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Loyalty Schemes in Tourism - International - July 2010

This report reviews developments in travel and tourism loyalty schemes, including airline frequent-flyer programmes (FFPs), hotel frequent-guest programmes, as well as loyalty programmes in the rental car and cruise sectors.

A loyalty scheme can be evaluated according to three basic criteria:

  • What does it take (for example in terms of points, Air Miles or hotel nights) to reach a tangible reward or to move into a higher tier in a given programme?
  • How varied are the redemption possibilities? Most loyalty schemes include a number of ‘partners’ – in some cases more than 1,000 – which provide programme members with a variety of ways to ‘burn’ their points, ranging from charitable contributions to retail purchases.
  • For how long are the points earned valid? In most programmes, loyalty points expire after a year or some other predefined time period passes without any activity on the account.

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Table of contents

  1. Introduction

      • Key findings
      • Data Sources

        • Overview

            • The growth outlook
              • Figure 1: Overview of WEO projections, 2008-11
            • Travel and tourism spending forecast
              • Figure 2: Travel and tourism expenditure worldwide, 2010-20
            • Recent tourism trends
              • Figure 3: Recent trend in international arrivals, by world region, 2008-10
          • Loyalty Scheme Membership Totals

              • Figure 4: Summary of travel-related loyalty scheme membership by type, 2008-10*
            • US carriers predominate
              • Over 50% of the total
                • United & Continental to merge
                  • Figure 5: Major airline frequent-flyer schemes (members >1 million), up to 2010
                • Some programmes quite small
                  • Figure 6: Minor airline frequent-flyer schemes (members < 1 million), up to 2010
                • Four large hotel programmes
                  • Figure 7: Major hotel frequent-guest schemes membership, up to 2010
                • Trend in US travel-related loyalty programme membership
                  • Figure 8: Membership in travel-related loyalty programmes in the US, 2009
                • US membership – two thirds of the worldwide total
                  • The Canadian difference
                    • More active participation in Canada
                      • Airlines have succeeded better than hotel chains
                        • Airline schemes reach a broader client base
                          • Airline rewards more interesting
                            • Effects of the recession
                              • Fewer air travel rewards
                                • Disparity in airline reward seat availability
                                  • Figure 9: Overall reward availability ranked high to low – seat availability for June-October 2010
                              • Airline Loyalty Schemes

                                  • FFPs a profit centre?
                                    • Marginal costs low
                                      • Airlines manage redemptions
                                        • Award liability
                                          • Breakage
                                            • FFP points devalued
                                              • Programme requirements
                                                • East Asia & Pacific
                                                  • Figure 10: Summary of frequent-flyer programme requirements for major airlines in East Asia & Pacific, 2010
                                                • Europe and Africa
                                                  • Figure 11: Summary of frequent-flyer programme requirements for major airlines in Europe & Africa, 2010
                                                • North America
                                                  • Figure 12: Summary of frequent-flyer programme requirements for major North American airlines, 2010
                                                • South Asia and Middle East
                                                  • Figure 13: Summary of frequent-flyer programme requirements for major airlines in South Asia and the Middle East, 2010
                                                • Delta’s SkyMiles
                                                  • New Medallion benefits
                                                    • Choice Benefits
                                                      • Current and future programme modifications
                                                        • Figure 14: Current modifications, as of June 2010
                                                      • Planned for autumn 2010
                                                        • Figure 15: Modifications planned for autumn 2010
                                                      • Coming in 2011
                                                        • Figure 16: Modifications planned for 2011
                                                      • American AAdvantage
                                                        • Recent programme enhancements
                                                          • Priority Baggage Delivery
                                                            • AAdvantage Upgrade Awards updated
                                                              • AAdvantage One-Way Flex Awards
                                                                • Figure 17: Example 1 – combining a MileSAAver and an AAnytime award, 2010
                                                                • Figure 18: Example 2 – combining different classes of service, 2010
                                                                • Figure 19: Example 3 – one way, 2010
                                                              • AA.com enhanced award booking 
                                                                • United Mileage Plus
                                                                  • Million Miles and Beyond Rewards
                                                                    • Recent upgrades resemble American’s
                                                                      • Unlimited upgrades on domestic flights
                                                                        • Continental OnePass
                                                                          • Alliances and loyalty
                                                                            • Figure 20: Airlines by alliance, June 2010
                                                                          • oneworld
                                                                            • oneworld tiers
                                                                              • Figure 21: Privileges according to oneworld status, 2010
                                                                            • SkyTeam
                                                                              • Corporate loyalty programmes
                                                                                • Star Alliance
                                                                                  • Star Alliance Gold and Silver
                                                                                  • Hotel Chain Guest Loyalty Schemes

                                                                                      • Rewards
                                                                                        • Internal compensation schemes
                                                                                          • Multi-brand schemes
                                                                                            • Accor excludes its budget brands
                                                                                              • Exclusion works at high end
                                                                                                • InterContinental Priority Club Rewards
                                                                                                  • IHG targets Hilton’s loyalty programme members
                                                                                                    • IHG’s campaign
                                                                                                      • Hilton’s reaction – only 10% of hotels involved
                                                                                                        • IHG's mobile app
                                                                                                          • Hotels Anywhere?
                                                                                                            • Marriott Rewards
                                                                                                              • Objective to break even?
                                                                                                                • A liability of US$1.5 billion
                                                                                                                  • Properties under franchise and management contract must reimburse expenses
                                                                                                                    • Ritz-Carlton considering a loyalty rewards programme
                                                                                                                      • Ritz-Carlton guests prefer to be ‘recognised’
                                                                                                                        • Hilton HHonors
                                                                                                                          • ‘Have a Night on Us’ promotion
                                                                                                                            • HHonors leads in traveller opinion poll
                                                                                                                              • Figure 22: Frequent guest programme poll*, July 2010
                                                                                                                            • Starwood Preferred Guest
                                                                                                                              • Starwood’s secret loyalty programme
                                                                                                                                • Lifetime client value
                                                                                                                                  • Improved performance
                                                                                                                                  • Cruising and Car Rental Loyalty Schemes

                                                                                                                                    • Cruises
                                                                                                                                      • Benefits kick in after five trips
                                                                                                                                        • Interchangeability?
                                                                                                                                          • No master account
                                                                                                                                            • Car rental schemes
                                                                                                                                            • What Next?

                                                                                                                                                • More spin-offs of frequent-traveller schemes?
                                                                                                                                                  • A way to boost share prices?
                                                                                                                                                    • Social networking websites and loyalty schemes
                                                                                                                                                      • Social media users seek engagement
                                                                                                                                                        • A fine line between engagement and privacy
                                                                                                                                                          • Probably not realistic for the foreseeable future

                                                                                                                                                          Companies Covered

                                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                                          Loyalty Schemes in Tourism - International - July 2010

                                                                                                                                                          £295.00 (Excl.Tax)