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US Travel Tech market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Travel Tech market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

Travel tech encompasses technology used by travelers to research, plan, and book travel, and includes the use of technology while traveling.

Readers of this Report may also be interested in Mintel’s Travel Booking – US, May 2016, Frequent Travel Programs – US, June 2017, and Digital Trends: Spring – US, March 2017.

What you need to know

Technology is an integral component of the travel experience. Consumers utilize all elements of the immense travel tech landscape to help them function away from home. All-in-one mobile devices tend to house a majority of travelers’ needs. Travelers use tech to initiate transactions, communicate and stay informed with travel providers, as well as for entertainment. While travelers are hesitant about the newest innovations, they tend to gravitate towards tech that gives them a feeling of control over their surroundings.

Expert analysis from a specialist in the field

Written by John Poelking, a leading analyst in the Lifestyles & Leisure sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Technology is an integral component of the travel experience. Consumers utilize all elements of the immense travel tech landscape to help them function away from home. All-in-one mobile devices tend to house a majority of travelers’ needs. Travelers use tech to initiate transactions, communicate and stay informed with travel providers, as well as for entertainment. While travelers are hesitant about the newest innovations, they tend to gravitate towards tech that gives them a feeling of control over their surroundings. John Poelking
Travel & Leisure Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Figure 1: Total enrollment and share of enrollment in travel loyalty programs, by industry, February 2017-2018
        • The issues
          • Credit cards play a huge role in rewards travel
            • Traditional FTPs are used more by older and wealthier adults
              • Figure 2: Hotel, airline, and OTA FTP membership, by age, by income, March 2018
            • Flying is increasing, but frequency is decreasing
              • Figure 3: Flyer segments, by number of flights in the past 12 months, February 2018
            • Travelers have good intentions, but that may not be enough
              • Figure 4: Reasons for enrolling in an FTP, March 2018
            • The opportunities
              • FTP members want vacation add-ons
                • Figure 5: Usage and interest of FTP rewards, March 2018
              • Travelers looking for offers while they’re on a trip
                • Figure 6: Desired types of notifications from FTPs, most and any important, March 2018
              • Data engages loyalty members on a personal level
                • Consumers can be engaged in a variety of settings
                  • Figure 7: Preferred reward point accrual sources, March 2018
                • What it means
                • The Market – What You Need to Know

                  • One third of adults belong to an FTP
                    • Conditions are right for increased travel
                      • FTPs are almost all revenue-based
                        • Credit cards play a huge role in points accrual
                        • Frequent Travel Program Enrollment

                          • One-third of adults belong to a travel loyalty program
                            • Figure 8: Total enrollment and share of enrollment in travel loyalty programs, by industry, February 2017-2018
                        • Market Breakdown

                            • Figure 9: Share of enrollment in travel loyalty programs, by segment, 2013-2018
                          • Frequent traveler program membership continues to grow
                            • Frequent flyer program memberships still aloft
                              • Figure 10: Frequent flyer program memberships, by major US airline, 2012-2018
                              • Figure 11: Flyer segments, by number of flights in the past 12 months, February 2018
                            • Hotel loyalty memberships expand in the face of OTA competition
                              • Figure 12: Hotel loyalty/rewards program memberships, by major US hotels, 2017-18
                            • Car rental club memberships motoring along
                              • Figure 13: US vehicle rental privilege program/club membership, by major brand, 2012-18
                            • OTA loyalty programs have a large opportunity with younger travelers
                              • Figure 14: OTA loyalty program membership, by age group, March 2018
                          • Market Perspective

                            • Chase sets a new travel card standard, others try to compete
                              • FIGURE 15: AMERICAN EXPRESS PLATINUM CREDIT CARD: SPECIAL OFFER FOR 60,000 POINTS, MAY 2018
                            • Major airlines complete the transition to revenue-based rewards
                              • OTAs limited in what they can offer
                                • Airlines see large revenues by pairing with credit card companies
                                • Market Factors

                                  • High consumer sentiment enables more frequent travel
                                    • Figure 16: Consumer Sentiment Index, January 2007-May 2018
                                  • Key generations are ready or willing to travel
                                    • Figure 17: US population by generation, 2018
                                    • Figure 18: Where extra money is spent – saving and spending, by age group, February 2018
                                • Key Trends – What You Need to Know

                                  • FTPs are more expansive in their offerings
                                    • Credit cards points are very popular
                                      • Loyalty still low for the less-frequent traveler
                                        • OTAs looking for their place
                                          • FTP piracy has begun
                                            • Big Data hits FTPs
                                            • What’s Working?

                                              • Reward flights are easier to redeem
                                                • Hotels expand their programs
                                                  • Travel-focused credit cards
                                                  • What’s Struggling?

                                                    • Frequent flyers becoming less frequent
                                                      • OTA FTPs limited in scope
                                                        • Hotels may be more stick than carrot
                                                        • What’s Next?

