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Loyalty and Trust in Travel Markets - UK - June 2015

The P2P phenomenon is disrupting traditional vertical bonds of influence and trust between brands and consumers, creating new lateral bonds between consumers and their peers, whether via other travellers on sites such as TripAdvisor or Virtual Tourist, or via local residents offering expertise and services within the destinations visited. P2P is not entirely displacing more traditional forms of ‘brand authority’, but brands need to engage with and integrate this ‘people power’.”

– John Worthington, Senior Analys

  • Who are the most brand-loyal travellers?
  • Where next for loyalty schemes?
  • How can travel brands influence consumers and gain trust?

The traditional lexicon of loyalty appears increasingly out of date. Rather than customers having to ‘earn’ travel rewards, the emphasis will need to change in future towards successful brands winning repeat business by consistency of service, a more personalised response and the creation of lasting emotional ties.

 

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Overseas leisure travel in ascendant
                • Figure 1: Overseas and domestic holidays & overnight business travel, percentage volume growth 2013, 2014 and first quarter 2015
              • Market factors
                • Macro factors look positive for travel spend
                  • Figure 2: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year-on-year, January 2013-March 2015
                • Strategic shift in loyalty industry
                  • Full package category to be expanded
                    • Loyalty products and innovation
                      • Simplifying rewards
                        • Personalising rewards
                          • Gamifying rewards
                            • The consumer
                              • Brand loyalty low
                                • Figure 3: Levels of brand preference among overseas holidaymakers, April 2015
                              • Personal experience & P2P are critical influences
                                • Figure 4: influences on making travel decisions, responses for either ‘important’ or ‘very important’, April 2015
                              • Disloyal scheme members
                                • Figure 5: Membership of travel loyalty schemes, April 2015
                              • Upgrades, offers and priority check-in/boarding are top preferences
                                • Figure 6: Preferred rewards for loyalty shown towards travel companies, April 2015
                              • What we think
                              • Issues And Insights

                                  • Who are the most brand-loyal travellers?
                                    • The facts
                                      • The implications
                                        • Where next for loyalty schemes?
                                          • The facts
                                            • The implications
                                              • How can travel brands influence consumers and gain trust?
                                                • The facts
                                                  • The implications
                                                  • Market Drivers

                                                    • Key points
                                                      • Economic picture improving for overseas travel
                                                        • Figure 7: GfK Consumer Confidence Index, January 2013-April 2015
                                                        • Figure 8: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year-on-year, January 2013-March 2015
                                                      • Spend on holidays abroad rises 12% in past two years
                                                        • Figure 9: Estimated overseas holiday market volume, value and average spend, 2009-14
                                                      • But domestic tourism under pressure again
                                                        • Figure 10: Estimated domestic holiday market volume, value and average spend, 2009-14
                                                      • Business travel yet to respond to economic recovery
                                                        • Figure 11: Estimated overseas business travel (overnight) volume, value and average spend, 2009-14
                                                        • Figure 12: Estimated domestic business travel (overnight) volume, value and average spend, 2009-14
                                                      • All change for loyalty schemes
                                                        • Thomas Cook case brings trust issues into foreground
                                                          • Package Travel Directive Changes
                                                            • P2P challenge to traditional brand influence
                                                              • P2P driven by Decline of Deference
                                                              • Loyalty Products and Innovation

                                                                • Key points
                                                                  • Points and tier-based systems
                                                                    • British Airways
                                                                      • Changes April 2015
                                                                        • Book Your Award
                                                                          • Simplification of loyalty systems
                                                                            • EasyJet
                                                                              • Wyndham Hotel Group
                                                                                • Hotels.com
                                                                                  • Exodus
                                                                                    • Personalisation
                                                                                      • Virgin Hotels
                                                                                        • Red Lion Hotels
                                                                                          • Thomson Cruises
                                                                                            • Gamification
                                                                                              • Baltic Miles – Burn the Miles
                                                                                                • Expedia – Around the World in 100 Days
                                                                                                  • Hilton at Play
                                                                                                    • Mobile rewards
                                                                                                      • Marriott Hotels
                                                                                                      • The Consumer – Leisure and Business Travel

                                                                                                        • Key points
                                                                                                            • Figure 13: Types of holidays taken in the past 12 months, April 2015
                                                                                                          • Half of adults holiday abroad and in UK
                                                                                                            • Demographics of holiday types
                                                                                                                • Figure 14: Independent versus package holidays abroad taken in the past 12 months, by socio-economic group, April 2015
                                                                                                              • One in eight UK adults travels overnight on business
                                                                                                                • Figure 15: Overnight business trips taken in the past 12 months, April 2015
                                                                                                            • The Consumer – Frequency of Travel

                                                                                                              • Key points
                                                                                                                • The multiple holiday takers
                                                                                                                  • Short breaks
                                                                                                                    • Figure 16: Numbers of short breaks (1-3 nights) taken in the UK and abroad in the past 12 months, April 2015
                                                                                                                  • Longer holidays
                                                                                                                    • Figure 17: Numbers of longer holidays (4+ nights) taken in the UK and abroad in the past 12 months, April 2015
                                                                                                                  • Business travellers take frequent trips
                                                                                                                    • Figure 18: Numbers of overnight business trips taken in the UK and abroad in the past 12 months, April 2015
                                                                                                                • The Consumer – How Loyal are Travellers?

