:

  • Despite interest in experiences, members want cash-back bonuses and gift cards 
  • Young, avid travelers are least likely to be loyalty program members
  • Relatively few members feel their loyalty pays off
  • Membership doesn’t mean “loyalty”

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • Figure 1: Total enrollment and share of enrollment in travel loyalty programs, by industry, October 2015-November 2016
        • The issues
          • Despite interest in experiences, members want cash-back bonuses and gift cards
            • Figure 2: Interest in reward redemption options, March 2017
          • Young, avid travelers are least likely to be loyalty program members
            • Figure 3: Enrollment in travel loyalty programs, by age, October 2015-November 2016
          • Relatively few members feel their loyalty pays off
            • Figure 4: Engagement with loyalty programs – Select items, by type of past year travel, March 2017
          • Membership doesn’t mean “loyalty”
            • Figure 5: Single company membership, by industry, October 2015-November 2016; attitudes and engagement toward travel programs, March 2017
          • The opportunities
            • Under 45s may be willing to pay for better programs and perks
              • Figure 6: Reasons for joining a loyalty program – Select items, by age, March 2017
            • Data can help personalize rewards for members
              • Free or discounted hotel stays or airfare can help lure back lapsed members
                • Figure 7: Desired rewards, by hotels and airlines, March 2017
              • What it means
              • The Market – What You Need to Know

                • One in three adults aged 18+ belongs to a travel loyalty program
                  • Memberships in all travel loyalty program segments grew from 2015-16
                    • Travel credit cards and OTAs attempt to win over traveler loyalty
                      • Travel spending growth points to importance of program engagement
                      • Frequent Travel Program Enrollment

                        • Three in 10 adults are enrolled in a travel loyalty program
                          • Figure 8: Total enrollment and share of enrollment in travel loyalty programs, by industry, October 2015-November 2016
                        • Adults aged 18-24 least likely to be enrolled in a travel loyalty program
                          • Figure 9: Enrollment in travel loyalty programs, by age, October 2015-November 2016
                      • Market Breakdown

                        • All travel loyalty program segments grew YOY from 2015-16
                          • Figure 10: Share of enrollment in travel loyalty programs, by segment, 2011-16
                        • All frequent flyer programs gained members
                          • Figure 11: Frequent flyer program memberships, by major US airline, 2011-16
                        • Membership in hotel loyalty programs grows among largest brands
                          • Figure 12: Hotel loyalty/rewards program memberships, by major US hotels, 2015-16
                        • Growth of car rental programs in question as ridesharing interest grows
                          • Figure 13: US vehicle rental privilege program/club memberships, by brand, 2011-16
                      • Market Perspective

                        • Credit cards compete to provide the ultimate “black” card
                          • Figure 14: Chase Sapphire Preferred credit card: Earn 50,000 Bonus Points, May 2017
                          • Figure 15: American Express Platinum Card: You’re Invited to Apply for the Platinum Card, May 2017
                        • Despite direct booking push, lowest prices may be beyond brand’s sites
                          • Travel is a top goal for half of families in the near future
                            • Retailers and lifestyle brands enter the hotel scene
                            • Market Factors

                              • Vacations and tourism spending outpaces overall consumer spending
                                • Figure 16: Total US consumer spending and vacations and tourism spending growth, 2011-21 (fore)
                              • Millennials fuel growth...but Boomers shouldn’t be overlooked
                                • Figure 17: Population, by generation share, 2017
                              • Shifting loyalty landscape rewards travelers by spend rather than frequency
                              • Key Players – What You Need to Know

                                • Ease of redemption earn programs high overall satisfaction ratings
                                  • Program changes and options outside of the program may impact loyalty
                                    • Simplicity and personalization may be key to program growth
                                    • What’s Working for Loyalty Programs?

                                      • Hotel brands offer more ways to earn and use points
                                        • Tech innovations help travel brands stand apart
                                          • Hilton, Marriott, Alaska Airlines earn highest overall satisfaction
                                            • Hotel loyalty/rewards programs
                                              • Airline loyalty/rewards programs
                                              • What’s Challenging Loyalty Programs?

                                                • Changes in loyalty programs can unsettle consumers
                                                  • “Shop around” culture is pervasive, program members look elsewhere
                                                  • What’s Next for Loyalty Programs?