                                                          • Enrollment increases, but engagement decreases
                                                            • Fewer redeemers mean better rewards for the elite
                                                              • Southwest willing to go toe-to-toe
                                                                • Ampli-fied programs
                                                                • The Consumer – What You Need to Know

                                                                  • FTPs are for the older and wealthier
                                                                    • Loyalty program members are savvy, want flexibility
                                                                      • Members expect rewards to be a long time coming
                                                                        • Travel rewards members want … well, travel rewards
                                                                          • Members need help in reaching their goals
                                                                            • Tell them what’s in it for them
                                                                              • Meet them where they are
                                                                              • Opinions of Loyalty Programs

                                                                                • Consumers like their FTPs
                                                                                  • Figure 19: Opinions of frequent travel programs, March 2018
                                                                                • Loyalty members are enthusiastic about membership
                                                                                  • Figure 20: Opinions of frequent travel programs, net agree, March 2018
                                                                                • Younger members are the most enthusiastic, even if their numbers are small
                                                                                  • Figure 21: Sentiment around FTP participation, net agree, by age group, March 2018
                                                                                • Offerings are well-received by members
                                                                                  • Figure 22: Opinions of FTP rewards, net agree, by age group, March 2018
                                                                                • Members find FTPs to be straightforward
                                                                                  • Figure 23: Opinions of FTP structure, net agree, by age group, March 2018
                                                                              • Who Signs Up and Why

                                                                                • Most travelers belong to an FTP
                                                                                  • Figure 24: Frequent traveler program membership, March 2018
                                                                                • Mo’ money, mo’ programs
                                                                                  • Figure 25: Hotel, airline, and OTA FTP membership, by age, by income, March 2018
                                                                                • Cost concerns are of primary importance
                                                                                  • Figure 26: Reasons for enrolling in an FTP, March 2018
                                                                                • Consumers want something for nothing
                                                                                  • Figure 27: TURF Analysis – Membership reasoning, March 2018
                                                                              • What FTP Members Want

                                                                                • Travelers use travel rewards, but are open to cash back
                                                                                  • Members want to augment their vacations
                                                                                    • Figure 28: Usage and interest of FTP rewards, March 2018
                                                                                  • Cash offers flexibility on both sides
                                                                                    • Figure 29: Usage and interest of FTP rewards, travel vs monetary, March 2018
                                                                                  • Cash redemption popular among Black Americans, but they shoot for more
                                                                                    • Figure 30: Cash back redemption and interest by race, March 2018
                                                                                    • Figure 31: Interest in FTP rewards Black FTP members vs all FTP members, March 2018
                                                                                  • Younger travelers, parents see FTPs as a booking asset
                                                                                    • Figure 32: Opinions of FTPs, by age, March 2018
                                                                                • What FTP Members Want to Hear

                                                                                  • Consumers want to know how to spend their points
                                                                                    • On-site rewards
                                                                                      • Figure 33: Top three desired types of notifications from FTPs, March 2018
                                                                                    • Communication should move more toward mobile delivery
                                                                                      • Figure 34: Top three desired types of notifications from FTPs, any chosen, March 2018
                                                                                    • Reward progress more relevant with age
                                                                                      • Figure 35: Top three desired types of notifications from FTPs, any chosen, by age, March 2018
                                                                                  • Leveraging Bonus Opportunities

                                                                                    • Bonus points are an effective feature of reward programs
                                                                                      • Figure 36: Preferred reward point accrual sources, March 2018
                                                                                    • Millennials want bonuses for pep-ups and 1-ups
                                                                                      • Figure 37: Preferred award point accrual sources, Millennials vs all FTP members, March 2018
                                                                                    • Millennial parents
                                                                                      • Figure 38: Preferred award point accrual sources, Millennial parents vs all FTP members, March 2018
                                                                                    • Baby Boomers
                                                                                      • Figure 39: Preferred award point accrual sources, Baby Boomers vs all FTP members, March 2018
                                                                                    • Consumers in the $25K-$50K income bracket want bonus leisure
                                                                                      • Figure 40: Preferred award point accrual sources, $25K-$49,999 income bracket vs all FTP members, March 2018
                                                                                    • Get to $50K-$75K earners’ hearts through their stomachs
                                                                                      • Figure 41: Preferred award point accrual sources, $50K-$74,999 income bracket, March 2018
                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                    • Data sources
                                                                                      • Consumer survey data
                                                                                        • Consumer qualitative research
                                                                                          • Direct marketing creative
                                                                                            • Abbreviations and terms
                                                                                              • Abbreviations
                                                                                                • Terms
                                                                                                • Appendix – The Market

                                                                                                    • Figure 42: Share of enrollment in travel loyalty programs, by segment, 2013-18
                                                                                                • Appendix – Key Players

                                                                                                    • Figure 43: Frequent flyer program membership, by airline, 2012-2018
                                                                                                    • Figure 44: US vehicle rental privilege program/club membership, by major brand, 2012-18