                                                                                                                  • Key points
                                                                                                                      • Figure 19: Levels of brand preference among overseas holidaymakers, April 2015
                                                                                                                    • Levels of brand loyalty are low
                                                                                                                        • Figure 20: Levels of brand preference among overseas holidaymakers, (excluding those who responded ‘don’t know/don’t use’), April 2015
                                                                                                                      • Package holidaymakers more loyal than independent
                                                                                                                          • Figure 21: brand loyalty among overseas independent versus package holidaymakers, April 2015
                                                                                                                        • Domestic loyalty levels also low
                                                                                                                            • Figure 22: Levels of brand preference among domestic holidaymakers, April 2015
                                                                                                                          • Business travellers show slightly higher loyalty
                                                                                                                            • Figure 23: Levels of brand preference among business travellers, April 2015
                                                                                                                            • Figure 24: Levels of brand preference among business travellers, (excluding those who responded ‘don’t know/don’t use’), April 2015
                                                                                                                          • Brand loyalty rises with frequency of travel
                                                                                                                            • Figure 25: Levels of brand preference among occasional versus multiple short breakers, April 2015
                                                                                                                            • Figure 26: Levels of brand preference among occasional versus multiple longer holidaymakers, April 2015
                                                                                                                            • Figure 27: Levels of brand preference among occasional versus multiple business travellers, April 2015
                                                                                                                          • Demographics of travel loyalty
                                                                                                                            • Tour operators/travel agents
                                                                                                                              • Transport operators
                                                                                                                                • Accommodation providers abroad and in the UK, online travel agents and car hire
                                                                                                                                  • Brand-savvy but brand-fickle
                                                                                                                                  • The Consumer – Influence and Trust

                                                                                                                                    • Key points
                                                                                                                                        • Figure 28: Importance of influences on making travel decisions, April 2015
                                                                                                                                        • Figure 29: influences on making travel decisions, responses for either ‘important’ or ‘very important’,
                                                                                                                                      • Personal experience paramount
                                                                                                                                        • P2P is more powerful than friends & family
                                                                                                                                          • Financial protection carries strong influence
                                                                                                                                            • What companies promise still carries weight
                                                                                                                                              • Other factors play a secondary role
                                                                                                                                                  • Figure 30: influences on making travel decisions, responses for either ‘important’ or ‘very important’, by type of trips taken in the past 12 months, April 2015
                                                                                                                                                  • Figure 31: influences on making travel decisions, responses for either ‘important’ or ‘very important’, occasional versus multiple holidaymakers, April 2015
                                                                                                                                                • Demographics and factors of influence
                                                                                                                                                  • Figure 32: influences on making travel decisions, responses for either ‘important’ or ‘very important’, by gender, April 2015
                                                                                                                                                • Factors most likely to influence older travellers
                                                                                                                                                  • Factors most likely to influence younger travellers
                                                                                                                                                      • Figure 33: influence of social media on making travel decisions, responses for either ‘important’ or ‘very important’, by age, April 2015
                                                                                                                                                    • How much influence do loyalty schemes have on the choice of travellers?
                                                                                                                                                        • Figure 59: Influences on hotel choice, August 2014
                                                                                                                                                        • Figure 34: Important factors in choosing an airline, April 2013
                                                                                                                                                    • The Consumer – Loyalty Scheme Membership

                                                                                                                                                      • Key points
                                                                                                                                                        • Almost half of members belong to more than one scheme
                                                                                                                                                          • Figure 35: Membership of travel loyalty schemes, April 2015
                                                                                                                                                          • Figure 36: Membership of travel loyalty schemes, by type of trips taken in the past 12 months, April 2015
                                                                                                                                                          • Figure 37: Membership of travel loyalty schemes, by frequency of trips taken in the past 12 months, April 2015
                                                                                                                                                        • But how loyal are loyalty scheme members?
                                                                                                                                                          • Figure 38: Levels of brand preference, loyalty scheme members versus non-members, April 2015
                                                                                                                                                      • The Consumer – Preferred Loyalty Rewards

                                                                                                                                                        • Key points
                                                                                                                                                            • Figure 39: Preferred rewards for loyalty shown towards travel companies, April 2015
                                                                                                                                                          • Points-based rewards are not high preference for consumers
                                                                                                                                                              • Figure 40: Preferred rewards for loyalty shown towards travel companies, by type of trips taken in the past 12 months, April 2015
                                                                                                                                                            • Priority check-in/boarding higher preference for frequent travellers
                                                                                                                                                              • Figure 41: Preferred rewards for loyalty shown towards travel companies, occasional versus multiple holidaymakers, April 2015
                                                                                                                                                            • Preferences of loyalty members versus non-members
                                                                                                                                                              • Figure 42: Preferred rewards for loyalty shown towards travel companies, loyalty scheme members versus non-members, April 2015
                                                                                                                                                            • Demographics of reward preferences

                                                                                                                                                            Companies Covered

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                                                                                                                                                            Loyalty and Trust in Travel Markets - UK - June 2015

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