                                                    • Cross-industry integration can boost program membership and loyalty
                                                      • Travelers desire simplicity and efficiency for their travels
                                                        • Data can provide insights for more personalized offerings
                                                          • Credit cards may set standard for programs to weed out churners
                                                          • The Consumer – What You Need to Know

                                                            • Annual fees prevent some from joining loyalty programs
                                                              • Free hotel nights and free flights are most in-demand rewards
                                                                • Monetary rewards are most likely to be redeemed
                                                                  • Young adults and men put more effort into comparing programs
                                                                    • Programs have room for improvement
                                                                    • Reasons for Joining a Travel Loyalty Program

                                                                        • Frequent travel program members prefer programs without annual fees
                                                                          • Figure 18: Reasons for joining a loyalty program, March 2017
                                                                        • Outside of no annual fee, members want reward options and upgrades
                                                                          • Figure 19: TURF analysis – Reasons for joining a loyalty program, March 2017
                                                                        • Under 45s seek reward options and are less opposed to annual fees
                                                                          • Figure 20: Reasons for joining a loyalty program – Select items, by age, March 2017
                                                                        • Hispanics look for high point to dollar ratio and anniversary rewards
                                                                          • Figure 21: Reasons for joining a loyalty program – Select items, by race and Hispanic origin, March 2017
                                                                      • Desired Rewards from Hotel and Airline Programs

                                                                          • Program members want free night stays and free flights
                                                                            • Figure 22: Desired rewards, by hotels and airlines, March 2017
                                                                          • “Free” rewards rule: women want easier travel, men want airline perks
                                                                            • Figure 23: Desired rewards – Select items, by gender, March 2017
                                                                          • 34% of program members aged 18-44 want complimentary in-flight WiFi
                                                                            • Figure 24: Desired rewards – Airline items – Complimentary in-flight WiFi, by age, March 2017
                                                                          • Business travelers want flight upgrades, priority, and in-flight perks
                                                                            • Figure 25: Desired rewards – Airline items, by type of past year travel, March 2017
                                                                        • Reward Options Likely to Redeem

                                                                            • Program members want cash-back bonuses and gift cards
                                                                              • Figure 26: Reward options likely to redeem, March 2017
                                                                            • Experience-based rewards elicit greater interest among young travelers
                                                                              • Figure 27: Reward options likely to redeem – Select items, by age, March 2017
                                                                            • Sporting events, tech, cooking classes pique Hispanics’ interest
                                                                              • Figure 28: Reward options likely to redeem – Select items, by race and Hispanic origin, March 2017
                                                                          • Engagement with Loyalty Programs

                                                                              • 37% use points for travel, 26% belong to a program they never use
                                                                                • Figure 29: Engagement with loyalty programs, March 2017
                                                                              • Men are more likely to invest time and money in their loyalty programs
                                                                                • Figure 30: Engagement with loyalty programs – Select items, by gender, March 2017
                                                                              • Under 25s are most likely to compare programs before they join
                                                                                • Figure 31: Engagement with loyalty programs – Compare programs before joining, by age, March 2017
                                                                              • Travelers don’t feel they earn enough points for the rewards they want
                                                                                • Figure 32: Engagement with loyalty programs – Select items, by type of past year travel, March 2017
                                                                            • Attitudes toward Loyalty Programs

                                                                                • Programs have opportunities for improvement to boost loyalty
                                                                                  • Figure 33: Attitudes toward loyalty programs, March 2017
                                                                                • 35% of members only book travel through travel rewards programs
                                                                                  • Figure 34: Travel booking loyalty segments, March 2017
                                                                                • Program Professionals are highly engaged, aware of loyalty program offerings
                                                                                  • Figure 35: Attitudes toward loyalty programs – Dedication, by travel booking loyalty segments, March 2017
                                                                                • Program Professionals think they can find a better deal on their own
                                                                                  • Figure 36: Attitudes toward loyalty programs – Struggles, by travel booking loyalty segments, March 2017
                                                                                • Loyalty programs have room to improve
                                                                                  • Figure 37: Attitudes toward loyalty programs – Program improvements, by travel booking loyalty segments, March 2017
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Consumer survey data
                                                                                    • Abbreviations and terms
                                                                                      • Abbreviations
                                                                                        • Terms
                                                                                          • TURF methodology
                                                                                          • Appendix – The Market

                                                                                              • Figure 38: Frequent Flyer program memberships, by memberships, 2016
                                                                                              • Figure 39: Hotel loyalty/rewards program memberships, by memberships, 2016
                                                                                              • Figure 40: US vehicle rental privilege program/club memberships, by memberships, 2016
                                                                                              • Figure 41: Frequent Flyer program memberships, by major US airline, 2011-16
                                                                                              • Figure 42: Hotel loyalty/rewards program memberships, by major US hotels, 2015-16
                                                                                              • Figure 43: US vehicle rental privilege program/club memberships, by brand, 2011-16

                                                                                          Frequent Travel Programs - US - June 2017

                                                                                          US $3,995.00 (Excl.Tax)